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Obama Negotiates - Not
At his press conference yesterday, the President said (again) that Step Number 1 in the cliff negotiating process is to have Congress pass the middle class tax extension (<$250k). Obama said that after the middle class cut was signed into law, he would negotiate with Congress on all of the other issues that are on the agenda for the end of the year. I, for one, don't believe a word of that offer. If Congress were to agree on those middle class cuts, Democrats would no longer negotiate on the remaining issues, they would dictate the outcome.
The President’s words:
I won't pretend that figuring out everything else will be easy
"Easy"? I would say "impossible" is a better description. If the middle class tax cuts are signed into law, the Democrats will not give an inch on the rest of the critically important issues. Who's kidding who?
In the end, there will (probably) be some agreement that will result in taxes on wealthy American’s going up, while middle class taxes rates are held at the Bush era levels. But the idea that Republicans, and the 48% of the people who did not vote for Obama, should grant the middle class some tax bennies prior to getting an understanding on all of the other items that are on the fiscal cliff, is just silly to me.
The other day, Democratic Senator Patty Murray (WA) spoke about allowing the country to fall off the cliff. Murray (and presumably Obama) believe that Republicans would crumble when the consequences of the "cliff" crush the Republican political base. Her words:
“If the Republicans will not agree with that (preconditions for negotiations), we will reach a point at the end of this year where all the tax cuts expire and we’ll start over next year”
Senator Murray wants to play hardball. So does the President. Both are insisting that Republicans bend over and agree to "fix" one aspect of the fiscal cliff prior to the end of the year, and then push off addressing all the remaining issues to sometime in 2013, maybe, possibly, no promises though. The thinking by Obama and Murray (and many other Democrats/liberal pundits) is that they have all of the bargaining chips on their side of the table.
I think that Murray and Obama have it backward. If the US does fall off the cliff, then it will be the Democratic base that will have its ass handed to it.
-The under $250k Bush tax cut would go away. This would be a middle class disaster. It would cost the 97% a whopping $223 billion in take-home pay in 2013.
-The AMT would hit people with incomes of > $50K. The IRS puts the number of new taxpayers who will get hit with the AMT at 30m. 97% of those poor folks are in the middle class today.
-Payroll taxes go up on 1/1/13. That will cost the average family $1,700; this is a very “regressive” tax increase. The cost to middle class workers will be another $112 billion in lost take-home pay.
-Unemployment insurance benefits would be cut.
I think the President has made a very dangerous move in the game of chess that is called the fiscal cliff. I don’t think Republicans will agree to give Obama the one thing he has insisted on without getting an agreement on all (or most) of the other issues. The “Reds” would be stupid if they did that.
I don’t know where Obama learned his negotiating skills, but he needs a tutor. I think the odds are very high that House Republican’s say “No”, and do not give Obama what he wants. If Boehner (or some other big shot Republican) says “no” at (or after) this Friday's meeting, the odds of falling off the cliff will shoot through the roof. Markets will respond accordingly.
The market reacted appropriately to the President's press conference yesterday. It fell like a stone after he reiterated his demand that Congress fix one thing today, and leave everything else blowing in the wind. The US stock market has lost more than $1Trillion since the election. A significant portion of that loss is attributable to the President's insistence that his horse goes before the cart.
Maybe the election results give Obama the right to negotiate using the tactic, "My way or the highway". But I don't think Obama really has the stick he needs to beat Republicans into submission. At some point he will be forced to recognize that his bare knuckle fighting style is going to get his Administration bloodied, and bring his base of supporters a world of hurt.
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Why is extending tax cuts for the middle class (<250,000) only a Democratic thing. The vast majority of the people who voted Republican are middle class (<250,000). If the Republicans are only going to look after the interests of the one percent then they will be looking at further defeats at the voting booth. They will be the richest political party the world has ever known with no voters. HA!
The fiscal cliff is a mirage. We are already off the fiscal cliff headed for the rocks. Even if you believe Obama, the "tax the Obamiilionaires (Those earning over $250K)" will only bring in $100 billion dollars a years - we're overspending by that much each month! It ignores the unintended consequences - the assumed $100 billion will be diverted to other junkets; The economy will slow - less tax revenue; there will be more layoffs, unemployment checks, SNAP food stamps. Oh, and the Obamillionaires will be spending $100 billion less. The question is do the house GOP have the huevos not to cave.
Obama is still in search of other stealth taxes. Despite the fact that there has been no change in global temperature over the last 16 years, despite increases in atmospheric CO2 each year, Obama announces that he believes that hurricane Sandy was probably due to global warming caused by man made (Mann-made?) CO2 emissions. Sounds like a good excuse for a cap and trade tax scam.
Give him his carbon tax... watch it flow thru to consumers and have him explain his way out of not raising taxes on the middle class because that is exactly what a carbon tax is.
Good luck explaining that to those impacted.
The game can appear to be very confusing if you do not understand it, or where all the pieces are on the board.
And especially when confirmation bias and wishful thinking impairs one's judgement.
Obama is playing chess, not checkers. Whether you agree with his moves is another matter.
But to say that he 'needs a tutor' in negotiations is a bit off, like Dick Morris' and Karl Rove's elections forecasting.
And Boehner is playing along in his own way, because of his own unruly crew, and the political mind at work.
I do not expect a good outcome, but let's not lose sight of what is really happening.
Still it is interesting to watch the 2% squirm over the fear of losing their seignorage.
it is a repeat of 2010-2012 .. it is a setup by the dems to label the repubs obstructionists for the next two years... just like the last two... all in an effort to get control of the house in 2014 ... and since the republicans cant seemed to frame a very simple argument the right way EVER lately it will end up a lot like 2012 elections i would imagine ... they would be better off giving the imbecile everything he wants and watch what poorly constructed socialist economic policies do to a country already on the brink of recession... at least that way they stop giving a continous antagonist to obama and his abundance of excuses that he utilizes very well while standing on his soapbox... unfortunately, the republican party doesn't seem to understand that they are being painted very effectively into the same corner they were previously... regardless of the facts
Just a historical tidbit, the tango was originally danced with knives.
It almost looks like they are trying to tank the markets. The election is over and a good crisis is a terrible thing to waste. Obama doesn't care about his base now because it's two years until the next election.
"-The under $250k Bush tax cut would go away. This would be a middle class disaster. It would cost the 97% a whopping $223 billion in take-home pay in 2013."
If this would be a middle class disaster, what are continued trillion dollar deficits going to be, to the middle class?
"Bruce - your assumption that Obama even considers negotiation is a false premise."
If that were true, there would be a public option in Obamcare.
Not true.
Now theres no re canonization to worry about, only the Russians will get
flexibility.
Now we get to see the real Obummer, and its not a work of art.
Elect a doctrinaire Marxist , and guess what you get.
Clearing out the top brass in the military is the first move in the
revolutionary handbook.
Welcome to the USSA ,and enjoy the new dark ages.
"Clearing out the top brass in the military..."
Sure looks like it.
http://www.thenewamerican.com/usnews/foreign-policy/item/13651-obama-vs-...
Isn't this fiscal cliff exactly what the Dems negoiated for last time? Weren't the expiration of the Bush tax cuts (remember that we were told again and againg that these were "for the rich") demanded by the dems in order to get them in enacted in the first place? Boehner should say "Nah, I'm not going to negotiate anything".
I think Boner would be better advised to get down on his knees and give the O man a blank check, whatever you want Mr. Pres we will support. Then Boner can sit back and watch it all implode, If he tries to push back and it goes over the cliff or even comes close, Boner and his pals will be wearing it all the way to the mid-terms.
Bruce - your assumption that Obama even considers negotiation is a false premise. Next question please.
this is all so 1970's.
the answer is obvious..give every worker a 20% pay rise.
problem solved.
inflation goes to .....20%...making treauries worthless, tax revenues go up with a double whammy of increase rates and increased salaries.
hey look ... you can vote up yourself...let me go and set up an HFT algo to crank this...(bored, bored, bored!)
That's assuming that the people would spend their new-found 20% salary increase on "stuff." I don't think that would happen. Given the current economic environment, most would be spent to pay down bills and a lot of the rest would be saved.
Once we're out of the woods, then all that bottle-neck in inflation would explode higher and we'd be right back in the same boat we're in now.
i think companies would raise prices to compensate for wage inflation..hence the comment "so 1970's".
this is the only option i can see that hasn't been tried by the powers that fuck up (ptfu) - i just made that up!
Well, the PTFU is an interesting acronym. :D
If that is the case in your scenario, then we haven't really done anything at all. The thing is there would be a significant time-lag between when people got their new money, paid down debt, saved a comfortable amount and started to spend.
In other words, companies wouldn't be seeing price inflation right away, even though wage inflation would hit the markets right out of the box. I understand your hypothetical but the time-lag would force employers to borrow money to pay for the wage increase, which would add to their cash outlays and cause further displacement in the wage/price balance.
A more fair way to give everyone a wage increase is to cut taxes gradually across the board for everyone. Then the government would go into more debt and would be forced to actually "print" money (not like the swapping junk for UST QE programs we have now...). That would solve their problem of being in a deflationary environment much more quickly, fairly and equitably.
:D
it was a hypothetical, though the ryhming chorus with the 70's is becoming all too apparent, it reminds be of the build up to very high inflation in the early to mid 70's before volcker jacked the fed funds rate up to 20% in 1979/1980, just 32 short (in economic terms) years ago.
...what i think would be a way to bail out this government over the fiscal cliff would be the confiscation of the "trillions" on the sidelines on corporate balance sheets (accumulated by tax evasion in offshore domiciles whilst culling american manufacturing jobs (thank you "blow it out of my pants" linton and Gore the Bore).
This whole thing makes no sense. We're gonna take money away from the spenders (people), give it to the parasites (government), so they can make sure the predators (corporations) don't have to pax tax on their offshore trillions? But then the spenders won't spend, so the predators won't make any money or hire any of them, and the parasites won't get any tax revenues...so they'll want to tax even more.
I mean you do not have to be a genius to see how this plays out.
Well, there is no doubt that there are trillions lying around everywhere and if we really wanted to (give it back to whom it belongs- the American people...), we could pay all this off in about fifteen minutes.
But that is neither here nor there, unfortunatley, so we're stuck with having to make do with what we have and I still say that if the government really wanted to get out of the deflationary spiral and inflame inflation, all they would have to do is cut taxes on everyone and pick up the tab themselves. There would be spending like you wouldn't believe. There is no way they don't know that...
Which means, of course, that this is not what it's about...
"Well, there is no doubt that there are trillions lying around everywhere and if we really wanted to (give it back to whom it belongs- the American people...), we could pay all this off in about fifteen minutes."
I find this premise questionable, the thought is there is a total of about $87 trillion in assets (per http://www.usdebtclock.org/), and I think their number is solid based on official reporting, but what does that asset base consist of? Largely, debt. And debt only has value in the belief that it will be repaid with interest to maturity. The US has a gross debt to GDP ratio of 105%. In other words, the US is functionally bankrupt. The Federal Reserve Note (aka, the "US Dollar"), and all "assets" denominated in FRNs, are therefore functionally bankrupt. To the extent that an "asset" has value independent of their FRN price (such as liquor, a hamburger, gold, muffins), it should still be considered as an object of value, but "assets" that have no value independent of their FRN price should realistically be deeply discounted from it's current, mostly bullshit valuation. Common stock and US treasury bonds and notes immediately come to mind.
I'm talking about money in the shadows. The stuff that lurks around the basements of the banks in Bruce's home town.
then it will be the Democratic base that will have its ass handed to it
I've watched this show before, it will be a parade of 'victims' of Republican austerity on the various news channels.
End result is collapse; No need to negotiate when it doesn't matter.
I don’t know where Obama learned his negotiating skills, but he needs a tutor.
I believe he was tutored by one of the best, his name was Dr. S Alinsky - and like it or not Obama against all the odds not only got Obamacare through but won a mandate for 4 more years. The rules haz changed Bruce, America is now Barrio 18 www.youtube.com/watch?v=55ioGiFumBM
"#4. Make the enemy live up to its own book of rules."
That while they break their own and everybody else's. And then they call you a hypocrite while they are "revolutionaries".
Now try to explain that to a republican/conservative. "No, let's be polite, we are superior." Retards... will never win anything again.
Eh, the secessionists have the right idea.
Farmland, Phys, Lead and Brass!
And secession,
Bitchez.......
IMO Bruce gets way too caught up in the D.C. drama. How is this any different from Jersey Shore or any of the crap on MTV?
" At some point he will be forced to recognize that his bare knuckle fighting style is going to get his Administration bloodied, and bring his base of supporters a world of hurt."
As oppsed to decades waiting for triclw down which was supposed to help. Hang on, it's coming any day now.
Yep. We're still waiting trickle down.
http://www.zerohedge.com/news/2012-11-15/did-politicians-kill-buy-and-ho...
>>>It was acknowledged at the time that many of the reforms introduced after 1980 would initially provide disproportionate benefit to high incomes – but, in theory, benefits would trickle down. Exhibit 2 shows real income in the US, by income quintiles (20% buckets). The bottom three quintiles – the bottom 60% – have seen almost no income growth since 1980. (To be precise, real annual income growth in the bottom three quintiles has averaged 0.1%, 0.2% and 0.3%, respectively, since 1980.) Whatever trickled down, it wasn’t income.<<<
Instead the Reagan Revolution Reforms gave us the S&L Crisis and a less stable (and now criminal) financial sector and regulatory capture.
Everytime the so-called "job" creators get handed significant tax cuts and regulatory breaks on the front-end, the rest of America gets screwed on the ass on the back-end.
>>>But the idea that Republicans, and the 48% of the people who did not vote for Obama, should grant the middle class some tax bennies prior to getting an understanding on all of the other items that are on the fiscal cliff, is just silly to me.<<<
Of course it just seems silly to you, Bruce. The truly wealthy always get their way.
This time, I want to see it go over the cliff.
And who is to say where the blame will fall.
I think it will be a replay of Gingrich/Clinton.
Hey, flat!
Surely you remember that in private 'trickle down' was joked about as really being 'trickle up' and anit-gravity.
Everyone with money loved the 'trickle up' ,while all the 'wanna-bees' wanted the lower taxes.
Each got what they wanted and now EVERYONE gets to trickle down the dollars to pay for this long vacation. Meanwhile, we took the 'peace dividend' and leveraged ourselves into being the most hated population on the planet.
Isn't this what the hockey fans call a 'hat trick' we are a pretty bright people, right?
om
Hey oldman,
You have some memory of what a lousy fucking bargain this was.
It was by and large a giveaway to the truly wealthy. The middle class got some tax brake crumbs at best.
It wasn't just the tax code (TRA '86), but a "package" which also included deregulation of the financial industry (leading to the S&L Crisis) and the further "criminalization" of the rest of the financial industry.
The Reagan Revolution was the kick-off and set-up for disaster. The bill has come due.
This will be the same shit again. I don't want to see another bargain cut.
Let's grab each other by the collar and go over the cliff.
Flat,
For me we went over the cliff a couple of years ago----I'm floundering around in the rapids but I don't see you, so how about this?:
First one to shore from river waits 'til the other floats by and grabs him by the collar
The eighties were the revolution years---everything was liberated and then carried off
True freedom, true liberation, one big drunken, greed-crazed festival until it was over
I tried to escape that mentality and way of being by coming to a banana republic in SA, but now I'm being swamped once again by THE VERY SAME CROWD I fled from twenty years ago.
Next stop, I suppose can only be Europe---this crowd is too cheap to live there.
Good to have company, Flat---look for me and I'll look for you om
Bruce Krasting publishes the key American slogan up above ... 'My Way, or the Highway!' ... Ha! I heard people in the US, saying their bosses on the job told them exactly that.
---
Just like China, but much more deviously, the USA is run by a Standing Committe of the Politburo
In China it is up front ... in the US it is hidden.
In the US it is members of the ruling wealthy families, who form the interlocking boards of directors of the major US banks and corporations ... but we never quite know which inner cabal of Rockefellers plus whoever, are deciding things at the moment.
So why are America's oligarchs sponsoring this fake gladiator fight between Dems and Repubs? ... Why the fake fight among their Obama-bot, their Boehner-bot and the rest?
These jokers vote nearly unanimously on total shite, like support for Israel, when ordered to do so ...
So why the Cliff Games?
Maybe the best way to pave the highway for Bernanke and the Banksters
Maybe the best way to excuse themselves for doing Zero for real American people
Maybe the best way to crash the whole friggin' system and bring on the next phase
Old expression. I once had a wife who said it to me.
Anyone know the origin?
bk
Olde English...."I have learned no waye but the King's highe waye . . ."
Tks!
bk
I heard one, fitting in the case of Obama vs the US citizens, about "Taking one up the Hershey Highway"!
I think it is popular just because it rhymes.
Another good one is "Don't let the door hit ya where the good Lord split ya!"- origin, my Dad.
:)
Hey, I tell ya, it's a tough crowd.
expect a tough guy to be soft there where a soft guy would be tough. My mother taught me that. As she was a pretty lady she got chased a lot, so she knew her men inside out.
I guess what she meant was appearences are often deceptive. Acts tell you what the person is, tough at heart or not.
Not sure if she looked at a man's butt before she looked at his heart, but then women hide their true intentions. We are more easy to read i guess... unless we play it soft outside.
I guess that goes for being a good negotiator as well. Watch out for the softy he usually has resilience!
don't forget corruption is not set in stone, it needs constant er, corruption
in order to keep the parasites in Washington 'in-line' The Parasite Club has to continually cajole, coral and corrupt these windbags or paint them into a corner
we wrongly imagine DC is corrupt day in day out. Not true. The corrupt need constant corrupting or they break ranks. Corruption is not a given, it is a continual process that needs continual 'management'
"Corruption is not a given, it is a continual process that needs continual 'management'..."
Yes. Standard "stock" vs. "flow" argument, but applied to graft. Once the flow stops, the subjects are free to find another benefactor.
And they will.
Hard to find an "honest" politician. An 'honest' politician is one who once he/she is bought stays bought.
the President's legally trained, like most 'lawmakers' in Washington
the point is to fake a battle with the other firm so you both wrack up maximum fees, about as much to do with justice as an on-the-spot fine for over-parking 3 minutes
the Lawmakers are making a complete fuck-up and farce, hard evidence lawyers like accountants are a sham industry of no value to anyone but themselves
Govt the "great wise peacemaker"... just watch the 3rd and 4th rounds of the parasitical cage-fight in DC
Obama never practiced law, he only studied it.
Aerojet, actually Obama did practice law for a while. Defended a Chicago slum lord once very sucessfully