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Cracker Squire


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Location: Douglas, Coffee Co., The Other Georgia, United States

Sid in his law office where he sits when meeting with clients. Observant eyes will notice the statuette of one of Sid's favorite Democrats.

Saturday, April 30, 2011

California Prison Academy: Better Than a Harvard Degree

From The Wall Street Journal:

Roughly 2,000 students have to decide by Sunday whether to accept a spot at Harvard. Here's some advice: Forget Harvard. If you want to earn big bucks and retire young, you're better off becoming a California prison guard.

The job might not sound glamorous, but a brochure from the California Department of Corrections and Rehabilitations boasts that it "has been called 'the greatest entry-level job in California'—and for good reason. Our officers earn a great salary, and a retirement package you just can't find in private industry. We even pay you to attend our academy." That's right—instead of paying more than $200,000 to attend Harvard, you could earn $3,050 a month at cadet academy.

It gets better.

Training only takes four months, and upon graduating you can look forward to a job with great health, dental and vision benefits and a starting base salary between $45,288 and $65,364. By comparison, Harvard grads can expect to earn $49,897 fresh out of college and $124,759 after 20 years.

As a California prison guard, you can make six figures in overtime and bonuses alone. While Harvard-educated lawyers and consultants often have to work long hours with little recompense besides Chinese take-out, prison guards receive time-and-a-half whenever they work more than 40 hours a week. One sergeant with a base salary of $81,683 collected $114,334 in overtime and $8,648 in bonuses last year, and he's not even the highest paid.

Sure, Harvard grads working in the private sector get bonuses, too, but only if they're good at what they do. Prison guards receive a $1,560 "fitness" bonus just for getting an annual check-up.

Most Harvard grads only get three weeks of vacation each year, even after working for 20 years—and they're often too busy to take a long trip. Prison guards, on the other hand, get seven weeks of vacation, five of them paid. If they're too busy racking up overtime to use their vacation days, they can cash the days in when they retire. There's no cap on how many vacation days they can cash in! Eighty officers last year cashed in over $100,000 at retirement.

The cherry on top is the defined-benefit pension. Unlike most Harvard grads working in the private sector, prison guards don't have to delay retirement if their 401(k)s take a hit. Prison guards can retire at the age of 55 and earn 85% of their final year's salary for the rest of their lives. They also continue to receive medical benefits.

So you may be wondering what it takes to become a prison guard. For one, you have to be a U.S. citizen with a high-school diploma or equivalent. Unfortunately, you can't have any felony convictions, but don't worry, possession of marijuana is only an infraction in California.

There's also a vision test, background investigation, psychological evaluation, physical exam, tuberculosis screening, and a fitness test that measures your grip strength. The hardest part, however, is the written test, which includes word problems like this sample test question: "Building D currently has 189 inmates, with 92 beds unfilled. Building D is currently at what capacity?" If you've somehow forgotten how to add and divide, you can bone up on your basic math with Barron's "Correction Officer Exam" prep book.

The application process may seem like a piece of cake compared to Harvard's, but the correctional officer academy is actually more selective than Harvard. Over 120,000 people apply every year, according to the state Legislative Analyst's Office, but the academy only enrolls about 900. That's an acceptance rate of less than 1%. Harvard's is 6.2%. The job also has a better retention rate than Harvard. Only 1.7% dropped out of the service last year, compared to 2% who left Harvard.

If your parents aren't thrilled about you turning down Harvard to become a prison guard in California, just show them the job brochure. Then explain that in another few years instead of paying off thousands of dollars in college loans you'll be taking cruises together. They'll be speechless.

Party Stalwarts to Join Biden in Crafting Deficit Deal - Some skeptics (including the Cracker Squire) see this effort as a diversion or decoy group.

From The Wall Street Journal:

A high-level group of lawmakers begins meeting next week to craft a deficit-reduction compromise, but its members include unlikely recruits to the mission.

A half-dozen House members and Senators will meet Thursday with Vice President Joe Biden to seek a deficit-cutting deal that could clear the way for an agreement on raising the federal debt limit.

But the six—who were hand-picked by party leaders at the behest of President Barack Obama—include figures who seem resistant to moving off their parties' core positions on taxes and spending. Among them are two of the Republicans' most conservative leaders, two liberal lieutenants to House Minority Leader Nancy Pelosi and two committee chairmen known for guarding their legislative turf.

Some skeptics see the Biden effort as a diversion or decoy group, and say the real decision-making will come in a high-level negotiation similar to those that produced the last two big pieces of fiscal legislation. A sweeping tax deal that included extension of the Bush-era tax cuts was negotiated in secret talks between Mr. Biden and Senate Republican Leader Mitch McConnell. A spending-cut deal that avoided a government shutdown in April was hammered out largely by the White House and House Speaker John Boehner.

Mr. Obama convened the Biden group even though another bipartisan set of senators has been meeting for months with a similar mission. That so-called Gang of Six has been holding intensive private meetings to craft a deal based on recommendations of the president's panel, which called for $4 trillion of deficit reductions over 10 years through tax increases, spending cuts and budget-process reforms on a grand scale.

Friday, April 29, 2011

Thank the Good Lord for courageous statesmen - Sen. Chambliss: Tax changes must be on the table

From The Moultrie Observer:

As Congress gets serious about reducing the country’s $14.3 trillion debt, everything should be on the table, including raising revenues, U.S. Sen. Saxby Chambliss said Thursday.

Those revenues would come from eliminating some tax breaks while lowering effective individual and corporate rates, said Chambliss, R-Ga. . . .

Chambliss’ comments echoed a December 2010 report delivered by the debt commission appointed by President Barack Obama. The recommendations in that report would cut about $4 trillion from the deficit over a decade, with about three-quarters of that amount coming from budget cuts and the remainder from tax policy changes.

Chambliss said he has been meeting this year with a bipartisan group of senators working toward a package that can garner the 60 votes needed to prevent a filibuster.

“They came up with some significant changes in the tax code,” Chambliss said. “Hopefully we’ll get together on some bipartisan agreement in the Senate that will get 60 votes in place.”

The plan put forth recently by U.S. Rep. Paul Ryan, R-Wis., would not meet that threshold, he said..

To meet that goal, Chambliss said, spending cuts need to be made as well as “putting revenues on the table.”

America may finally be getting serious about the deficit: More Democrats threaten to vote against raising borrowing limit

From The Washington Post:

A growing number of Democrats are threatening to defy the White House over the national debt, joining Republican calls for deficit cuts as a requirement for consenting to lift the country’s borrowing limit.

The tension is the latest illustration of how the tea-party-infused GOP is driving the debate in Washington over federal spending. And it shows how the debt issue is testing the Obama administration’s clout as Democrats, particularly those from politically competitive states, resist White House arguments against setting conditions on legislation to raise the debt ceiling.

Months ago it seemed unthinkable that Congress might refuse to raise the borrowing limit. Leaders in both parties agreed that failing to do so would risk a default by the U.S. government, which could send interest rates soaring and cut off Social Security checks, as well as salaries for combat troops.

“As catastrophic as it would be to fail to raise our debt ceiling, it’s even more irresponsible to not take this opportunity to own up to our unsustainable spending path,” Sen. Mark Udall (Colo.), another Democrat challenging the White House, said in a statement his office released this week. “If we don’t take action to reduce our deficit spending, Congress will be facing this same debt ceiling vote in the near term – still with no end to our deficits in sight.”

The government is expected to reach its $14.3 trillion debt cap in mid-May. Treasury Secretary Timothy F. Geithner has said he can maneuver to avoid a default until early July.

The White House has condemned efforts to attach additional measures to the debt-ceiling issue.

Polls show why the debt vote is so difficult for Democrats, who next year are expected to face an uphill battle to retain their narrow Senate majority in an election likely to focus heavily on spending issues.

Just 16 percent of Americans favor lifting the debt ceiling, according to a Wall Street Journal/NBC survey published this month. Nearly six in 10 independents opposed it. Democrats were divided, with nearly half saying they did not know enough to have an opinion.

Thursday, April 28, 2011

Obama’s Pentagon and C.I.A. Picks Show Shift in How U.S. Fights

From The New York Times:

President Obama’s decision to send an intelligence chief to the Pentagon and a four-star general to the Central Intelligence Agency is the latest evidence of a significant shift over the past decade in how the United States fights its battles — the blurring of lines between soldiers and spies in secret American missions abroad.

On Thursday, Mr. Obama is expected to announce that Leon E. Panetta, the C.I.A. director, will become secretary of defense, replacing Robert M. Gates, and that Gen. David H. Petraeus will return from Afghanistan to take Mr. Panetta’s job at the C.I.A., a move that is likely to continue this trend.

As C.I.A. director, Mr. Panetta hastened the transformation of the spy agency into a paramilitary organization, overseeing a sharp escalation of the C.I.A.’s bombing campaign in Pakistan using armed drone aircraft, and an increase in the number of secret bases and covert operatives in remote parts of Afghanistan.

General Petraeus, meanwhile, has aggressively pushed the military deeper into the C.I.A.’s turf, using Special Operations troops and private security contractors to conduct secret intelligence missions. As commander of the United States Central Command in September 2009, he also signed a classified order authorizing American Special Operations troops to collect intelligence in Saudi Arabia, Jordan, Iran and other places outside of traditional war zones.

The result is that American military and intelligence operatives are at times virtually indistinguishable from each other as they carry out classified operations in the Middle East and Central Asia. Some members of Congress have complained that this new way of war allows for scant debate about the scope and scale of military operations. In fact, the American spy and military agencies operate in such secrecy now that it is often hard to come by specific information about the American role in major missions in Iraq, Afghanistan, Pakistan and now Libya and Yemen.

The phenomenon of the C.I.A. becoming more like the Pentagon, and vice versa, has critics inside both organizations. Some inside the C.I.A.’s clandestine service believe that its bombing campaign in Pakistan, which has become a cornerstone of the Obama administration’s counterterrorism strategy, has distorted the agency’s historic mission as a civilian espionage agency and turned it into an arm of the Defense Department.

Henry A. Crumpton, a career C.I.A. officer and formerly the State Department’s top counterterrorism official, praised General Petraeus as “one of the most sophisticated consumers of intelligence.” But Mr. Crumpton warned more broadly of the “militarization of intelligence” as current or former uniformed officers assume senior jobs in the sprawling American intelligence apparatus.

At the Pentagon, the new roles raise legal concerns. The more that soldiers are used for espionage operations overseas, the more they are at risk of being thrown in jail and denied Geneva Convention protections if they are captured by hostile governments.

And yet few believe that the trend is likely to be reversed. A succession of wars has strained the ranks of both the Pentagon and the C.I.A., and the United States has come to believe that many of its current enemies are best fought with timely intelligence rather than overwhelming military firepower.

These factors have pushed military and intelligence operatives more closely together in the years since the Sept. 11, 2001, attacks.

American officials said that, for the most part, the tensions and resentments were greatly reduced from the days when Defense Secretary Donald H. Rumsfeld expanded Pentagon intelligence-gathering operations to become less dependent on the C.I.A.

The secret “Execute Order” signed by General Petraeus in September 2009 authorized American Special Operations troops to carry out reconnaissance missions and build up intelligence networks throughout the Middle East and Central Asia in order to “penetrate, disrupt, defeat and destroy” militant groups and “prepare the environment” for future American military attacks. But that order greatly expanding the role of the military in spying was drafted in consultation with the C.I.A., administration officials said.

General Petraeus has worked closely with the C.I.A. since the Bosnia mission in the 1990s, a relationship that grew during his command tours in Iraq and Afghanistan. In fact, some of the missions he has overseen seem to have been more like clandestine operations than traditional military missions.

Even before General Petraeus took over as the leader of the military’s Central Command overseeing Middle East operations nearly three years ago, he ordered a study of the threat posed by militants in a country few American policy makers had focused on — Yemen. Al Qaeda’s branch in Yemen is now considered the most immediate threat to the United States.

The general’s relationship with Yemen’s mercurial president, Ali Abdullah Saleh, was well documented in the diplomatic cables released by WikiLeaks last year. And the military’s operations there, beginning with airstrikes in December 2009, are shrouded in even more secrecy than the C.I.A.’s drone attacks in Pakistan.

Mr. Saleh, however, drew the line at General Petraeus’s request to send American advisers to accompany Yemeni troops on counterterrorism operations.

Now, with Mr. Saleh’s government teetering on the verge of collapse, General Petraeus is taking over at the C.I.A. — and will once again be part of America’s secret war in Yemen.

Tuesday, April 26, 2011

'Average Medicare enrollee is paying in $145,000 over the lifetime into the system, taking out $450,000.'

From the transcript of the April 22, 2011 PBS Newshour:

DAVID BROOKS: Well, I mean, as I said, your average Medicare enrollee, average income, making I don't know what it is, $50,000 a year, is paying in $145,000 over the lifetime into the system, taking out $450,000.

Americans have lost faith in their political system. In these circumstances, rule out nothing.

David Brooks writes in The New York Times:

On one level, American politics looks amazingly stable. President Obama’s approval rating is about 47 percent, and it hasn’t changed much in well over a year. Health care reform is mildly unpopular, and the public’s view hasn’t shifted much since before it was passed.

According to Pew Research Center polls, the public is evenly divided over which party can do a better job of handling foreign policy, the job situation, Social Security reform, health care reform and many other issues. It looks as if we’re back to the 50-50 stasis that has been the norm for the past few decades.

Moreover, the two parties are about to run utterly familiar political campaigns. The Democrats are going to promise to raise taxes on the rich to preserve the welfare state, just as they have since 1980. The Republicans are going to vow to cut taxes and introduce market mechanisms to reform the welfare state, just as they have since 1980.

The country is about to be offered the same two products: one from Soviet Production Facility A (the Republicans), and the other from Soviet Production Facility B (the Democrats). It will react just as it always has.

From this you could easily get the impression that American politics are trundling along as usual. But this stability is misleading. The current arrangements are stagnant but also fragile. American politics is like a boxing match atop a platform. Once you’re on the platform, everything looks normal. But when you step back, you see that the beams and pillars supporting the platform are cracking and rotting.

This cracking and rotting is originally caused by a series of structural problems that transcend any economic cycle: There are structural problems in the economy as growth slows and middle-class incomes stagnate. There are structural problems in the welfare state as baby boomers spend lavishly on themselves and impose horrendous costs on future generations. There are structural problems in energy markets as the rise of China and chronic instability in the Middle East leads to volatile gas prices. There are structural problems with immigration policy and tax policy and on and on.

As these problems have gone unaddressed, Americans have lost faith in the credibility of their political system, which is the one resource the entire regime is predicated upon. This loss of faith has contributed to a complex but dark national mood. The country is anxious, pessimistic, ashamed, helpless and defensive.

The share of Americans who say they trust government to do the right thing most of the time is scuttling along at historic lows. Approval of Congress and most other institutions has slid. Seventy percent of Americans think the country is on the wrong track, according to The New York Times/CBS News poll. Nearly two-thirds believe the nation is in decline, according to a variety of surveys.

Over the past months, we’ve seen a fascinating phenomenon. The public mood has detached from the economic cycle. In normal times, economic recoveries produce psychological recoveries. At least at the moment, that seems not to be happening.

The U.S. has experienced nine straight months of slow economic growth. The unemployment rate has fallen, and, in March, the U.S. economy added a robust 216,000 jobs. Yet the public mood is darkening, not brightening. The New York Times/CBS News poll showed a 13 percentage point increase in the number of Americans who believe things are getting worse. The Gallup Economic Confidence Index is now as low as it has been since the height of the recession.

Public opinion is not behaving the way it did after other recent recessions.

If you dive deeper into the polling, you see the country is not mobilized by this sense of crisis but immobilized by it. Raising taxes on the rich is popular, but nearly every other measure that might be taken to address the fiscal crisis is deeply unpopular. Sixty-three percent of Americans oppose raising the debt ceiling; similar majorities oppose measures to make that sort of thing unnecessary.

There is a negativity bias in the country, especially among political independents and people earning between $30,000 and $75,000 (who have become extremely gloomy). It is hard to rally majorities behind immigration, energy or tax reform.

At some point something is going to happen to topple the political platform — maybe a debt crisis, maybe when China passes the United States as the world’s largest economy, perhaps as early as 2016. At that point, we could see changes that are unimaginable today.

New political forces will emerge from the outside or the inside. A semi-crackpot outsider like Donald Trump could storm the gates and achieve astonishing political stature. Alternatively, insiders like the Simpson-Bowles commission or the Senate’s bipartisan “Gang of Six” could assert authority and recreate a strong centrist political establishment, such as the nation enjoyed in the 1950s.

Neither seems likely now. But in these circumstances, rule out nothing.

Public Pensions, Once Off Limits, Face Budget Cuts

From the New York Times:

When an arbitrator ruled this month that Detroit could reduce the pensions being earned by its police sergeants and lieutenants, it put the struggling city at the forefront of a growing national debate over whether the pensions of current public workers can or should be reduced.

Conventional wisdom and the laws and constitutions of many states have long held that the pensions being earned by current government workers are untouchable. But as the fiscal crisis has lingered, officials in strapped states from California to Illinois have begun to take a second look, to see whether there might be loopholes allowing them to cut the pension benefits of current employees.

The mayors of some hard-hit cities have said that the high costs of pensions have forced them to lay off workers: Oakland, Calif., laid off one-tenth of its police force last year after failing to win concessions on pension costs.

Elsewhere there is pension envy: some private sector workers, who have learned the hard way that their companies can freeze or reduce their pensions, resent that the pensions of public workers enjoy stronger legal protections. But government workers, many of whom were recruited with the promise of good benefits and pensions, say that it would be unfair — and in many cases, very likely illegal — to change the rules in the middle of the game.

It has been far more common for cities and states to adopt more modest retirement plans for future workers. But the savings from new plans are initially small, growing only over time. Other states have gone further, requiring workers to work more years before retiring, or to contribute a higher portion of their salaries toward their pensions. A few states have rolled back cost-of-living increases for retirees, prompting lawsuits. Reducing the rate at which government workers earn pension benefits — even modestly, as Detroit did — has been rare.

When Gov. Scott Walker of Wisconsin, a Republican, moved to curtail the collective bargaining rights of public worker unions in the state, he exempted police and fire unions. But they often have among the most expensive pension benefits.

A related article is in today's Washington Post.

Monday, April 25, 2011

Rep. Debbie Wasserman Schultz of Florida will soon be the Democratic National Committee chairwoman.

From the New York Times:

less than two weeks, Ms. Wasserman Schultz — mother, wife, Girl Scout leader, legislator, fund-raiser and House vote counter — will add another job to her monumentally orchestrated life. She will become the first woman elected to lead the Democratic National Committee, a role that requires grit, exaltation and inspiration. At 44, she will be the youngest committee leader in decades.

Ms. Wasserman Schultz is a New Yorker who graduated from the University of Florida and never left the state. In her Broward County district, which includes a sliver of Miami-Dade County, she is largely beloved. In 2010, she was re-elected to the House, where she has served since 2004, with 60 percent of the vote. Before that, she served 12 years in the State Legislature, becoming — at age 26 — the youngest woman elected to the Florida House.

Sunday, April 24, 2011

David Stockman: The Bipartisan March to Fiscal Madness

David A. Stockman, a former Republican representative from Michigan and President Reagan's director of the Office of Management and Budget from 1981 to 1985, writes an Op-Ed in the New York Times:

IT is obvious that the nation’s desperate fiscal condition requires higher taxes on the middle class, not just the richest 2 percent. Likewise, entitlement reform requires means-testing the giant Social Security and Medicare programs, not merely squeezing the far smaller safety net in areas like Medicaid and food stamps.

Unfortunately, in proposing tax increases only for the very rich, President Obama has denied the first of these fiscal truths, while Representative Paul D. Ryan, the chairman of the House Budget Committee, has contradicted the second by putting the entire burden of entitlement reform on the poor. The resulting squabble is not only deepening the fiscal stalemate, but also bringing us dangerously close to class war.

This lamentable prospect is deeply grounded in the policy-driven transformation of the economy during recent decades that has shifted income and wealth to the top of the economic ladder. While not the stated objective of policy, this reverse Robin Hood outcome cannot be gainsaid: the share of wealth held by the top 1 percent of households has risen to 35 percent from 21 percent since 1979, while their share of income has more than doubled to around 20 percent.

The culprit here was the combination of ultralow rates of interest at the Federal Reserve and ultralow rates of taxation on capital gains. The former destroyed the nation’s capital markets, fueling huge growth in household and business debt, serial asset bubbles and endless leveraged speculation in equities, commodities, currencies and other assets.

At the same time, the nearly untaxed windfall gains accrued to pure financial speculators, not the backyard inventors envisioned by the Republican-inspired capital-gains tax revolution of 1978. And they happened in an environment of essentially zero inflation, the opposite of the double-digit inflation that justified a lower tax rate on capital gains back then — but which is now simply an obsolete tax subsidy to the rich.

In attacking the Bush tax cuts for the top 2 percent of taxpayers, the president is only incidentally addressing the deficit. The larger purpose is to assure the vast bulk of Americans left behind that they will be spared higher taxes — even though entitlements make a tax increase unavoidable. Mr. Obama is thus playing the class-war card more aggressively than any Democrat since Franklin D. Roosevelt — surpassing Harry S. Truman or John F. Kennedy when they attacked big business or Lyndon B. Johnson or Jimmy Carter when they posed as champions of the little guy.

On the other side, Representative Ryan fails to recognize that we are not in an era of old-time enterprise capitalism in which the gospel of low tax rates and incentives to create wealth might have had relevance. A quasi-bankrupt nation saddled with rampant casino capitalism on Wall Street and a disemboweled, offshored economy on Main Street requires practical and equitable ways to pay its bills.

Ingratiating himself with the neo-cons, Mr. Ryan has put the $700 billion defense and security budget off limits; and caving to pusillanimous Republican politicians, he also exempts $17 trillion of Social Security and Medicare spending over the next decade. What is left, then, is $7 trillion in baseline spending for Medicaid and the social safety net — to which Mr. Ryan applies a meat cleaver, reducing outlays by $1.5 trillion, or 20 percent.

Trapped between the religion of low taxes and the reality of huge deficits, the Ryan plan appears to be an attack on the poor in order to coddle the rich. To the Democrats’ invitation to class war, the Republicans have seemingly sent an R.S.V.P.

Washington’s feckless drift into class war is based on the illusion that we have endless time to put our fiscal house in order. This has instilled a terrible budgetary habit whereby politicians continuously duck concrete but politically painful near-term savings in favor of gimmicks like freezes, caps and block grants that push purely paper cuts into the distant, foggy future. Mr. Ryan’s plan gets to a balanced budget in the fiscal afterlife (i.e., the 2030s); the White House’s tactic of accumulating small-fry deficit cuts over the enormous span of 12 years amounts to the same dodge.

Such fiscal jabberwocky ignores the fact that we have experienced a recession every five years or so for the last six decades; that the budget is now exposed to even more frequent and amplified cyclical turbulence amid the aftershocks of the financial crisis; and that the United States does not have a divine right to issue any amount of interim debt that suits the ideological convenience of the two parties.

Nevertheless, the Democrats are immobilized because Keynesians insist on kicking the budgetary can down the road until cyclical “demand” has in their estimation fully recovered, while Republicans sit on their hands because supply-siders insist on letting the deficit fester until tax cuts work their alleged revenue magic.

A generation ago, such spurious ideological conceits would never have taken root, because deficits had adverse consequences like rising interest rates or an outflow of monetary reserves.

But for decades now, the central banks of the world have been giving policymakers a false signal that sovereign debt is cheap and limitless. Functioning like monetary roach motels, central banks have become a place where Treasury bonds go in but never come out — thereby causing bond prices to be far higher and interest yields much lower than would obtain in a market that wasn’t rigged.

Indeed, the Fed and currency-pegging central banks in East Asia and the Persian Gulf have absorbed nearly all of Uncle Sam’s multitrillion-dollar spree of debt issuance. Moreover, about $4.6 trillion, or more than half of all debt held by the public, is now sequestered in central banks — paid for with printing-press money.

Even central banks cannot defy the canons of sound finance indefinitely, however. Japan will buy less Treasury paper as it turns inward to recover from the wrath of nature. Likewise, China will drastically curtail its currency pegging and related Treasury bond purchases in order to suppress the rip-roaring imported inflation and speculative bubbles now engulfing its domestic economy. And unless the Fed wants to ruin the value of the dollar, it will need to keep its promise to get out of the bond-buying business, too, when its second round of quantitative easing ends in June.

With the central banks no longer ready to buy, the Treasury market will once again be driven by real investors — many of them likely to demand higher interest rates owing to the heightened fiscal risks recently highlighted by Standard & Poor’s. Ominously, the biggest and baddest of these real investors, the quarter-trillion-dollar Pimco Total Return Fund, has already thrown down the gauntlet by selling Uncle Sam’s paper short.

INTEREST rates have been falling for 30 years, but Pimco’s short call could well mark a generational reversal. If so, rates will continue to rise, and the fiscal time frame will be abruptly foreshortened from the distant foggy future to the Treasury’s borrowing needs in the here and now. Then the abject deficiencies of the dueling budget plans will be self-evident.

By 2014, for example, the Ryan plan does not save a dime from the $2.2 trillion baseline for Social Security, Medicare and national security spending. Then it extends all the Bush tax cuts at a cost of $350 billion while instructing the states to reduce spending for the poor by $100 billion and the Congress to slice domestic discretionary spending by 25 percent. That toxic brew is likely to find few takers — even at a Mad Hatter’s tea party.

The latest iteration of the Obama plan is little better. By 2014, it would generate $70 billion from taxing the rich and perhaps $30 billion from the president’s belated call to re-examine our over-financed military but virtually nothing from freezes on domestic programs or from Medicare reimbursement reforms.

So the Ryan plan worsens our trillion-dollar structural deficit and the Obama plan amounts to small potatoes, at best. Worse, we are about to descend into class war because the Obama plan picks on the rich when it should be pushing tax increases for all, while the Ryan plan attacks the poor when it should be addressing middle-class entitlements and defense.

In the real world, however, the global bond market is already rumbling — and around the corner, a fiscal conflagration surely lies.

Saturday, April 23, 2011

When delay on deficits means more pain

David Ignatius writes in the Washington Post:

It’s a truth of economics and life that if you have bad news coming, take the hit early and get it behind you. You can’t start building until the debris is out of the way.

Modern illustrations of this “pain, then gain” approach start with Paul Volcker, Mr. Tough Guy , who as Fed chairman sharply raised interest rates starting in 1979 to break the inflationary psychology that had a grip on the United States. Volcker’s decisive move brought on a recession, but he built the foundations for prosperity that lasted 25 years.

Ben Bernanke earned a place on the list when he let Lehman Brothers fail in 2008 — allowing the bubble economy to burst with agonizing impact — and then created an innovative new set of monetary facilities to provide liquidity to the markets. The recovery of the U.S. financial system from that near-death experience has been remarkable, at least for banks, even though it hasn’t yet delivered on growth and employment.

Among contemporary politicians, British Prime Minister David Cameron deserves credit for “taking the hit” early with an austerity budget that helped Britain escape its own financial crisis. When he took office, Britain’s debt problem, as a percentage of its gross domestic product, was comparable to Ireland’s or Portugal’s. Cameron bit the bullet and slashed ministerial budgets an average of 19 percent. Bond traders took Britain off their target list, and a slow recovery began.

For a counterexample of the costs of taking nasty medicine in small doses, look elsewhere in Europe — especially at its most flagrant debtor, Greece. For a year now, Greece and its euro zone partners have been dancing around the fact that the country must restructure its debts or default. All the interim facilities and special funds and gimcracks haven’t changed that reality. According to the Financial Times, the markets last week were pricing the probability of a Greek default over the next five years at 67 percent, compared with 55 percent a month ago.

But Greek restructuring means pain for private banks that still hold Greek debt and for the European Central Bank. So it’s delayed and delayed, even though most analysts assume “a haircut” is inevitable.

The result of this waiting game is a death of a thousand cuts. Investors keep betting that the soothing talk is nonsense. Spreads widen, the crisis grows and measures that might have been sufficient six months before become inadequate. It’s a rolling cascade of concessions, never sufficient to stop the contagion.

To state the obvious: Attempts to avoid the pain of restructuring just make it worse in the end. That’s why many analysts now question the survival of the euro zone itself. Without a central pain dispenser in the form of a binding common fiscal policy, a common currency may be impossible.

What’s the lesson for the United States as President Obama and the Republicans maneuver for position on the budget fight — with the clock ticking toward an early July deadline for raising the debt ceiling? You wouldn’t know the answer by watching Obama bantering last week with Facebook chief executive Mark Zuckerberg, as if this were just a problem of assembling enough “friends.” No, it’s about pain — and how to share it in a way that’s fair and also acceptable to retro-populist Republicans.

The longer Obama waits to hammer out his budget deal, the greater the collateral damage is going to be. David Smick, a leading financial analyst, says that some foreign central bank regulators are cautioning about the risks of U.S. Treasury securities. Last Monday’s warning by Standard & Poor’s that it might cut America’s AAA bond rating will increase such concerns. Wall Street was also buffeted by rumors that a slowing China may reduce its purchases of Treasuries.

The market jitters are the first cuts of the knife, but many more will come until Obama and the Republicans reach an agreement. In a global economy, traders who sense weakness will keep selling until they see decisive action.

“Cut your deal, get it done,” advises Smick. “Present a downward-sloping trend line that gets to a compromise endgame,” with a mix of spending cuts and revenue increases. Obama’s task is a bit like shaping an Israeli-Palestinian peace settlement: Everyone knows what the basic elements will be; the challenge is transforming these unspoken requirements into a formal deal.

What’s crazy in this budget season is the hope that you can buy some relief with just a little harsh medicine. To quote Shakespeare’s “Macbeth”: “If it were done . . . then ‘twere well it were done quickly.”

What the World Sees in America - It's not all something to be proud of.

Peggy Noonan writes in the Wall Street Journal:

I want to talk a little more this holiday week about what I suppose is a growing theme in this column, and that is an increased skepticism toward U.S. military intervention, including nation building. Our republic is not now in a historical adventure period—that is not what is needed. We are or should be in a self-strengthening one. Our focus should not be on outward involvement but inner repair. Bad people are gunning for us, it is true. We should find them, dispatch them, and harden the target. (That would be, still and first, New York, though Washington too.) We should not occupy their lands, run their governments, or try to bribe them into bonhomie. We think in Afghanistan we're buying their love, but I have been there. We're not even renting it.

Our long wars have cost much in blood and treasure, and our military is overstretched. We're asking soldiers to be social workers, as Bing West notes in his book on Afghanistan, "The Wrong War."

I saw it last month, when I met with a tough American general. How is the war going? he was asked. "Great," he said. "We just opened a new hospital!" This was perhaps different from what George Patton would have said. He was allowed to be a warrior in a warrior army. His answer would have been more like, "Great, we're putting more of them in the hospital!"

But there are other reasons for a new skepticism about America's just role and responsibilities in the world in 2011. One has to do with the burly, muscular, traditional but at this point not fully thought-through American assumption that our culture not only is superior to most, but is certainly better in all ways than the cultures of those we seek to conquer. We have always felt pride in our nation's ways, and pride isn't all bad. But conceit is, and it's possible we've grown as conceited as we've become culturally careless.

We are modern, they are not. We allow women freedom, they do not. We have the rule of law, they do not. We are technologically sophisticated, they are the Flintstones. We have religious tolerance. All these are sources of legitimate satisfaction and pride, especially the last. Our religious pluralism is, still, amazing.

I lately think of Charleston, S.C., that beautiful old-fashioned, new-fashioned city. On a walk there in October I went by one of the oldest Catholic churches in the South, St. Mary's, built in 1789. Across the street, equally distinguished and welcoming, was Kahal Kadosh Beth Elohim, a Jewish congregation founded in 1749. They've been across from each other peacefully and happily for a long time. I walked down Meeting Street to see the Hibernian Society, founded in 1801. My people wanted their presence known. In a brochure I saw how the society dealt with Ireland's old Catholic-Protestant split. They picked a Protestant president one year, a Catholic the next, and so on. In Ireland they were killing each other. In America they were trading gavels. What a country! What a place. What a new world.

We have much to be proud of. And we know it. But take a look around us. Don't we have some reasons for pause, for self-questioning? Don't we have a lot of cultural repair that needs doing?

Imagine for a moment that you are a foreign visitor to America. You are a 40-year-old businessman from Afghanistan. You teach a class at Kabul University. You are relatively sophisticated. You're in pursuit of a business deal. It's your first time here. There is an America in your mind; it was formed in your childhood by old John Ford movies and involves cowboy hats and gangsters in fedoras. You know this no longer applies—you're not a fool—but you're not sure what does. You land at JFK, walking past a TSA installation where they're patting the genital areas of various travelers. Americans sure have a funny way of saying hello!

You get to town, settle into a modest room at the Hilton on Sixth Avenue. You're jet-lagged. You put on the TV, not only because you're tired but because some part of you knows TV is where America happens, where America is, and you want to see it. Headline news first. The world didn't blow up today. Then:

Click. A person named Snooki totters down a boardwalk. She lives with young people who grunt and dance. They seem loud, profane, without values, without modesty, without kindness or sympathy. They seem proud to see each other as sexual objects.

Click. "Real Housewives." Adult women are pulling each other's hair. They are glamorous in a hard way, a plastic way. They insult each other.

Click. Local news has a riot in a McDonalds. People kick and punch each other. Click. A cable news story on a child left alone for a week. Click. A 5-year-old brings a gun to school, injures three. Click. A show called "Skins"—is this child pornography? Click. A Viagra commercial. Click. A man tried to blow up a mall. Click. Another Viagra commercial. Click. This appears to be set in ancient Sparta. It appears to involve an orgy.

You, the Kabul businessman, expected some raunch and strangeness but not this—this Victoria Falls of dirty water! You are not a philosopher of media, but you know that when a culture descends to the lowest common denominator, it does not reach the broad base at the bottom, it lowers the broad base at the bottom. This "Jersey Shore" doesn't reach the Jersey Shore, it creates the Jersey Shore. It makes America the Jersey Shore.

You surf on, hoping for a cleansing wave of old gangster movies. Or cowboys. Anything old! But you don't find TMC. You look at a local paper. Headline: New York has a 41% abortion rate. Forty-four percent of births are to unmarried women and girls.

You think: Something's wrong in this place, something has become disordered.

The next morning you take Amtrak for your first meeting, in Washington. You pass through the utilitarian ugliness, the abjuration of all elegance that is Penn Station. On the trip south, past Philadelphia, you see the physical deterioration that echoes what you saw on the TV—broken neighborhoods, abandoned factories with shattered windows, graffiti-covered abutments. It looks like old films of the Depression!

By the time you reach Washington—at least Union Station is august and beautiful—you are amazed to find yourself thinking: "Good thing America is coming to save us. But it's funny she doesn't want to save herself!"

My small point: Remember during the riots of the 1960s when they said "the whole world is watching"? Well, now the whole world really is. Everyone is traveling everywhere. We're all on the move. Cultures can't keep their secrets.

The whole world is in the Hilton, channel-surfing. The whole world is on the train, in the airport, judging what it sees, and likely, in some serious ways, finding us wanting.

And, being human, they may be judging us with a small, extra edge of harshness for judging them and looking down on them.

We have work to do at home, on our culture and in our country. A beautiful Easter to St. Mary's Church of Charleston, and happy Passover to Kahal Kadosh Beth Elohim.

Friday, April 22, 2011

Biden deficit task force off to rocky start

From the Washington Post:

A congressional task force launched by President Obama last week to help cut the federal deficit is off to a rocky start, with some members complaining that the agenda is destined to provide political theater, not a sweeping rewrite of spending and tax policy.

Several members said it was unclear whether the commission, to be chaired by Vice President Biden, will become the source of a bipartisan deal on cutting the deficit or simply serve as a diversion while an agreement is quietly negotiated elsewhere. That’s what happened in December, when public talks on Capitol Hill over extending Bush-era tax cuts were a cover for back-door negotiations, led by Biden, that ultimately yielded a deal.

Obama called for the commission last week during a long-awaited speech outlining a strategy for taming the nation’s borrowing. He proposed that each party in the House and Senate name four members, for a total of 16. White House officials had calculated that congressional leaders would find it easier to navigate the internal politics of their caucuses if there were a relatively large number of slots.

But congressional leaders rejected the plan, concluding that 16 members would be unwieldy. Instead, Senate and House Democrats are sending two lawmakers each and Republicans one senator and one House member.

At least three of the lawmakers named to the commission — Van Hollen and Sens. Max Baucus (D-Mont.) and Jon Kyl (R-Ariz.) — were part of the public tax-cut talks in December that were overtaken by secret negotiations.

An administration official said Thursday that, this time around, there are no side talks and that Obama remains committed to the Biden commission.

But there is already a group of six senators, three Democrats and three Republicans, who are working on their own to reach a deficit reduction deal. The “Gang of Six” could propose, possibly next month, a plan that includes deeper entitlement cuts than Democrats have ever supported and tax increases that previously have been anathema for Republicans.

The most pressing concern for the Biden commission is to determine what to do about the debt ceiling. The government needs to keep borrowing money to pay off other loans and meet its obligations. By July 8, the Treasury will run out of options and, without some agreement, begin defaulting. The administration wants to reach a deal quickly before concerns over a possible default start to roil financial markets.

Nation’s Mood at Lowest Level in Two Years, Poll Shows

From the New York Times:

Americans are more pessimistic about the nation’s economic outlook and overall direction than they have been at any time since President Obama’s first two months in office, when the country was still officially ensnared in the Great Recession, according to the latest New York Times/CBS News poll.

The dour public mood is dragging down ratings for both parties in Congress and for President Obama, the poll found.

Wednesday, April 20, 2011

Bill cracking down on illegals deserves signature

Editorial from the Marietta Daily Journal:

The White House and Congress have taken a "do-nothing" approach to curbing illegal immigration for decades, even as the number of illegals pouring into this country surged to tsunami proportions, and even as public opinion now has shifted largely in favor of putting an end to the problem.

With the president and Congress still content to sit on the sidelines - and with a president and Democratic-controlled Senate whose likely approach would exacerbate the problem, not cure it - it has fallen on the states to take the lead.

Georgia is believed to have one of the largest populations of illegal immigrants in the country, and that's one reason that the state Legislature passed one of the toughest reform laws in the country during this session.

The new law has two main elements.

The first - and most far-reaching in its probable effect - requires any business with more than 10 employees to use the E-verify system to check the employee or applicant's legality. Some businesses and farmers howled about that provision, even though use of the E-verify system is free. But logic indicates that drying up the supply of jobs for illegals will make our state less of Mecca for them, and thereby end what has become a huge drain on the state and local budgets and other public resources.

The second permits law enforcement officers to check the legal status of someone under investigation for another suspected violation of the law. It does not allow them to stop people at random or based on their skin color and ask about their immigration status. Nor does it carbon copy Arizona and set a fairly low "reasonable suspicion" standard for allowing law enforcement to ask that question. That means the outcome of the Obama administration's challenge to Arizona's law is unlikely to directly effect enforcement of the Georgia law.

"Georgia has more illegal aliens than the state of Arizona, and my understanding is that recently released Census figures indicate that the state with the fastest rate of growth of illegal aliens over the past decade was Georgia," state Rep. Rich Golick (D-Smyrna), one of the co-sponsors of the bill, told the Marietta Daily Journal. "This has had a draining effect on our dwindling resources, especially given the economic recession."

Some of the opponents of the new law are predicting it will lead to boycotts of Georgia and other forms of retaliation.

"It will be an economic disaster," said one of them optimistically - which tells you all you need to know about their skewed view.

Other opponents continue to lamely argue that immigration is a federal issue and that states should take a hands-off approach. In other words, continue to let the problem fester and fester.

To their credit, most Georgia legislators - and most of Cobb's - felt otherwise and voted to pass legislation to address the matter.

That bill is now on the desk of Gov. Nathan Deal. He has said he plans to sign it, and we would encourage him to waste no time in doing so.

Immigration Is Lead Topic at White House. If he takes it on now as a 2nd signature issue (to go with his health law), plus his wars, he is toast.

From the New York Times:

President Obama told a gathering of business, labor, religious and political leaders at the White House on Tuesday that he remains committed to an overhaul of the nation’s immigration laws and wants to try again in the coming months to push Congress to pass a bill.

With his re-election campaign launched this month and Latino communities growing increasingly frustrated with his immigration policies, Mr. Obama summoned more than 60 high-profile supporters of the stalled overhaul legislation to a strategy session, looking for ways to revive it.

Prospects for the proposed policy, which would grant legal status to millions of illegal immigrants and revamp the immigration system, seem bleak in this Congress, with staunch Republican opponents of the bill controlling pivotal committee positions in the House of Representatives. Recently Latino leaders have stepped up their criticism of Mr. Obama, as deportations have reached record numbers under his administration and he has offered no relief from the crackdown on immigrant communities.

Tuesday, April 19, 2011

My lst go figure reaction; now this: (1) White House actions pushing Saudi Arabia toward China and Russia; (2) Egyptians Court U.S. Foes Iran & Syria

A 1/27/11 post on Egypt and our long ally Mr. Mubarak was entitled "Go figure: As Arabs protest, Obama administration offers assertive support"


From the Wall Street Journal:

Iran and Egypt's new government signaled Monday they were moving quickly to thaw decades of frosty relations, worrying the U.S., Israel and Saudi Arabia that the overtures could upset the Mideast's fragile balance of power.

Iran said it appointed an ambassador to Egypt for the first time since the two sides froze diplomatic relations more than three decades ago, the website of the Iranian government's official English-language channel, Press TV, reported late Monday.

Also Monday, officials at Egypt's Ministry of Foreign Affairs confirmed that new foreign minister Nabil Elaraby is considering a visit to the Gaza Strip—an area controlled by Hamas, a militant Palestinian Islamist group backed by Tehran and until now shunned by Cairo.

The announcements follow a rare meeting earlier this month between a high-level Iranian diplomat and Mr. Elaraby, after which the foreign minister told reporters that Egypt has "opened a new page" with Iran.

American officials said they are concerned that Egypt's apparent determination to re-establish relations with Iran is part of a broader reordering of its foreign policy. They worry that such a turn could empower Iran and its regional clients Hamas in the Gaza Strip and Hezbollah in Lebanon, both of which are labeled terrorist groups by the U.S.

Egypt's outreach has also extended to Syria, a close ally of Iran. In early March, Egypt's new intelligence chief, Murad Muwafi, chose Syria for his first foreign trip. It remains unclear what was discussed at the meeting, previously reported by The Wall Street Journal.

For decades, Egypt was a vital player in a Middle East balance of power: With its large population, U.S.-financed military and diplomatic ties with Israel, it was a counterweight against Israel's foes, primarily Iran and Syria. But as Iran's power in the region has grown and the Middle East has become more defined by political Islam, Egypt's reliably anti-Iranian stance cost it significant diplomatic capital. With Cairo unable to engage Tehran, it lost its position as one of the region's chief diplomatic brokers, eclipsed by Qatar, Syria and Saudi Arabia.

Egyptian officials and several foreign-policy analysts say the new diplomacy isn't so much an expression of affinity with Iran as it is a broader effort to reclaim lost diplomatic prestige. Egypt's new government presents the policy shift as part of a general diplomatic reopening, rather than a reordering, of its regional relationships.

"Egypt's role cannot be underestimated. But that role over the last few decades, I think 30 years or so, has diminished," said Menha Bakhoum, spokeswoman for Egypt's Ministry of Foreign Affairs. "If there's anything happening now, I think that will be regaining that position that we've had for years and years and years."

Western reactions to Egypt's entreaties to Iran were exaggerated, Ms. Bakhoum said Monday.

Later, Iran's Press TV reported Ali Akbar Sibouyeh, a career diplomat, was appointed ambassador following negotiations between Mr. Elaraby and Iranian Foreign Minister Ali Akar Salehi. An Iranian official at the United Nations couldn't immediately confirm the report.

Concerns over Iran's regional influence flared anew Monday. The Gulf Cooperation Council, a grouping that includes Saudi Arabia and Qatar, asked the United Nations Security Council to stop what it calls "flagrant Iranian interference" in Bahrain and other GCC countries. Saudi Arabia and Bahrain have accused Shiite Iran of aiding Bahrain's predominantly Shiite anti-government protesters.

Iran's foreign ministry spokesman said the criticism was surprising "while the military forces of some members of the council have…cracked down on defenseless men and women."

Iran's post-revolutionary Islamist government cut diplomatic ties with Egypt in 1980 when Egypt became the first Arab country to grant diplomatic recognition to Israel. In the decades after Hosni Mubarak assumed office in 1981, he treated Tehran with deep suspicion because of its support for Hamas, a Palestinian Islamist militant group with ties to Egypt's Muslim Brotherhood, Mr. Mubarak's most powerful political opponents.

Concerns about Iran as a destabilizing force haven't necessarily evaporated since the fall of Mr. Mubarak, who was ousted by countrywide protests in February. "I know from some Egyptians in the government that they still have security concerns about what Iran is doing in the region," said a Western diplomat.

Throughout Mr. Mubarak's rule, Egypt maintained high-level diplomacy with Iran that stopped just short of normal relations. The Egyptian ministry of foreign affairs maintained an "Interests Section" in Tehran and an ambassador who worked out of Dubai, said Ms. Bakhoum.

The change in tone toward Iran is incremental, said Ms. Bakhoum. But it could have implications for another of Mr. Elaraby's stated foreign policy priorities—resolving the conflict between Israel and the Palestinians.

Helping to resolve that conflict was one of the Mubarak regime's most significant foreign policy goals; failing to do so contributed to Egypt's moribund diplomatic stature, analysts say.

Engaging Iran may help Egypt proceed with negotiations with Hamas, which has governed the Gaza Strip under an Israeli blockade since the group seized power from the more moderate Fatah in 2007. Any headway toward resolving the seemingly intractable Middle East conflict would be hugely popular among Egyptians, said Mohammed Abdel Salam, an expert on Iran at the government-financed Al Ahram Center for Political Strategic Studies, a Cairo think tank.

Amr Moussa, the former Secretary General of the Arab league, owes his front-runner status in Egyptian presidential elections later this year to his forceful statements against Israel when he was Egypt's foreign minister during the 1990s. Islamist groups in particular have been empowered by Egypt's abrupt shift to democracy, and analysts expect that Egypt's next government will have to answer to growing calls that it break with U.S. foreign-policy objectives.

Some Islamist political voices within Egypt have already begun their own sort of diplomacy. Magdi Hussein, the chairman of the Islamist Al Amal (Labor) Party, met with Iranian foreign minister Ali Akbar Salehi earlier this week in Tehran. Both sides encouraged a quickening of the diplomatic thaw between the two countries.

Egypt appears to be following a foreign relations pattern set by Turkey in the past decade—a strong American ally whose foreign policy has nevertheless decoupled from American interests. Regardless of its final position on Iran, the country is likely to be significantly less beholden to U.S. interests, American officials said, if only because Egypt was such a reliable ally under Mr. Mubarak.

"It's hard to imagine a change that would improve on what we had" with the previous Egyptian regime, one U.S. official said.

But the officials caution that they haven't yet seen any indications of a radical shift away from the U.S. by Egypt, or moves toward a markedly closer relationship with Iran. The Egyptian military remains pro-American, U.S. officials say, and they expect Egypt's generals to provide a moderating influence.

"Opening an embassy isn't saying 'we want to be allies' or anything like that," the official said.

Another official said the U.S. expects "more noise" from Egypt, especially when it comes to Israel. The official also said the U.S. is probably going to have less influence over Egypt, and thus less influence in the region at a crucial time.

But the broad thrust of the Egypt's relationship with the U.S. and Egypt's foreign policy in general is expected to remain "more or less the same," the official said.

Also anchoring Egypt firmly in the pro-West camp is the military's close relationship with Saudi Arabia, which remains firm, the official said. But the Saudis are also looking warily at the political changes unfolding in Egypt, unsure whether they will be able to count as much upon the emerging government there as they could with Mr. Mubarak as a check against Iran's expansionist goals in the region.

Riyadh wasn't happy with the passage of an Iranian warship through the Suez Canal earlier this year. The move appears to be part of an Iranian strategy to expand its military presence around the Middle East, even as sectarian tensions rise.

Saudi Arabia's foreign ministry spokesman declined to comment on the developments, which he said were the sovereign affairs of foreign states.

Sunday, April 17, 2011

From the Cracker Squire Archives (One can argue the fed. gov't has failed to protect our borders & enforce visa & citizenship issues.)

The Wall Street Journal has an April 16, 2011 article entitled "Georgia Lawmakers Target Illegal Immigration - Governor Plans to Sign Bill Granting Police Authority to Check a Suspect's Status."

The following is a 5-26-07 post entitled "The complicated mess we have with illegal immigration and how to solve the problem -- More on the 1986 legislation":

A 5-25-07 post reads:

If you grant legal status to those here illegally without first securing the border, millions more will flood into our country illegally. That's exactly what happened with the flawed immigration law that was passed in 1986, and our country has been paying the price ever since.

TIME said this about the 1986 legislation:

[T]he failed amnesty of 1986 [is] widely viewed as the genesis of the current crisis. The moment newly legalized farmworkers realized they had better options, they left for the cities instead of staying in low-paying agriculture jobs. Their exodus from the fields opened the door to an even larger wave of illegal immigration.

And another article in TIME gives us these details about the legislation:

The immigration overhaul in 1986 was supposed to have fixed the root problem of an uncontrolled influx by making it illegal for U.S. employers to hire undocumented workers and offering an amnesty to illegal immigrants who had been here for five years at that point. Instead, the best estimates suggest that since then, the number of illegal immigrants has more than tripled.

The 1986 Immigration Reform and Control Act made it illegal for employers to knowingly hire undocumented workers and imposed penalties of up to $11,000 for each violation. But lawbreakers are rarely punished. In 2005 the government issued just three notices of intent to fine companies for employing illegal workers, down from 178 in 2000.

It's easy to understand why the idea of an amnesty [sparks] such a negative reaction. The country tried one with the 1986 law. Nearly 3 million people took advantage of it, and the amnesty was followed by an explosion in illegal immigration.


And one more post from the Cracker Squires Archives on the topic of where states are acting because of the failure of the federal government to do so.

This one is a 6-24-07 post entitled "Senator Kennedy and President Reagan on the Immigration Reform and Control Act of 1986" that reads:

Senator Ted Kennedy said: "This amnesty will give citizenship to only 1.1 to 1.3 million illegal aliens. We will secure the borders henceforth. We will never again bring forward another amnesty bill like this."

[Actually, almost 3 million illegal immigrants were granted amnesty under this legislation, and the amnesty was followed by an explosion in illegal immigration.]

President Ronald Reagan said: "Future generations of Americans will be thankful for our efforts to humanely regain control of our borders and thereby preserve the value of one of the most sacred possessions of our people, American citizenship."

Helping Drunken Drivers Avoid Tickets, but Not Wrecks

The New York Times reports that BlackBerry has banned apps that track the locations of sobriety checkpoints so drivers can reroute around them. Google and Apple have not.

John Tanton, who helped start all 3 major national groups fighting to reduce immigration, has been called 'the most influential unknown man in Ameica'

This article entitled "The Anti-Immigration Crusader" is a most informative read in the New York Times. Mr. Tanton has been on the case for some 30 years.

Durbin: 'Borrowing 40 cents out of every dollar we spend for missiles or food stamps is unsustainable.' - The Squire: Take a hike Erick Erickson.

Saxby Chambliss, a Republican.

Senator Richard J. Durbin, a Democrat.

From the New York Times:

Days after President Obama called for forming a bipartisan group in Congress to begin negotiating a $4 trillion debt-reduction package, the parties have not even agreed to its membership. Yet six senators — three Democrats, three Republicans — say they are nearing consensus on just such a plan.

Whether the so-called Gang of Six can actually deliver something when Congress returns from a recess in May could determine whether Democrats and Republicans can come together to resolve the nation’s fiscal problems before the 2012 elections.

As Mr. Obama and Republican leaders have warred publicly over the budget, this small group of senators has spent four months in dozens of secretive meetings in offices at the Capitol and over dinner at the suburban Virginia home of Senator Mark Warner, a Democrat.

The senators have weathered criticism from bloggers and even colleagues, including the leaders of their own parties, who oppose tampering with Social Security or taxes. The gang nearly collapsed several times, including two weeks ago.

The group’s oldest members — Senator Richard J. Durbin, 66, a progressive from Illinois who counts the Senate’s only socialist as a friend and ally, and Senator Saxby Chambliss, 67, a genial Georgia conservative whose nasty first campaign left lingering bad feelings among Democrats, and who is a confidant of Speaker John A. Boehner — illustrate that even with the mounting federal debt intensifying the partisan divide over spending and taxes, the severity of the fiscal threat is forging unlikely alliances.

If Mr. Durbin and Mr. Chambliss can cut a deal on Social Security and new tax revenues, their associates say, then just maybe all of Washington can come together.

For Republicans, that means accepting higher taxes and lower military spending. For Democrats, it would mean agreeing to curbs on the unsustainable growth of Medicare and Medicaid spending, as well as tweaks to Social Security, to avert a big shortfall in 2037 and as a trade-off for Republicans’ support on taxes.

Mr. Durbin and Mr. Chambliss reached those conclusions last year, each confronting the widening annual gaps between projected revenues and spending as the population ages and health care prices rise.

Mr. Durbin, the No. 2 leader in the Senate, was on Mr. Obama’s bipartisan fiscal commission, which recommended some solutions. Mr. Chambliss had joined informally with Mr. Warner to host private tutorials for Senate colleagues of each party with experts like Ben S. Bernanke, the Federal Reserve chairman.

The two senators’ paths merged last December.

Several months ago, with Mr. Durbin as its most surprising yes vote, 11 of the 18 members of the president’s fiscal commission backed a blueprint to pare $4 trillion from projected deficits in the first decade. It would cut domestic and military spending; curb Medicare and Medicaid; and overhaul the tax code, limiting or repealing tax breaks and using the new revenues to lower tax rates and reduce deficits. Separate from its debt-reduction plan, the panel proposed benefit and payroll tax changes to stabilize Social Security for 75 years.

Immediately, Mr. Chambliss and Mr. Warner enlisted four senators from the commission majority to negotiate writing the recommendations into legislation. Besides Mr. Durbin, the others were Senator Kent Conrad, a North Dakota Democrat who leads the Budget Committee, and Senators Tom Coburn of Oklahoma and Michael D. Crapo of Idaho, both Republicans.

“As I said to a Republican recently,” Mr. Durbin said in an interview, “it’s like we’re on a long flight here and we’ve come so far there’s no turning back — we’ve got to land the plane.”

The effort holds peril regardless of the outcome. If successful, a plan could be taken up as Congress debates this spring over raising the nation’s $14.2 trillion debt limit. But the group is hardly assured of support from Senate colleagues, let alone lawmakers in the House, where Republicans, including dozens of new Tea Party supporters, refuse to consider raising revenues. If the group fails, that would probably signal doom for the broader bipartisan effort Mr. Obama wants.

Mr. Durbin, the liberal Democrat, and Mr. Chambliss, the conservative Republican, may have the most at stake. Mr. Durbin could be isolated in the Senate leadership, and Mr. Chambliss potentially vulnerable given Republicans’ penchant for ousting incumbents who deviate from the antitax line. Neither senator faces re-election until 2014.

An administration official recalled that in early 2010, when Mr. Durbin was named to Mr. Obama’s fiscal commission, another White House official told its co-chairmen, “You’ll never get Durbin’s vote.”

Nine months later, Mr. Durbin announced his support in The Chicago Tribune for the recommendations the chairmen had negotiated with members. “The question my closest political friends are asking is this: Why is a progressive like Dick Durbin voting for this deficit commission report?” he wrote. The answer: “Borrowing 40 cents out of every dollar we spend for missiles or food stamps is unsustainable.”

So, Mr. Durbin added, “when we engage in the critical decisions about our nation’s future budgets, I want progressive voices at the table to argue that we must protect the most vulnerable in our society and demand fairness in budget cuts.”

That has been his mantra with disappointed allies in labor, women’s groups and the Senate. Mr. Durbin, in the interview, cited a private meeting requested by Senator Bernie Sanders, independent of Vermont, a socialist and “a good friend.” Their exchange, Mr. Durbin said, captured the increasing difficulty in being a good progressive “at a time of limited resources.”

Mr. Sanders said he respected Mr. Durbin for his good intentions. “But I think the direction in which he is going in working with some of the most very conservative members of the Senate is not correct,” Mr. Sanders said.

Critics suggest that Mr. Durbin is seeking a new role to counter the prominence of Senator Charles E. Schumer of New York, his roommate and his rival in the Senate leadership.

But Andy Stern, a former labor leader who was on the fiscal commission and opposed its report, defended Mr. Durbin, saying, “It’s classic Washington that we can’t imagine that someone does something because they think it’s the right thing to do.”

That is Mr. Chambliss’s claim as well. “I hear my critics; I pay attention to my constituents,” he said in an interview. “But you’ve got to do the right thing and what’s best for the country.”

And Mr. Chambliss has been increasingly outspoken in arguing that additional revenues must be part of a debt-reduction plan, given the scale of the problem.

“I’m taking arrows from some on the far right,” he told the Rotary Club of Atlanta in an appearance with Mr. Warner on Monday. “Are some people going to pay more in taxes? You bet.”

A bolt came in February from Grover Norquist, a Republican antitax activist, who wrote to Mr. Chambliss, Mr. Coburn and Mr. Crapo to say they would violate his group’s “Taxpayer Protection Pledge” if they supported raising revenues for deficit reduction.

The trio countered the same day, releasing a letter telling Mr. Norquist that their effort broke no pledge “but rather affirms the oath we have taken to support and defend the Constitution of the United States against all enemies, foreign and domestic, of which our national debt may now be the greatest.”

Perhaps more troublesome for Mr. Chambliss have been critics at home like Erick Erickson, a conservative blogger, Atlanta radio talk-show host and CNN contributor. “Is Saxby Chambliss Becoming a Democrat?” Mr. Erickson asked in a recent blog post.

For many actual Democrats, Mr. Chambliss remains negatively defined by his 2002 defeat of Senator Max Cleland, a triple-amputee veteran of Vietnam, after a campaign that included an ad picturing Mr. Cleland with Osama bin Laden. Mr. Chambliss’s work on the Gang of Six has done as much as anything to soften attitudes.

Saturday, April 16, 2011

Peggy Noonan's prediction is one with which I agree: Obama Is Likely to Lose - But Republican unseriousness may be his trump card.

Peggy Noonan writes in the Wall Street Journal:

What if everything we think we know about the president's political position is wrong? That's what I think became clear this week.

You know the conventional wisdom. It is that unemployment ticking down, plus the economy inching back, plus the power of the presidency to affect events, equals a likely Obama victory in 2012. Smart people, especially Republicans, believe this. But how about this for a thought: It's not true. It's all wrong. Barack Obama can be taken, and his adversaries haven't even noticed. In fact, he will likely lose in 2012. Only one thing can save him. More on that further down.

Let's start with the immediate and go to the overarching. The president is immersed in another stressed and unsuccessful spring after a series of losing seasons. Internationally, he's involved in a confused effort that involves bombing Libyan government troops and sometimes their rebel opponents, leaving the latter scattered and scurrying. Responsibility to protect is looking like tendency to deflect.

Domestically, the president's opponents seized the high ground on the great issue of the day, spending and debt, and held it after the president's speech this week. In last week's budget duel, the president was outgunned by Republicans in the House and outclassed by Paul Ryan, who offered seriousness and substance as a unique approach to solving our fiscal problems.

In this week's polls: An Ipsos survey says 69% of Americans believe the country is on the wrong track, up five points since March. Zogby has only 38% of national respondents saying Mr. Obama deserves re-election, with 55% wanting someone new. Mr. Obama carried Pennsylvania in 2008 by double digits; a poll there this week shows only 42% approving of his leadership, with 52% disapproving. Gallup had the president's support slipping among blacks and Hispanics, with the latter's numbers dramatic: 73% supported him when he was inaugurated, 54% do now. Support among whites on Inauguration Day was 60%. Now it is 39%.

We're all so used to reporting the general trend of these polls that we fail to see their significance: The more that people experience his leadership, the less they like his leadership. There's no real reason to think upticks in this direction or that will seriously change this. Another way to say it is that there have been upticks that might have benefited the president, and so far they haven't.

At this point everyone mentions Mr. Obama's personal approval numbers, which are consistently higher than his leadership numbers. The RealClearPolitics average puts his personal approval at 47.6%, which doesn't sound bad.

But let me offer a hunch based on conversations with people from many walks of life and all regions the past 18 months. The president's personal numbers are probably lower than the polls report. Not that the polls are dishonest, but the American people don't want to not like Mr. Obama. They don't want to tell a young pollster that they don't like a man they elected two years ago, with excitement and hope, by a margin of 9.5 million votes. There are two things I have never heard, not once, in the past year: "I love this guy—I love Obama," and "If only John McCain were president, everything would be better."

I suspect, and it's only a suspicion, that there's a degree to which people tell pollsters they like Mr. Obama to take the sting out of the fact that they just told the pollster they don't approve of his leadership.

We all get stuck in the day-to-day and lose sight of the overarching, but the overarching fact of Mr. Obama's presidency is that he made a bad impression his first years in office and has never turned that impression around.

He spent his first 14 months moving on what he was thinking about—health care—and not what the public was thinking about: the economic crash, jobs, spending. He seemed not to be thinking like everyone else, which underscored the idea that he was unresponsive to the crises they were seeing. It's hard to get past that.

His speech this week brought together all the strands of his flawed leadership. It was at moments clever, but merely clever, not up to the needs of the moment—and cleverness in a time of crisis comes as an affront. The speech seemed oblivious to recent history, as if the president had just discovered something no one knows about, a problem with spending, and has decided to alert us to the danger. He said other politicians attempt to cut by focusing on "waste and abuse," but he knows the real secret: The problem is entitlement spending. But addressing entitlements is all anyone serious has been talking about for years; it's what the Ryan plan is all about!

The speech was intellectually incoherent. An administration that spent two years saying, essentially, that high spending is good is suddenly insisting high spending is catastrophic. The president appealed for bipartisan efforts, but his manner and approach leave his appeals sounding like diktats. His attempts to seem above the fray leave him seeming distanced and unwilling to risk anything.

Most important, the speech signaled that the White House, after all this time, sees the question of spending as a partisan tool, a weapon to be deployed in an election, and not an actual crisis. This is disrespectful toward citizens who feel honest alarm.

Because of these flaws, the speech will have no afterlife, and a major speech with no afterlife might as well not have been given.

You would think Democratic professionals, who read the same numbers Republicans do and pick up similar trends, would be hanging their heads in despair.

They are not. They have hope. Their hope is that Republicans in the early caucus and primary states will go crazy.

They hope the GOP will nominate for the presidency someone strange, extreme or barely qualified. They hope that in a mood of antic cultural pique, or in a great acting out of disdain for elites, or to annoy the mainstream media, Republican voters will raise high candidates who are unacceptable to everyone else. Everyone else of course being the great and vital center, which hires and fires presidents. The Democrats' hope is that centrists will look at the Republican nominee and, holding their nose, choose the devil they know. Especially if the one they don't know seems to have little horns under his hair.

Republicans voting in recent presidential primaries have tended to pick the candidates who are viewed as the moderate in the race—Bob Dole in 1996, George W. Bush in 2000, John McCain in 2008. But in truth, there are some pretty antic candidates out there this year.

The great question of the coming year is not, "Will Obama reignite his base?" or, "Will the Democrats outraise and outspend the GOP?" It is: Will the GOP be serious? Will Republicans be equal to their history, their tradition and the moment? If they are—if they recruit and support candidates who can speak to the entire country, who have serious experience and accomplishments, who are grounded and credible, then they will win centrist support. And with it they will likely win the thing without which they cannot achieve the big changes they seek, and that is the presidency.

Friday, April 15, 2011

Personally, I remain in shock: (1) Even his allies wonder if he had made a tactical error. (2) The tenor of the speech was 'surprising' says Bowles.

From the Washington Post:

The three Republican congressmen saw it as a rare ray of sunshine in Washington’s stormy budget battle: an invitation from the White House to hear President Obama lay out his ideas for taming the national debt.

They expected a peace offering, a gesture of goodwill aimed at smoothing a path toward compromise. But soon after taking their seats at George Washington University on Wednesday, they found themselves under fire for plotting “a fundamentally different America” from the one most Americans know and love.

“What came to my mind was: Why did he invite us?” Rep. Dave Camp (R-Mich.) said in an interview Thursday. “It’s just a wasted opportunity.”

The situation was all the more perplexing because Obama has to work with these guys: Camp is chairman of the House Ways and Means Committee, responsible for trade, taxes and urgent legislation to raise the legal limit on government borrowing. Rep. Jeb Hensarling (Tex.) chairs the House Republican Conference. And Rep. Paul Ryan (R-Wis.) is House Budget Committee chairman and the author of the spending blueprint Obama lacerated as “deeply pessimistic” during his 44-minute address.

At a time when the parties risk economic catastrophe unless they can come together to raise the debt limit, Obama’s partisan tone made no sense, Republicans across Capitol Hill said Thursday. Even some Obama allies wondered whether the president had made a tactical error.

“Yes,” the tenor of the speech was surprising, said Erskine Bowles, who headed Obama’s fiscal commission and is working with a bipartisan group of six senators to develop a compromise plan to rein in borrowing.

Asked about the president’s decision to deliver such an address at a particularly sensitive moment, Bowles defended Obama, and said his sharp tone would not derail the bipartisan group’s work. “This is not easy,” he said. “There are plenty of opportunities to make mistakes.”

At two Chicago fundraisers for his reelection campaign Thursday night, Obama defended his GWU speech. “That wasn’t a critique,” he said of his repeated attacks on Ryan’s ideas. “That was a description.”

“What we now have is a very stark choice,” Obama told a group of about 50 donors at a Chicago restaurant called MK. “Under their vision, we can’t invest in roads and bridges and broadband and high-speed rail. I mean, we would be a nation of potholes, and our airports would be worse than places that we thought -- that we used to call-- the Third World, but who are now investing in infrastructure.”

At an another appearance, Obama said: “The speech I gave yesterday [Wednesday] was not a partisan shot at the other side. It was an attempt to clarify the choice that we have as a country right now.”

The president argues the GOP budget will drastically will reduce infrastructure spending. But he offered no specific evidence the Republican spending reductions would actually affect American airports.

Administration officials note that Ryan and other Republicans have been just as pointed in their attacks on Obama.

“What the president did yesterday was describe the vision put forward by the House Republican plan and describe his own vision, the vision that he thinks is preferable,” Carney said Thursday. “Just because there’s a lot of heat in these discussions, in these debates, a lot of firmly held convictions, doesn’t mean that we cannot come together and find common ground.”

Still, Republicans said, did Obama have to attack the men to their faces? “Reagan had the decency to insult his enemies when he was out of town,” grumbled one GOP aide.

For Ryan, the misadventure began Sunday morning, when he was bumped from the lead spot on “Meet the Press” by David Plouffe, the senior White House political adviser, who suddenly appeared on the show to discuss the president’s new deficit-reduction plan.

In retrospect, Ryan said, Plouffe’s presence should have been a red flag.

“I’m, like, well, if it’s a deficit plan, and they’re serious about it, why isn’t [White House budget director] Jack Lew or [Treasury Secretary] Tim Geithner rolling it out?”

Still, when Ryan, Camp and Hensarling were invited to attend the speech because they had served on Obama’s fiscal commission, Ryan concluded that Obama was extending an “olive branch” in the budget wars and that it would be good form to attend.

Afterward, Ryan was furious. The speech “was extremely political, very partisan,” he fumed to TV host Charlie Rose.

Camp said he received a call from fiscal commission co-chairman Alan Simpson, who was also in the audience and was “concerned about the partisan nature of the event and how unnecessary and unproductive and unhelpful it would be.”

By Thursday afternoon, Camp, who works regularly with Geithner and other senior administration officials, was still pondering whether to call someone at the White House.

“But then I thought, maybe if I can’t figure out who to call, they need to call me,” he said. “It’s their agenda they need to get through the House.”

Obama's partisan, confrontational speech could make it more difficult for Coburn & Chambliss to negotiate a compromise.

From the Washington Post:

Republicans are feuding over whether to abandon the party’s long-held opposition to higher taxes in pursuit of a deficit-cutting deal with Democrats.

The rift in the Republican ranks has surfaced in a bitter back-and-forth between two heroes of the conservative movement: Sen. Tom Coburn of Oklahoma, who has been working with a bipartisan group of senators on a compromise to reduce government borrowing, and Grover Norquist, author of the no-tax-increase pledge that has become a rite of passage for GOP candidates.

At stake is a pillar of Republican orthodoxy that has for decades united every wing of the party in a quest to shrink government’s reach.

As the battle over the federal deficit escalates in Washington, the two men are sparring over Coburn’s seemingly narrow proposal to eliminate a $5 billion annual tax break awarded to companies that blend ethanol into gasoline. But both sides say this cuts to the core of a quandary for the GOP: Will the cause of trimming deficits run aground on the conservative principle that the government must not increase the amount of money it takes in through taxes?

Coburn has been the most visible Republican to challenge Norquist, perhaps the country’s most influential anti-tax advocate, but other Republicans have been willing to discuss a budget deal that would include raising more money through taxes, along with making deep spending cuts, to help reduce the deficit.

These include stalwart conservatives such as Sens. Saxby Cham­bliss (R-Ga.) and Mike Crapo (R-Idaho). And on the ethanol issue, Coburn has drawn support from such conservative-movement fixtures as the Heritage Foundation and the Wall Street Journal editorial board.

And even some House leaders, including Budget Chairman Paul Ryan (R-Wis.) and Ways and Means Chairman Dave Camp (R-Mich.), have left the door open to negotiation.

For anti-tax purists, including many in the Republican Party, eliminating the ethanol break is unacceptable — measures that roll back corporate subsidies, individual deductions or loopholes of any sort without comparable tax cuts elsewhere are considered tax increases.

The tensions between Nor­quist’s Americans for Tax Reform and Coburn’s office have intensified, with each side sending the other terse, accusatory letters claiming to be the true conservatives. Coburn charges that the tax pledge, as interpreted by Norquist, is inflexible, and Coburn’s spokesman now labels Norquist the “chief cleric of sharia tax law.”

“If we don’t do something, what we’ve done is put the country at risk,” Coburn said in an interview. “I agree we ought to cut spending, but will we ever get the spending cut to the level that we need to without some type of compromise?”

Norquist, who introduced the Taxpayer Protection Pledge 25 years ago, charges that Coburn and other Republicans exploring bipartisan compromises are violating party doctrine — and flirting with political suicide. He argues that bipartisan deals struck by Presidents Ronald Reagan in 1982 and George H.W. Bush in 1990, both of which entailed increased taxes, resulted in bigger government rather than spending cuts that both men thought they had secured.

“This is a fantasy on the part of the liberal Democrats that the Republicans would be stupid enough to repeat 1990 and throw away a winning hand politically,” Norquist said. “Why would you elect a Republican Senate if they just sat down with Obama and raised everyone’s taxes?”

The pledge

Breaking with Norquist would be risky for any Republican. He is a center of gravity in conservative politics, convening weekly strategy meetings with activists and GOP officials. His group says 41 senators, including Coburn, and 237 House members have signed the pledge, in which candidates vow to oppose “all efforts to increase the marginal income tax rate for individuals and business” as well as “any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.”

The political sensitivities for
Republicans were underscored Wednes­day when President Obama delivered a partisan speech demanding higher taxes for the rich. The confrontational remarks could make it more difficult for Republicans such as Coburn to negotiate a compromise with Democrats involving changes in the tax code.

How the debate among Republicans is resolved in the coming weeks will play a large role in determining whether a grand bipartisan bargain on deficit reduction is possible. “There’s a significant split over whether to put taxes on the table,” said Dan Mitchell, an economist at the libertarian Cato Institute and a Norquist ally.

Mitchell said the disagreement largely pits House and Senate Republicans against each other and gives Democrats a potential political edge. “Obama has it within his power to drive a big wedge between House and Senate GOP-ers and turn the tax issue from something that works on behalf of Republicans into something that works against them,” he said.

The GOP’s challenge

The challenge confronting Republicans who could be open to higher taxes was evident this week in remarks by Chambliss, who with Coburn is part of the Senate’s bipartisan “Gang of Six” working on a deficit-reduction plan.

“You can’t solve this debt problem with just reductions in discretionary spending,” the senator from Georgia told CNN. “You can’t solve it just by attacking and reforming entitlements. You’ve got to look at the revenue side also.”

Chambliss said the group was looking at reductions in overall rates for people and businesses coupled with the elimination of “tax expenditures,” a term that refers to breaks and loopholes.

“If we don’t want to pay the debt back, then we could just not worry about the revenues, but the fact is we’ve got a $14 trillion debt staring us in the face and revenue has to be on the table if we’re serious about attacking that debt,” Chambliss told the network.

Still, after Obama’s speech, Cham­bliss said he was “disappointed to hear the president advocate for tax increases.” Chambliss added that he would “continue to advocate for tax reform that lowers individual and corporate rates.”

Meanwhile, Camp, the House Ways and Means chairman, is now at work on tax overhaul legislation that would eliminate deductions and lower rates. Though Camp has said his plan would not be designed to raise more money through taxes, he has left the door open to compromise.

Ryan said in an interview that he advocates a “pro-growth” tax overhaul that would not be designed to draw in more tax receipts. But if a more efficient tax code spurs economic growth, he said, “then you do get more revenues. Higher GDP means more revenue.”

Such a policy would not violate the Norquist pledge. But asked whether there’s any room for negotiation over the Democratic goal of collecting more money through higher taxes, Ryan said, “I don’t know the answer to that.”

David Brooks pens another keeper: Ultimate Spoiler Alert

David Brooks writes in the New York Times:

President Obama and Paul Ryan are two of the smartest, most admirable and most genial men in Washington. It is sad, although not strange, that in today’s Washington they have never had a serious private conversation. The president has never invited Ryan over even for lunch.

As a result, both men are misinformed about the other, and both have developed a cold contempt for the other’s position. Obama believes Ryan wants to take America back to what he sees as the savage capitalism of the 1920s (or even the 1760s). Ryan believes Obama wants to turn America into a declining European welfare state.

If they met, would they resolve their differences? No, but they would understand them better. Paul Ryan believes five things Barack Obama does not. First, he believes that aging populations, expensive new health care technologies and the extravagant political promises have made the current welfare state model unsustainable. Fundamental reform is necessary or the whole thing will collapse, here and in Europe.

Second, he believes that seniors and the middle class cannot be excused from the benefit cuts that will have to be imposed to rebalance these systems. Third, he believes that health care costs will not be brought under control until consumers take responsibility for their decisions and providers have market-based incentives to reduce prices.

Fourth, he believes that tax increases should not be part of these reforms because the economic costs outweigh the gains. Fifth, he does not believe government can nurture growth and reduce wage stagnation with targeted investments.

Obama, meanwhile, does not believe the current welfare arrangements are structurally unsustainable. They have to be adjusted, but not fundamentally altered. He does not believe the seniors and members of the middle class have to suffer significantly in the course of these adjustments. The approach he outlined Wednesday mostly shields these groups from cuts, even if Congress can’t reach a deal on deficit-cutting and a fiscal trigger kicks in.

Obama does not believe in relying on market mechanisms to reduce health care costs. Instead, he would rely mostly on a board of technical experts, who would be given power to force their recommendations upon Congress.

Obama believes that tax increases on the rich have to be part of a fiscal package. His approach claims to contain $3 in cuts for every $1 in taxes, but if you count these things the way a normal person would, it’s closer to 1 to 1. Finally, Obama believes that government investments in research and infrastructure nurture broad-based prosperity.

Personally, I agree with Ryan on items 1-3 and with Obama on items 4 and 5, and I think an acceptable package could be put together to reconcile these views. But I do not believe there is any chance this will happen in the current climate. What’s going to happen is this: We’re going to raise the debt ceiling in a way that fudges the issues. Then we’re going to have an election featuring these rival viewpoints, and Obama will win easily.

It doesn’t take a genius to see that Obama is very likely to be re-elected. Every few years, Republicans try to reform the welfare delivery systems to make them more marketlike. Every few years, voters, even Republican voters, reject this. The situation today is slightly less hostile to these ideas, but not much.

The president, meanwhile, hit the political sweet spot with his speech this week. He made a sincere call to reduce debt, which will please independents, but he did not specify any tough choices. He called for defense cuts and asked the Pentagon to find some. He called for a reduction in tax credits but didn’t point to any that should actually go. He called for reductions in Medicare costs and asked his board of technocrats to come up with some.

These are exactly the sort of vague but well-intentioned policies that have sold well in election after election. The president is not being cynical about this. He genuinely does believe that seniors and the middle class can be spared from any shared sacrifice. He really does believe in calling together teams of experts to devise proper solutions. Obama’s sincere preferences happen to be more popular.

Hopes of any Gang of 6-style bipartisan compromise are being washed away by the partisan fury. After the next election, though, interest costs on the national debt are likely to rise ruinously, global markets might lose confidence in America’s debt, with catastrophic consequences.

The coming age of permanent austerity will be terrible for those conventional Democrats and Republicans who propose policies that could pass only if the other party ceased to exist. But it will be a moment of opportunity for us Hamiltonians, who believe, with Ryan, in market mechanisms to allocate resources and control costs and also, with Obama, in government’s ability to selectively nurture prosperity.