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Posts Tagged ‘Arliss’

Over the past couple of weeks the debate around platinum coin seigniorage (PCS) has been raging and that is good. In fact, it is great. Like carrot subsidies, PCS is something we should have been talking about years ago. As a rabbit American, I support both but like LetsGetItDone (LGID) who has been writing incredibly knowledgable and quite brillent posts on PCS at both The Daily Kos and the New Economic Perspectives sites, I am hoping it will be possible to leverage the current discussion into a much larger one about crating policy space.

The Power of Paper

It’s like that tired adage, give a rabbit a carrot and he eats for a day, teach a rabbit to order carrots on-line and he eats for a lifetime – or something like that. Sure, we could solve the current debt ceiling problem by minting a $1T coin but we could also chose to do more.  We could resolve the entire US debt and return our economy to full employment by minting a $60T coin.

Oh, put a sock in it each and every one of you who is sputtering something about insanity. First of all, there are some outstanding detailed explanations as to why this really will work but it all comes down to one simple thing – a fiat currency really IS a figment of our collective imagination. It IS just little pieces of paper or metal upon which we have collectively agreed to confer value and in which value is retained, in the case of the United States, by the policies of the Department of the Treasury, the Internal Revenue Service and the Federal Reserve. Beyond that, money is just paper. (Though, I have to say that in comparison to other paper, when one just happens to nibble on money, humans have a way of turning an extra special shade of white.)

Given that we know that fiat currency works, one of the things that is the most interesting about this entire debate is that no one in Congress

…or the White House

…or the Treasury

…or the Fed

has figured this whole thing out before. Part of this is because, as I have said, almost all of the people currently staffing those positions learned monetary policy at a time when the thinking was all still founded on the gold standard despite the fact that the monetary system no longer has these limits. Nixon took the country out of Bretton Woods in order to allow for growth but only a very few people managed to realize that national policy makers also needed to alter the way they thought about actual money. They needed to smash their old thinking so that the truth of the reality could become clear.

Yeah, like that happens.

I was just reading today about some complete idiot (and by “idiot” I mean conservative Republican) who is claiming that teachers teaching the distributive principle in algebra are pushing a liberal agenda. Back up the truck full of stupid. I get that once humans have their minds set on something it is hard for them to see anything else or in any other way but that won’t work for the US economy unless, of course, your objective is aligned with the GOP and your intention is to destroy the economy on “principle.” Let’s assume that since you are reading this, you are not satisfied with crashing and burning the economy and that you are willing to learn something new. Ok, now take what you think you know about debt and inflation outside and smash it against the rocks of “that’s SO ’70’s.” I can wait. (Don’t forget your jacket. It’s a bit nippy outside.)

If you still think the old “rules” of debt and inflation apply, it’s about to get a little nippy in here. Bunny teeth are sharp. I’m just sayin’.

Policy Space

For those of you who are beginning to understand the incredible power of a strong fiat currency we can now move on to what I really wanted to talk about, policy space. In speaking about policy space I am talking not about the legality of PCS and I am not talking about PCS in relationship to the debt ceiling. I am talking about why we, as progressives, should be supporting PCS for all we are worth. Progressives should be loudly supporting PCS with one voice because it would allow us, as a nation, to get past all the truly meaningless battles being fought in Washington, over shadows that live only in the backs of paranoid minds, and on to policy that could genuinely and positively effect the real world.

Let’s imagine, for instance, that we are talking about minting $60T worth of PCS coins. It could be any number but $60T is one being actively talked about so I’ll go with that for the sake of this example. (And remember, I’m not going to get into why there is no realistic way this would cause inflation or any of the other topics that have been covered by myself and LGIT as noted above.) Now, the funds made available by PCS are not pushed out immediately into the economy, as so many imagine (that really would cause inflation), rather, they are sitting in a Treasury account at the Fed. In other words, for all you MMT folk, they are a $60T entry on a spreadsheet. The first thing that happens, of course, is that all debt that falls due is paid as it is due, in full, instead of being rolled over. No more interest is paid and no new debt is created. Take that, austerians, as Paul Krugman calls those dedicated to austerity. Our debt is being retired. Done. Fin. At the same time, Congress is still in session and is suddenly in a position to authorize spending without having to deal with the canard of not having enough money. (Which, as MMTers know is NEVER the case for the US government but that is not for this blog post.) The issue would be that if we were able to mint the big coin the optics and political will around everything else changes.

As Paul Krugman cites in his 2012 book, End This Depression Now!,

And early this year, with the debate having shifted perceptibly toward a renewed focus on jobs, Republicans were on the defensive. As a result, the Obama administration was able to get a significant fraction of what it wanted…without making any major concessions.

So the first thing Congress now has is a free hand, policy space, to deal with unemployment. In point of fact, the take-over of the national zeitgeist by drummed-up concerns over debt and deficit (see a brief discussion on why FAUX News and company are so dedicated to this mantra near the end of this post) has been allowed to relegate unemployment to the backseat. Putting unemployment in the backseat in order to talk about imaginary problems denies the absolute fact that unemployment is still driving the car. So, if you are wondering why the US economy is still swerving all over the damn road, that’s the reason right there. Platinum coin seigniorage would put unemployment right back in the front seat and, in a matter of a very short time, could put everyone who wants a full-time job back to work. (The resting rate for unemployment is said to be around 3.5% so don’t ever think we are looking for Gadot/zero.)

That should be reason enough for progressives to be the biggest cheerleaders of PCS – but wait, there’s more.

Strict and seriously enforced environmental regulation could be enacted and, instead of using indirect reward like tax breaks which tie up liquidity for tiny and giant corporations alike, the government could provide upgrade grants. Jobs are created and, I love this part, everyone benefits except the bankers. Also, this would move corporations from opposing such regulation to supporting it. Imagine, all you environmentalists out there, being on the same side of an argument as American Electric Power. We still would have problems with them (“Clean Coal” anyone?), I know that, but we could move with them further down a road which would benefit all of us collectively. For small corporations, it would make it possible for them to come in to compliance with regulations which they are commonly exempt from because, if included, they would not have been able to comply.

It would allow this nation to address long-standing infrastructure crisis’ including the electrical grid, water treatment and transportation. Even major improvements to existing systems, like rail, would benefit the economy and each one of us enormously.

We could not only invest in disaster preparedness, we would have the ability to set aside funds to deal with the coming, rapidly increasing, rate of disasters including things like the fires in the West, draught in the Midwest and that’s before I even get to superstorms and hurricanes. Of course, I am already assuming that should funds be perceived as being available, the needs of the states and victims hit by Sandy would be addressed.

And on and on and on – in a manner metered by Congress and the Fed up to the point where industrial utilization is near peak levels and unemployment is down near 3.5%.

Perceived Funds

The reality is that the coin is not a necessity. All that it does is give physicality to an accounting transaction. Large PCS would make it plain to all that the US government will not and cannot run out of money. There are constraints on our economy (inflation and the exchange rate) but “having enough money” is not one of them. The ability to spend whatever we need to bring the economy into balance has been available to the government since 1971, since the day the US dollar became a fiat currency, we just haven’t realized it and haven’t used it.

What progressives need to know is that the things we want, the things we have been calling out for from the wilderness, become possible with Large PCS. Also, if by some minute chance we were able to get this President to order large PCS then we could all wipe trickle-down economics off the bottoms of our kicks on the nearest patch of grass. If for that and no other reason, we should all be getting behind this right now.

So, Why Do We Think Debt is a Big Deal?

Debt, given the current state of our economy, means nothing, so why do we, the progressives, the reality-based group, the group that actually thinks math is a real thing, believe it when we hear it? Well, folks, you have been duped and, no surprise here, you have been duped by FAUX News and company. I know, you don’t listen to FOX but you do listen to people who listen to them and all those people drank the Kool-aid. Rabbits are big on water. We oppose Kool-aid on principle. (This would probably not be the case if the orange flavor was carrot instead of orange.) Rabbits, like all prey animals, are adamantly focused on the real world so we were not taken in.

Still, one has to ask, why this meme is so important to conservatives?

Simple. Greed. Surprised? Of course not. In the dictionary under “conservative” the definition says “greedy bastards.” We all know that. So, how does their greed tie in here, you ask? Well, to start with, Pete Peterson knows. If we cut social security for reasons of austerity, where do those people go? They go right to Wall Street. If we cut Medicare, where do those people turn? They turn to the insurance industry. If anyone other than the government is funding projects where is that money coming from? Why, it is coming from the banking industry, of course. So, here is the equation:

Wall Street + Insurance Companies + Banks = Non-stop Debt Crisis Meme

That’s it. That simple. This other equation,

Platinum Coin Seigniorage = Policy Space

has been here through this entire crisis and has had nary a whisper until #MintTheCoin took off just a couple of short weeks ago and we, as progressives, absolutely must get on board. If you ever, in your entire life, wanted to be a part of making a real change that could change everything for the better, this is it. Platinum coin seigniorage isn’t the golden ticket but it’s pretty damn close. Thump!

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Memes are a strange thing. One never can really predict what will catch on and what will die with a mingy wimper. Still, economist Stephanie Kelton has to be pretty thrilled that #MintTheCoin has gained traction. She, and the entire rest of the Modern Monetary Theory (MMT) community of economists, have certainly been waiting long enough. #MintTheCoin is Dr. Kelton’s (@deficitowl) current contribution to Twitter and it’s an important one but I’ll bet you don’t know why.

Hint: the answer isn’t “debt ceiling.”

The meme has caught fire and is being promoted by the likes of both Paul Krugman and Salon (…’nuff said) as a solution to the debt ceiling via the hastily lashed together vehicles of the 14th Amendment to the US Constitution and Title 31 of the United States Code Subtitle IV, Chapter 51, Subchapter II, Section 5112. I am not going to repeat the basics of the meme because they are splashed all over the web. If you have been dead for the last couple of weeks and somehow missed them you can catch up here, here, and here. There is also, of course, the idiotic GOP response codified, for the moment, in the bill being introduced by Congressman Greg Walden (R-OR) to prevent the President and Secretary of the Treasury from taking the option of the now infamous platinum coin. My favorite part of this legislation is that it tacitly acknowledges that the Secretary of the Treasury really does have the right to mint the coin making any argument to the contrary just that much more difficult. Derp. The part of this legislation that makes me want to put my face through glass is when the Congressman drops his pail down into the my-small-business-can’t-print-money-well to which I respond,

Listen up, Dimwit, the US Federal Government is NOT a business or family and it CAN and SHOULD print money.

Now, I’ll grant you that the world is a big place and some of you thought you had better things to do than to read my post on Modern Monetary Theory vs the Fiscal Cliff (this link is to the Daily Kos cross-post because the discussion thread was excellent there) but if you do not understand the statement above, stop now and read the older post. I’m not kidding. Stop. Now. Thump!

For everyone who did not stop I am going to go forward with the assumption that you fully understand the following things:

  • The budget of the Federal government is in no way, shape or form like that of your family or of any business and likening the Federal budget to the budget of a small business is the same as likening kittens to helicopters. (Ok, both look pretty funny when they are flying through the air but other than that….)
  • The Federal government is not balancing a budget, it is balancing an economy and the delimiters of that balance are unemployment, exchange rates and inflation. Period. End of story.
  • Deficits mean NOTHING. Debt means very, VERY little.
  • The US economy has nothing what-so-ever in common with any country which uses the Euro so comparisons to Spain or Greece or Italy are, again, kittens to helicopters.

Again, if there are any of the above which are unclear to you, go back to the older post. I mean it. *glare*

What has to be thrilling the MMT community to the tips of their pointy little heads is the fact that the platinum coin is breaking into consciousness at all because they have been talking about it for a long time for a whole different reason.

Zeroing Out the US Debt

News Flash: the platinum coin could be used to zero out the entire US debt held by the Fed. Done. Gone. I’m going to nibble on some hay while you think about that. … … … … … … Done? I didn’t think so but no one has ever credited me with patience.

There are, of course, two things to know about this approach and the most important is that it is totally unnecessary because given the current (stronger than you realize) position of the US economy and the fact that we have a fiat currency, debt actually means very, VERY little. It is, essentially, a matter of an internal balance sheet adjustment and if someone wants to make a pretty little coin or two or fifty to make it more real, well isn’t that just precious. What this would do instead is allow the funds which are being spent in service of our current debt to be pumped back into the private sector, in a controlled fashion, until we have reached full employment, at which point the spigot would be reduced to a normal flow.

What’s that? I can hear the anguished screams all the way from here. No, inflation is not a factor. Inflation is caused when demand exceeds supply and our economy is no where close to that margin. There is huge room for growth and capacity utilization rates remain exceedingly low. There, there. *pat, pat* I know. It’s a shock because those GOP bullies have been pushing the Debt-bad/Inflation-nigh meme for so long and you actually had started to believe it. If you need more solace on this issue, go to Bill Mitchell’s Billy Blog, for an excellent explanation.

Snipe Hunting

The real truth is that debt isn’t bad. At least, not at our current levels and in our current financial position. Still, we have listened to the GOP and the Tea-baggers rail on it for so long that it is as if we, as a nation, have been on a snipe hunt and we actually believe there are real snipes out there. Let me do you this favor and smack you upside the head, *SMACK!* Wake up!!!

There are not now and there never were actual snipes and because it does not serve our nation and economy for the private sector (all US individuals and businesses) to be in the red and because we will absolutely have a trade deficit for the foreseeable future (which is the international sector), the laws of accounting (if confused, refer to both my previous post on MMT and my previous *glare*) say that the public sector (the Federal budget) MUST be running a deficit . If we just can’t make ourselves comfortable with that than let’s pretend otherwise by zeroing out the debt with a magical coin. Here’s the bottom line. The debt means NOTHING and the coin means NOTHING and using them to cancel each other out so that we feel better is silly but not necessarily a bad thing. Plus, of course, it frees up all the money necessary to get everyone who wants to work back to work… oh, and to invest in the changes necessary to address climate change, invest in education, rebuild our national infrastructure, solve the long-term healthcare crisis…among a few other little things.

The IMF’s Giant Facepalm

…and then there’s the International Monetary Fund (IMF.) These genius’ have been at the head of the austerity bandwagon for years as they have dutifully strong-armed (and worse) economy after economy into the ground with their iron-clad commitment to austerity. …except they were wrong. Totally and completely, absolutely and irrevocably (in some cases) wrong. Now, it’s one thing for me to say this. What is one rabbit against the all-powerful genius of the IMF? So I had to laugh (and cry a little) when they finally acknowledged that they have been wrong all along. As it turns out, when an economy is struggling and it implements austerity, things get worse. Conversely, when countries, like Germany, Austria and the US (thank you, President Obama), use stimulus, they experience improvement. Why? Because (and here I apologize for repeating myself) a country is not balancing a budget, it is balancing an economy. WHO CARES what a ledger says! What matters is that people are working, the temperature of inflation is cold and the exchange rate is reasonable. Those are the only three things that matter. Everything else is just a snipe no matter what the Tea Party or the GOP or the IMF has to say.

In Closing

The Giant Platinum Coin IS an interesting concept. It IS worth thinking about but it is wasted on an imaginary “problem” like the debt ceiling. Oh, it’s not that it can’t or shouldn’t be used there. It’s just that if we really want to get the GOP to shut the thump up and we really want to change the future of our country and the lives of our citizens, we won’t just stop there. But that is, of course, just one rabbit’s opinion.

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I am writing an educational post today which will attempt to describe, in the simplest terms possible, Modern Monetary Theory (MMT) and its place in the current national conversation.  I fully accept that rational thought will play absolutely no part in whatever agreement is ultimately reached in Washington, DC so that is not really at issue. This post will be neither political nor funny. I also feel obligated to provide this disclaimer. I am a member of the one percent. As a rabbit American of means, I live an exceedingly comfortable lifestyle which is seen to by my large staff. I have significant investments, including substantial holdings in carrot, kale and blueberry futures. Honestly, I couldn’t care less about the fiscal cliff because my every whim will be met regardless. I sense however, that not all of you are in a similar position. I know my staff thinks they have cause for concern. In terms of what lawmakers may decide to do, my staff is right. In terms of economics, they really are wrong. Allow me to explain.

In making my most critical, essential and earth-shattering point, I will try to be as subtle as I can.

The Federal deficit is not big ENOUGH.

There. I said it. Go back and read it again just in case you missed the emphatic nature of this statement. Got it? Oh, I see, not really. I suspected as much. Allow me to explain and to provide links to more experts on this subject than you will ever have time to read but really, really should because it is fascinating stuff. It is also important that I note here that MMT is politically neutral. It is not a proposal for fiscal policy. MMT is a description of the current monetary structure as it has been ever since the US went off the gold standard. That it is not widely understood is an understatement.

I attended the University at All-Bunny (SBUNY) and when I took macroeconomics the words “modern monetary theory” never crossed the lips of any of my professors. Later, as a grad bunny, I attended some evening lectures during which MMT was introduced but the theory was young and had not fully coalesced. I say this not because I think you care about where I first heard about MMT but because there is a reason you probably don’t know anything about it either. Either you, like me, matriculated prior to the advent of MMT or your professors, like virtually all those in the country, were not exposed to MMT during their training so they did not pass it on to you. Either way, MMT is only beginning to enter the general knowledge-base because it simply takes a while for new information to gain a footing especially in an area as staid as economics. Still, given the potentially society-changing negotiations going on in Washington right now, this seems a reasonable time to point out that no matter what they decide, they are likely to be wrong because, as anyone who has paid informed attention to the monetary crisis in Europe knows, austerity measures are a death knell for already stressed economies. Nation states that are locked into a fixed currency, like all those who participate in the Euro, have turned over the control of their economies to forces which have no interest in acting in the best interest of each individual country. But, and this is important, the United States is NOT in this position.

Fiat Currency

Once upon a time the US was the prime signatory to the Bretton Woods Monetary System wherein forty-four allied nations agreed to tie their currencies to the US dollar at a fixed rate. The US dollar was tied to gold. This acted, for a time, to stabilize world currency markets and pushed then much needed security throughout the system. Eventually though, because gold is a limited commodity, being tied to the gold standard began to seriously impinge upon the US economy so, in 1971 President Nixon, with the so-called “Nixon Shock”, took the US out of Bretton Woods and off the gold standard. This was a huge deal, bigger even than I can describe. The United States now had a pure, fiat currency (meaning that the currency does not, in itself, have intrinsic value) and that the US, as the issuer of said currency, had new and significantly increased power to make much broader discretionary decisions in terms of economic policy. But a funny thing happened. US monetary policy makers didn’t really do much with their new found freedom.

To begin to explain this I must first make something very, Very, VERY clear – a US federal budget is nothing what-so-ever like your personal household or business budget in any way, shape or form. It’s not. See – you aren’t getting this.

It…is…not…like…your…family…budget.

Period. Do you see why? You don’t do you. *sad face* Well, you are in good company. Most of the country and, to the best of my knowledge, every single member of the House of Representatives, is right there with you. Here’s a hint. You have to work for your money. A business has to produce goods, or services, or, if it is Bain Capital a vulture capital firm, steal money in order to have any. The US government is an issuer of currency. They don’t have to earn it. They print it. (Do NOT go to the “inflation” place yet. I’ll get there later.) Let’s just stay focused on the simple fact that the big difference between the US government and you or me is that they will never run out of the currency needed to cover their debts. (I KNOW. I’ll get to the inflation thing later. Stay focused.)

One of the most interesting things about fiat currency is that taxes are not actually a requirement. Neither is there a need to sell bonds or borrow currency. Do you know what happens when you pay your bill to the IRS in cash? They shred it. No joke. They make a note in their computers next to your account and then that cash is gone. Poof. The only real purpose of taxes is to drive value into the economy (see Sectors, below). Taxes are a way to move value back from the private sector into the public sector. Deficits are the opposite. Deficits are a way to leave value in the private sector. For example:

 if the Department of Defense spends $100 buying a wrench than the private company that sold it to them, let’s call this company Schmoing, gets that $100. The value has transferred from the public into the private sector. If Schmoing than turns around and pays their wrench supplier, ACE Hardware, $15 for the wrench, $15 of the value transferrs to ACE and $85 stays with Schmoing. If ACE than turns around and pays the actual maker of the wrench, a firm in China called Wrenches!, $5 for the wrench than $5 of the original $100 has now moved outside of the US economy. When tax time rolls around, Schmoing and ACE both pay taxes against the profit they made on the sale of the wrench. ACE pays $1 and …now here you know this is just imaginary because in the real world Schmoing would pay nothing…but back to the story, Schmoing pays $9. So, of the original $100, the government received $10 back in taxes and $5 went out internationally (to China) leaving an $85 federal deficit but that money didn’t evaporate. It is still here, in our economy, in the private sector, which is where we all agree we want to keep the majority of the assets of the country.

Sectors

Just as math is math, accounting is accounting. There must be balance in the balance sheet. Understanding that the balance is more macro than we commonly think is why it is so difficult for us to accept that a federal deficit is a good thing. The federal government isn’t balancing a federal budget – they are balancing an economy. These are very different things. If they were balancing a budget, like certain legislators keep insisting is a necessity, than the worry would be that income (taxes) and outgo (government spending) are balanced. This is way,WAY TOO SMALL A VIEW and it’s wrong.

Our economy is divided into three sectors and it is these sectors which need to be in balance. The three sectors are the private sector (individuals and business), the public sector (local, state and federal governments) and the non-domestic sector (foreign individuals and businesses, domestic monies which get moved into foreign tax shelters, and foreign governments). As always in accounting, one sector’s asset is another sector’s liability. This is seen in the example given above when the $90 liability of the public sector becomes the $85 asset of the private sector and the $5 asset of the non-domestic sector. MMT has, therefore, two rules: all sectors cannot be in surplus at the same time and all sectors cannot be in deficit at the same time. Accounting has these same rules. This is nothing new.

As we all know all too well, the private sector cannot last for long in deficit without the economic consequence of recession becoming apparent. Likewise, at least in the US economy, we are not going to be without a trade deficit any time soon. I’m pausing here so you can all stop on the tracks and pay attention to the gigantic epiphany train that is about to mow you down. Yes, people, if we don’t want the private sector to be in deficit and we can’t have the non-domestic sector in deficit than the only option is to have the public sector run a deficit. It’s a basic principle of accounting. It isn’t complicated.

It just isn’t what we have been taught. We have been taught to view the US budget as if it were separate of you and I, an independent entity which required internal balance. Instead, MMT proves that the public and private sectors are two of the three legs upon which this meta entity, the US economy, stands. So when you hear legislators scream about a deficit or you see a Tea Party protestor carrying a sign that says “Say NO to Socilism” on one side and “Don’t Mortage  My Daugters’ Future” on the other side (after you get done laughing at the spelling) the response to this is simple – better you than me because you, meaning the US Treasury, can issue currency as you need it and I can’t.

So why are Italy and Greece in so much trouble with their deficits? That’s obvious. Neither country has control over its currency. Currency itself is, indeed, limited and has become, essentially, a commodity. In the overall European Union ecosystem, essentially, Germany has boomed at the cost of Greece and Italy. It’s that balancing thing again. Still, it’s easy to think of it this way. In the mid 1990’s, Italy had approximately X debt. They were not in crisis. They were a fully functioning economy and they paid their debts in Lira. Today, Italy also has X debt. Notice that this is the same amount. they are not any further in debt than they were but suddenly it is a debt crisis. Why? Well, it’s the Euro, of course. Italy is at the mercy of the Euro and there is no advantage to the Euro in favoring Italy so Italy is drowning under a bad debt they cannot pay with limited Euros.

What we want here in the US is what MMT theorists refer to as a good deficit. A good deficit is one which operates in an unconstrained way in terms of time and arbitrary limits. By contrast, fiscal austerity is deficit by design. Fiscal austerity directly impedes the growth of the private sector. New wealth is only created by the issuing monetary authority. Here, stand on this other train track while I explain this part. (Pay no attention to the giant locomotive that is moving in your direction.) I’ll return to the previous example.

Let’s say Schmoing sells that $85 wrench to Borthrop-Humman instead of the federal government. The value has passed from Borthrop-Humman to Schmoing but it remains in the private sector. It is not new wealth it’s just recycled. Even if Schmoing built the wrench from scratch, all the components were purchased from within the private sector and on the balance sheet the value still remains there. None of it is new.

BAM! *splat* *train wooshes by* Yeah, I know. I felt that way too. I always thought that because we built the thingie we were creating the wealth. My bad. I forgot that we may be building the thingie, the wrench in this case, but it has no monetary value. There is no money to pay for the wrench unless the issuing authority has issued said currency into the system and that can only be done by taking less out in taxes and/or pushing more in with government spending.

Professor Stephanie Kelton, Research Scholar at the Levy Economics Institute and one of the leading authorities on MMT has this to say,

So, let’s focus in on a specific period of time.  The period in the late 1990s and early 2000s when for the first time in decades the US government ran budget surpluses….  Many people would inherently think that would be a good thing.  It shows fiscal responsibility.  Not only did they balance the budget, but they put it in surplus.  Meanwhile, our current account deficits were huge.  The rest of the world was running large positive balances against the US.  That reduced US private-sector savings.  Surpluses fell.  It pushed the private sector into deficit on an unprecedented scale.  The private sector went from surviving above the zero line to being pushed below zero.  And the private sector remained there for a period of years, spending more than its income, borrowing to do it.  And it was all fueled by a massive bubble economy that ended in recession, which drove the public sector’s balance back into deficit where it belongs.

When an economy is already in recession what it needs most desperately is new wealth and, with a fiat currency, that can only come from the issuing authority.

Inflation, Currency Exchange Rates and Unemployment

When was the last time your foot hat the flu? That’s because the flu is systemic. When one part of your body has it, your whole body has it. When an economy is in recession, it is systemic. Everything is effected. It is a meta problem. The odd thing about the US is that we have made choices to try to resolve our crisis without using the single most powerful weapon we have at our disposal. With any fiat currency there are only three things to watch for and none of them are deficit spending. The three economic delimiters are inflation, exchange rates and unemployment. As you can see, these things relate, directly, to each of the sectors.

In the past, deficit hawks and doves alike have tried to assail MMT theorists with the inflation argument. Just within the last three years some of the biggest names in economics, including some of the leading economic advisors to the US Department of Treasury and the Fed, have come to realize what MMT theorists have long known. If you are the issuer of the currency, you do not have to be at the mercy of bond vigilantes. As I said many paragraphs back, the US does not need to sell bonds or borrow currency in order to spend. These are habits and levers we employ as part of fiscal policy but they are not a necessity in terms of financing expenditures. It is interesting to know that the Secretary of the Treasury can order to be struck the currency of his choosing and deposit it in the federal accounts. Just like that. Congress would melt down in a fit of apoplexy, but it would be legal. The money gets injected into the economy and people go back to work. In fact, it would be easy and fast to open up the spigot and return the economy to “full” employment (approximately 3.7% unemployment) within the next two or three years at the most. An economy only gets inflationary, too hot, if new wealth continues to be pumped into the economy after the employment goal is achieved. Up until that time, provided there are no exigent commodity constraints, the supply remains in excess of the demand so inflation does not become a factor.

Again, from Professor Kelton,

Cash registers don’t discriminate. When you spend money in the economy there isn’t someone on the other end saying, ‘will that be public or private today?’ A dollar spent is a dollar spent. The federal government could SAFELY lower taxes, increase government spending, allow aggregate demand to increase.

Inflation is when demand outstrips supply. In the 1970’s this was because there was a sudden commodity shortage. The supply of oil was choked down to a trickle by the newly formed OPEC. Every product that used petrochemicals was effected. Trucks used to transport food needed expensive gas to get cheap lettuce transported across the country. The price of carrots went through the roof. Americans, with their huge gas-guzzling cars, waited in lines for gasoline. The economy could not take the shock. Unemployment rose at the same time prices spiked. Stag-flation was the new buzzword. This period is a classic example of what is called “demand-pull inflation.”

Money is not a commodity. It is not intrinsically limited. It is in no way comparable to oil (or gold). There is no reason that the US government should not be spending money to drive employment. The US dollar is not at risk of major devaluation and both short and long-term bond rates are at or just barely above zero. In other words, no one anywhere thinks the US economy is at risk of not being able to make its loan or bond payments. This is because all the investors, foreign and domestic, know that we are in full control of our currency. They are not at risk.

Final Thoughts

We have all become comfortable with viewing the federal budget just as we would view one small part of a much larger elephant. We each imagine that the “wall” or the “rope” that is in front of us is the whole thing. We each think it looks much like our personal budget only on a bigger scale. In fact, the meta whole is orders of magnitude larger and that entire pachyderm is sitting on a train that is, once again, headed right for you.

Over the next few weeks and months, the President and legislators from both Houses are going to be fighting over an imaginary “crisis” they have dubbed the fiscal cliff.  This battle is entirely unnecessary. Our leadership is so used to thinking in terms of the gold standard that they still don’t know that a whole new age has dawned. The emphasis of MMT is in the power of the State to move within a substantially increased policy space which is largely unconstrained by monetary limitations.

For my part, I’ve told you about it. For your part, please pass this information on to your legislators and to anyone else you know. Post it on your Facebook page. Design a bumpersticker. Just don’t stay quiet.

I’ve digested quite a bit on MMT in recent weeks. I even read some of it before I ate it. A lot of what  read really gets down into the weeds but some was quite accessible and can be found in the following places:

Professor Stephanie Kelton manages the New Economics Perspectives website and is on Twitter as deficitowl . The quotes above were from her excellent interview for Meidaroots. You can also download the truly fabulous podcast she did last week on The Majority Report with Sam Seder.

The Modern Monetary Theory Primer by Dr. L. Randall Wray is a bit weedy but essential for all those interested in MMT. This is the beginnings of what appears to be on its way to being a textbook.

Joseph Firestone who blogs on DailyKos as LetsGetItDone and at Corrente.com in their MMT blog does a commendable job of drawing all the big concepts together.

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You should chisel this moment into stone. In fact you should probably sit down because the shock of my admission may just be too much for some of you.

I was wrong.

Oh, I was not wrong about what I said about Mitt Romney, who will now be consigned to the litterbox of history for failing in a manner so cataclysmic that the entire GOP will be forced to take time away from blaming the black guy to blaming each other for not being able to do arithmetic. I was not wrong about what I said, more than two years ago, about John Bohener having an irreconcilable (and hilarious) problem with the ever-widening solar system of a gap between the Tea Party and reality. I was also not wrong about what I said about about the last fiscal cliff as it applies to the coming so-called “fiscal cliff.” (Personally, I agree with David Waldman, KagroX, that the term “fiscal curb” is more correct.) What I was wrong about was thinking that the GOP would wake the hell up once they had gone splat on the windshield of the Democratic party express.

Republican FAIL

Sure, there are a smattering of GOP pundits talking about substantive changes in message but they are being drowned out both by those who have been unable to get past loudly blaming Mitt Romney for being a candidate who daily demonstrated all the backbone of a windsock and the rest who are madly zeroing in on a few surface issues. Have faith, none of them will get to the core of their problem for three BIG and PAINFULLY OBVIOUS reasons which, of course, the entire bubble-based GOP will overlook and into which Dick Morris will likely do another faceplant.

I will summarize here:

1. If you don’t respect differences and people in general, your policy will reflect that and those people will (eventually) notice.

2. They built it, a base of angry, terrified, white, bigoted, evangelicals who aren’t going to change…ever. It’s going to be impossible to work these folks into a “big tent” platform and waiting for them to die will take a while.

3. Citizens United isn’t really a friend of the GOP. Corporations are their own friend, first, last and always. Corporations will spend accordingly. The demo has now made a huge swing in the direction of the Democrats. Corporations have made a note. They won’t be betting exclusively on the GOP to win from here on out.

The GOP did build a “nuclear option” but they aimed it at themselves because these guys really weren’t kidding, they believed their own spin. Karl Rove’s melt down on FOX News, which will live on in infamy, or, my personal favorite, Mary Matalin’s epic FAIL on CNN, wherein she spends the entire time looking like she just swallowed a fly, are both perfect examples of a simple truth. The GOP had no idea that their message was not landing. They have been locked in their own echo chamber for too long (too long, too long, too long…). As it turns out, only eternally pissed-off white men and a narrow majority of married white women think that a platform of “I’m entitled and the rest of you can go screw yourselves,” is an appropriate way to run a country. The rest of the electorate thinks that things like having a strong and well-coordinated FEMA during a major national crisis, as opposed to a few people handing out canned goods here and there, is essential to maintaining a strong and vibrant nation.

Dems Fail

Still, there are things the Dems should be learning from all of this. (Though, given the fact that we have had Karl Rove, the Dark Lord and Master of the first two items noted below, on our ass for multiple elections and still have not managed to learn these lessons, I am somewhat lacking in hope.)

1. Narrative matters. Yes, our kith and ken all worship at the alter of reality-based information but we tell our story terribly – really, really terribly. President Obama had a strong first term and even now almost no one knows that. Hello! Short, simple, glossy, heartwarming narrative. I mean seriously, people, the very best narratives of this election were provided by the other guy including Big Bird, the pre-1917 Navy and, the corker of them all, the 47% video. Y’all have a year and a half to figure this thing out. If you do, we have a shot at taking back the House and then running the tables for two years.

2. Naming Shit Stuff. WOW. We are so very, very bad at this. The “Affordable Care Act”  – really! Who thought of that? The GOP is a superstar at naming stuff. “Pro-life,” “Obamacare” and “Defense of Marriage Act” these are works of art. Can we please hire one damn Mad Man from Madison Avenue to handle this for us? Where is Don Draper when you need him?!?!?!

3. Self Doubt. During the weeks leading up to the election Republicans were sure they were going to win and Democrats were sure they were going to lose. Dems are genuinely bad at knowing when they have the upper paw and then taking advantage of that fact. Dems are also bad at being who they really are. For years the party has been moving to the right while the country, the electorate, has been moving left on issues while still voting right because *facepalm.* Democrats need to be Democrats.

Democrats have allowed the GOP to run away with the individual freedoms narrative but the fact is that individual freedom is exactly what Democrats support and Republicans oppose on almost every level. Democrats also support the strength of community. These things are not mutually exclusive. Republicans want the world to be either this or that. Democrats understand that there can be a balance where both exist together. (Though, I have to say, in a tip of the hat to BlueGal and DriftGlass, there are not two sides to facts and presenting so-called “balance” on matters of fact is when the media needs to be taken out to the Internet Kitty litterbox and firmly rolled in the material therein.)

On election night all the networks showed coverage of the crowds at the Obama and Romney headquarters. The Obama crowd was all ages, ethnicities and socioeconomic groups. It was all of us. The Romney crowd was white and, based upon the outfits seen on the women, sorely in need of fashion advice. I also think that removing the sticks from up their posteriors would be helpful but that’s really a personal decision.

The Last Word(s)

And finally, that moment for which you have all been waiting, the gloating. These are my favorite thoughts on the subject.

• If you are one of those thinking is that God is involved in each and every little thing that happens to us than His choice is pretty obvious – the black, Kenyan, anti-colonialist, Muslim, socialist, communist, WON. Hahahahahahahaha!

• I’m sending a special “thank you” out to those on the Team Romney who designed Orca, their beached-whale-fail of a get out the vote app . I’m glad those bottles of tequila I sent over while you were in the programming stages proved to be effective. You are welcome.

• Speaking of voting, Florida doesn’t get to vote anymore. They must now turn in their electoral college votes and move to the back of the line, behind Wyoming.

• And this compliments of Second City…

 Through election night God himself was hitting refresh on FiveThirtyEight. He just made the universe, (Nate Silver) turned it into a graph. 

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I just sent $538 to the American Red Cross and I’d like to tell you why. This past week has been filled with right-wing nutbar attacks against a man named Nate Silver. For the three people left who have not yet heard of Nate, go here or here. In simple terms, Nate is a rock star at, among other things, something called “polling aggregation” wherein he has created a method, using statistical modeling, which has proven to be so astonishingly accurate that Time Magazine named Nate one of the World’s 100 Most Influential People. Oh, and as I understand it from people who have met him, he is also just a really “nice guy” by which I take to mean he likes rabbits. This is, of course, beside the point but I thought I would mention it.

Lately, Nate has been under fire because the same people who brought you creationism in textbooks (finally defeated, in Texas, in July of 2011) and a complete denial of climate change* are now taking aim at math.

Where have I heard this story before? Let me think…. Perhaps a blueberry on the half shell well help me to recall? (hint.) Thump! (blueberry arrives) That’s better. Oh, Yes!

During the late eighth to the thirteenth centuries the nations of Islam lead the world in scientific development. For every sixteenth or seventeenth century European scientific great, there was an earlier Arabic polymath who contributed in extraordinary ways to science as a whole. The fields of algebra, geometry and trigonometry either began or were greatly expanded by Arabic genius. Quadratic equations became a part of the mathematical language. Advances in human biology, medicine and pharmacology were so long lasting that books written during this time were still in use in Europe hundreds of years later, as were the designs of astonishingly accurate astrolabes and water clocks. Cartography and sociology grew closer as Arab scientists began to understand the earth in terms of the people who populated it. Modern astronomy still owes the Arabs a great debt. Perhaps most important of all, the baseline for the scientific method was drawn featuring empirical and quantitative approaches to scientific inquiry. The Arabs were at their zenith as a society.

And then they weren’t. The loss of leadership in scientific innovation is described well by Arabs themselves. Senator Adnan Badran, who holds a PhD in molecular biology from an American university and has been both the Prime Minister of Jordan and a longtime Senator said, “Science needs stability, democracy, freedom of expression. You must have an environment that’s conducive to free thinking, to inquiry. If you don’t, you’ll never be able to release the mind’s potential. It’s a very bleak story, a very disappointing story, about the state of science and technology in the Arab region.” Speaking of the past richness of Arabic scientific discoveries he goes on,

We were open. Islam was open, a strong belief with dialogue. It was tolerant, mixing with other civilizations. Then we shifted to being dogmatic. Once you’re dogmatic, you are boxed in.

Gamal Soltan, a political scientist in Egypt says of many modern Islamist scientists,

They’re sure about everything, about how the universe was created, who created it, and they just need to control nature rather than interpret it, but the driving force behind any scientific pursuit is that the truth is still out there.

Remind you of anything?

Science is under assault in this country. From Congressional de-funding of basic research, to the shuttering of Fermilab’s Tevatron Particle Accelerator, to the, now lifted, ban on the use of embryos in stem-cell testing, to the cult of global warming denialism, we are turning our backs on science. We are allowing what happened to the Arab world to happen to us and we are doing it with our eyes wide open. If you want to know how it is that Europe, China and India may well be eating our lunch in just a few years, it starts with all of them being clear that the world is more than 6000 years old and that math is not evil-on-a-stick. Right now, the US is still in contention when young scientists are deciding where to work but it is already an ongoing subject of discussion, in scientific circles, that due to the dogmatic influence of the political right on scientific education, funding, legal support and, most importantly, thought, the United States is on the verge of a scientific brain-drain, something which we will share with Arab nations.

Ankle Biters

I’ll admit it, there was a time when I, myself, was an ankle biter. I grew out of that. Now I box ankles which is, of course, much classier. Still, I think I continue to have some insight into ankle biting in general but for why this matters let’s get back to Nate.

When FiveThirtyEight, Nate’s blog, makes a prediction about the election and says that President Obama has more than an eighty percent chance of winning the election, he is not saying that the President will win. He’s saying, sure, go to that family picnic but you might want to consider taking an umbrella because there is a chance of rain. More importantly, FiveThirtyEight is making no comment what-so-ever on the qualitative value of this outcome. For all we know, Nate is voting for Governor Romney. Nate is doing what it is that scientists do. He is following the data and applying a model he designed which has a past record of success. After the election, he will have a LOT more data because he will be able to verify the accuracy of his predictions and that verification data then becomes part of the larger data set.

Meanwhile, Nate’s ankles are in danger because hedgehogs are out to get him. (If you don’t understand the reference, it’s a thing. It’s called, “reading.” The book is The Signal and the Noise. Read it. Learn something new.) Personally, I wouldn’t put it past one of Nate’s hedgehogs. I mean, some of my best friends are hedgehogs but have you ever really spent an afternoon with one? As Nate describes them, hedgehogs go on and on, for hours, on one subject and they take that same prism and apply it to the whole rest of the world. They are a declarative lot and, despite their name, they rarely hedge. Hedgehogs are all about having everything tied up in one little orderly theory. Just like the over-worn cadre of talking heads brought in both by cable and network television to pontificate on anything and everything, hedgehogs don’t like a mess. They want it all to be black and white simple** and they have to be right. If you knew hedgehogs like I know hedgehogs, you would know Nate is right about this. Clearly, he has spent a lot of time with the prickly little guys.

Like most of those who work in empirical fields, Nate would probably say that scientists are, what he calls, “foxes.” Personally, I find the term a bit off-putting but there it is. Certainly, Nate is himself a fox. According to Nate, foxes understand that when they look out their window and there are no clouds, it still might be good to have an umbrella in the car if the chance of rain is around twenty percent. Foxes see that messy isn’t wrong. In fact, they know that attributing qualitative values to quantitative results is an entirely separate process. Foxes are tolerant of uncertainty and complexity. Foxes aren’t afraid of math as the language of probability.

The science of prediction is fickle and those who are successful in the field require a certain degree of humility just as does all science. Science cannot progress without both the acknowledgement of success and the recognition of failure. The comments made about Nate lately have varied from quite vicious to so outlandish as to be funny (Please, someone tell me that Nate had the good humor to dress up for Halloween as Harry Potter or Gandalf.) But listen up folks, if Mitt Romney wins, Nate Silver said that possibility was among the outcomes. THAT is how probability works.

The value in reading the polling aggregation and blog at FiveThirtyEight is in preparedness. If you are a member of the Romney campaign machine, Nate’s giving you data that is not skewed in the same way as your internal polls and has a better track record for accuracy. Use it as you will. Your choice. Attacking Nate only makes you look small and mean. Shooting the messenger doesn’t change the message. If you really do feel the need to give NRA members someone to shoot, give them Donald Trump and Jack Welch ‘cuz those guys sure haven’t been doing you any favors.

Smack Down

Still, the larger topic is the ongoing attack on science. One need look no farther than Saudi Arabia, Iraq, or Egypt to recognize that relegating science to the mercy of dogma is a bad idea. For too long scientists have hidden under their own rocks while other scientific fields were being blasted and de-funded. Science, and everyone who believes in the value of empirical knowledge can and must start to speak out together – loudly. Nate Silver is the whipping boy of the moment and maybe he likes that sort of thing (wink) but he is only representative of a much larger problem.

As the so-called Fiscal Cliff approaches, you can bet that the neck of science is already on the GOP chopping block. Hurricane Sandy was predicted by scientists at the National Hurricane Center doing work that could not be more efficiently done at the State level or by the private sector. The job they did allowed millions of people to prepare for disaster. That’s what funding science buys you.

In Nate’s case, FiveThirtyEight is predicting that there is a less than 20% chance that It will rain next Tuesday. Governor Romney will, most likely lose the election dramatically, especially in the Electoral College. Personally, I’m planning a picnic. I also donated $538 to the American Red Cross.

* Dear Governor Christie, How do you like me now? Signed – Global Warming
** Actually, the hedgehogs of which I speak specifically want it to be white, male simple but that’s for another blog post.

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Now that retired General Colin Powell endorsed President Barak Obama the pressure on me has increased to issue my formal endorsement so here it is: I, Arliss Bunny, am endorsing President Barack Obama for a second term and I ask all those of you who were participating in the #ArlissForPresident meme to join me in supporting the President. In studying both the President’s past success in saving the economy and in evaluating his plan for the future, I believe his is the only logic-based, real world approach available to voters at this time. I am also a big supporter of ObamaCare as I feel that health care for my staff is essential to seeing to it that my needs can be amply met on a daily basis. Though there are many other reasons, several of which have been detailed in my previous blog posts, I have to admit that one of the biggest reasons I am supporting the President is because, unlike Governor Romney, he never said this:

I’m not a big-game hunter. I’ve always been a rodent and rabbit hunter. Small varmints, if you will. I began when I was 15 or so and I have hunted those kinds of varmints since then.•

VARMINT!!!  RODENT AND RABBIT HUNTER!!!!!

There simply are not enough thumps in the world to describe how insulted I, and I feel I can safely say, every Rabbit American remain about this remark. There was never a hint of an apology. Of course, all this comes from a man who tied his dog to the roof (in a carrier, but still…) for a long family trip so one must consider the source.

On the other paw, the spokesman for the Obama campaign, Ben LaBolt, clarified the President’s position and contributed to this episode by adding,

The president’s record makes clear the he supports and respects the Second Amendment. Mitt Romney is going to have difficulty explaining why he quadrupled fees on gun owners in Massachusetts, then lied about being a lifelong hunter in an act of shameless pandering. That varmint won’t hunt.

Okay, no one really thought that I would be endorsing the Governor. Rabbits really are liberals. We are vegans and when was the last time you met a vegan conservative? Ohhhh, that’s right,  he was that guy sitting next to the lesbian, black, Republican at the last $50,000 per plate fundraiser you attended. It’s simple folks. The Republican Party gets the gun crazies and the Democrats get the vegans. That’s how it is here in the real world.

The problem is, liberals have been pissed, really pissed, for a while now and as a liberal Rabbit American I think there was some question about my being motivated enough to vote in a way that makes my vote count – and by that I mean not for the Green Party. I want you to know that I am voting for the President not just because he is the lesser of two evils, which he most certainly is despite the great rhetoric to the contrary, I’m voting for him because in almost all areas which matter to me he has moved the country in a positive direction. Yes, that doesn’t mean I’m not pissed about the southern leg of the KeystoneXL pipeline or the re-letting of leases on federal lands and it really doesn’t mean I think he has gone far enough on LGBTQ issues but I do know that he stopped the northern leg of Keystone at the border, funding for green tech is way up, DADT is a thing of the past and DOMA is on its way out. Banking regulation is making a comeback and consumer protection already has. Holding fast to end the War on Women, the War on Workers and the War on Voting has occupied departments of his administration on an almost daily basis. For all that, he deserves your vote and another four years. I am proud that, as liberals, we feel unconstrained by our Party and free to call the President out on his litterbox habits but when the election is this close remember that Ross Perot and Ralph Nader have already cost our country enough and we must consider that a lesson learned. Governor Romney is a var-Mitt (and you can quote me on that.)

Congressman Joe Donnelly IS a varmint but I’m endorsing him too. It’s killing me to say this. Voting Donnelly is definitely a “hold your nose and vote” situation for Indiana liberals. While Donnelly does support abortion exceptions, he still believes that he, and a whole lot of other men in Washington, DC, whom you have never met either, should get to control the bodies of women. He also thinks that the parts of the Bible condoning slavery don’t count but the parts he thinks allow for legalized bigotry against the LGBT community are just fine.

Blue Dog

He is a member of the Blue Dog Coalition but ObamaCare and the massive fiscal savings it affords are a touchy subject because freedom. He does, however, support Obamacare/ADA as long as you don’t really call it that. Fortunately, Donnelly does accept that climate change is real and, additionally, he is pushing for a massive overhaul of the Mineral Management Service (which dropped the ball so badly in oversight of off-shore drilling rigs in the gulf). Unfortunately, along with that Joe supports drilling off the continental shelf. He is a significant supporter for renewable technologies, however, and understands that we can’t drill our way to the future. Sadly, he opposes all forms of immigration amnesty and I assume this includes the Dream Act though that is not specified on his website. Unions support Joe because he supports them and Joe is backing the President’s plan to bring the troops in Afghanistan home by 2014.

Here’s the thing – anyone who thinks oppressing others is fine is not fine with me. Rabbits have had enough of that and it continues to be a daily struggle for so many of my kind. (Unlike some religious communities of color, I don’t forget that we are not any of us free until all of us are free.) Still, the world is an imperfect place and Richard Mourdock is at the “Gift from God” Rape level of evil. Joe is the best that is available to us now and the race is VERY close. Additionally, picking up the Indiana seat in the Senate would be a huge win for the Democratic Party and, in most cases, work in our best interests.

Which brings me to my final point, liberals are stupid. The Tea Party mapped out a way to take over the country and we sat by and snickered. What were we thinking!?! The way they mobilized was smart. The way they spelled their signs was not. Still, the jokes on us. We know how to mobilize. We’ve done it before. In spite of the 2010 wave, Indiana remains a purple state under its film of GOP induced fear and bigotry. In all less-than-blue states we would not win immediately but running a few genuinely strong candidates in key districts around the state begins a process of education. Sitting quietly by and letting the Blue Dogs run the show gets us where we are now.

Take it from me, rabbits know a lot about fear. We are prey animals, after all. Our motto is, “Everyone eats rabbits. Rabbits don’t eat anyone.” So you know how we have survived? You know what has made us strong? We breed. We make sure there are always a lot more of us than there are of them. Sadly, liberals aren’t really big breeders but we can be big educators and information can be powerful. We can learn to shape and craft a message that appeals on an emotional level instead of just an intellectual one. We can learn that the next election started yesterday. We can learn that even running and losing is important if it serves the greater goal. And we can fight.

My name is Arliss Bunny. I am a liberal Rabbit American and I approved this message.

•Governor Romney said this on April 7 2007. Don’t think the other Republican Presidential candidates didn’t merrily roast him for it, just, apparently, not enough.

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You have heard the jokes. Most of them are pretty much the same. They all include one of the fly-over states in the Midwest, one or more idiot rednecks and a cow. The premise is that the aforementioned idiots sneak up on a cow while it is standing, asleep, and tip it over. Which is even more stupid than it sounds because it isn’t true. It isn’t that it can’t be done. It’s not against the laws of physics after all, it’s just that it is highly unlikely in no small part because cows sleep lying down. Oh, and wide awake cows don’t take lightly to the idea of being tipped over. They are, in fact, pretty dead set against it…and they weigh in the neighborhood of a thousand pounds and have hooves. Your opposable thumbs and big brain aren’t all that useful when you are way out in a pasture somewhere with a truly pissed off cow. Just as a side note, rabbits consider watching cow tipping attempts to be the highlight of local entertainment. Tickets are sold. Popcorn is consumed.

Which brings me to the subject of my thoughts for the day. Will there ever come a tipping point for the hard swing to the right taken by the modern Republican Party? There has been a lot of talk and, conservatively, a bizillion blog posts (the highlight of which was mine, of course) on the subject of the inexhaustible efforts by various GOP candidates and holders of office to promote lies. I’m not talking about areas in which the GOP and the Democrats disagree. That is expected, necessary, even important. I would worry if we were all Kum-by-yah all the time. My concern is with actual lies. Lies which exist in direct opposition to facts which are not only proven but which have direct observable verification available for all to see. Is there a point at which the GOP will finally admit that the emperor has no clothes?

I am not worried about the lies as they have impacted the 2012 election. Frankly, I think that ship has already sailed. That cow has been tipped for approximately 48% of Americans. What worries me is all the ways these lies are seeping into so many other aspects of society. Teachers in many states are being required to teach both evolution and creationism. On one hand candidates speak about their love for teachers and the importance of seeing to it that the US return to leadership in math and science so that we will remain competitive and at the same time those teachers are being required to teach actual lies to students. Teachers are required to dishonor the name of science as a matter of curriculum. This isn’t the policy of a nation of leaders. It is an example of Republicans tipping cows at the cost of our student’s education.

Did you notice that during the recent Presidential debates, the subject of climate change never came up? This isn’t because it isn’t one of the most critical threats facing our planet today. It is because moderators (and President Obama) didn’t want to get into yet another round of fact vs. absolute denial of fact. It would have been a waste of precious network time and the short attention span of most Americans. So this threat, which may well be the very end of our society, remains a game of cow tipping for anyone who wants to hold office from the GOP. No amount of showing them facts or photos or the results from scientific missions sponsored by everyone from NASA to the Chinese will satisfy the GOP. The emperor has clothes no matter how much of his junk is just hanging out there for all to see. It would be funny except that it’s not. It’s really not.

It even applies to simple things. I don’t think I’ve ever seen Bill Maher as mad as he was this past week when he was directly quoting President Obama’s speech made the day following the attack in Libya. The GOP spinner just sat right there and kept denying that the word terror meant terror. This takes me right back to the audacity of President Clinton when he was trying to assert that it all depended upon the definition of the word “is.” NO IT DOESN’T. It didn’t then and it doesn’t now. President Obama stood in the rose garden of the White House on the day after four Americans were killed and spoke in grave and dark tones about the events of the previous day. No one on the planet without a political agenda doubted that Obama was considering all his options. God only knows what he was actually ordering behind closed doors. This is the President who has steadfastly maintained a terrorist kill list, approved drone strikes and, essentially, authorized an invasion of Pakistan in order to chase down those who pose a direct threat to the United States. Messing around with Barak Obama’s country has proven to be a terminal condition to more terrorists than we will ever know. But guess what, I was wrong before. More than God knows what President Obama has decided to do about Libya. I suspect that as I dictate this there are Deltas and SEALS training to do the will of this President. Which brings me back to the Bill Maher show. This Romney apologist was arguing that the President of the United States was implying in some way that the attack in Libya was not serious. I would argue that the day after an attack is not the time to be parsing the sentence construction of the President unless, of course, he is reading a children’s book to a class of kids and he wants to finish up before bothering to get involved.

Basing policy and action on lies is not just dangerous, it is catastrophic. Lies are why we invaded Iraq. It’s why the southern leg of a pipeline which will carry tar sands bitumen from Canada to US refineries and then on to ships in the Gulf, where the oil will set sail for China, is currently eating its way through expropriated ranch and farm land in Texas and Oklahoma. It’s why people who have been legitimately registered to vote for years will be denied their Constitutionally-given right to vote this November. And it is perhaps most notably one of the biggest conributors to why our economy crashed.

Because facts are facts.

  • Iraq did not have weapons of mass destruction and our intelligence services knew that.
  • The Keystone XL Pipeline will not appreciably increase the energy independence of the United States.
  • Voter fraud accounts for less than .00007% of votes cast.
  • The regulation of the banking industry which was put in place after the Great Depression, known as Glass-Steagall, did prevent another depression in the intervening years and removing it did not account for ground-true economic growth.

And it’s getting worse. Just 35% of self-identified conservatives report that they have a “great deal of trust in science” according to a study done in 2010 and a paper reporting on it in the April 2012 issue of the American Sociological Review. These are the people who have made The Creation Museum one of the largest tourist draws in the state of Kentucky which, as I may have mentioned before, features dioramas of humans riding dinosaurs. In other words, these are the people who view The Flintstones as a documentary.

So at what point does too far become so far that even those who wanted to go There start to notice that There isn’t all it’s cracked up be? Democrats live in hope that just by presenting facts over and over and by those facts being proven again and again in the real world that eventually Republicans will join the reality parade. But that’s wrong because fear doesn’t work that way, greed doesn’t work that way and the lust for power doesn’t work that way. The GOP has too much invested in its mythos – and by invested I mean billions of dollars. Driving emotion over reason has proven to be an insanely successful tactic even though it is, well, umm…insane.

Which has started me wondering, at the beginning of all this I think that GOP puppet masters knew they were pitching a fable but lately they have really started to sound like even they believe their own crazy. It’s one thing for Karl Rove or the Koch brothers to convince the masses that cows sleep standing up but when I see them confidently striding out across the pasture toward a cow, it gives me more than pause, it gives me a cold chill. The thing about reality is that at some point she will make them her bitch and when she does a pissed off cow will be the least of our worries.

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By now most of you have heard the joke about Romnesia and the punch line about it being a pre-existing condition which is, thankfully, covered by ObamaCare. (If you haven’t, go here to listen to the President of the United States tell it better than this rabbit ever could.) I also like the notion of Ryan-itus as an FTD (Fox Transmitted Disease.) As jokes go, these things make me giggle which I don’t do often and surely haven’t done much during the extremities of this election cycle. Last week, however, I broke my long silence and now I’m on a roll. It’s all because of that second debate. [If I have to be honest, I slept through the first debate and, apparently, I wasn’t the only one...Mr. President.]

I thought the second debate was much more interesting, especially since both candidates showed up, but what has been even more compelling to me are the videos of Governor Romney debating himself as seen here and here. All of which serves to bring me to my point, Romney is speaking in tongues. All the Romney reversals, “misunderstandings” and outright lies are so frequent that they can’t really be accidental, can they? I think they have to be strategic. They are locking the doors of the room, dumping snakes on the floor and then speaking in tongues…and somewhere between 44.8 and 48 percent of the electorate is buying it.

Bring on the lies!

Bring on the snakes!

Surely, I am a believer and I will be spared.

Except, of course, that snakes don’t work that way and eventually poison spreads.

Speaking In Tongues

 Romney’s Economic Plan – The economic plan which Governor Romney still refuses to detail can not possibly work. It can’t. That is a fact proven by every single outside, independent organization which has reviewed it. (The only organization to review it and find it workable is owned, in part, by high ranking GOP operatives.)

Romney’s Jobs Plan – though he seems to give a different number every day and I hear that he and Paul Ryan have even been known to give different numbers on the same day, the Governor is promising to add as many as 23 million jobs, with his imaginary jobs plan, while he is the President. Ummm…no. Times three. No. No. No. The plan isn’t his.” The number isn’t 23 million. The time span given in the plan is ten years.

Romney on Women – No matter what you thought you heard during the debates, Romney opposes abortion of all kinds in all cases and has said he would be “delighted” to sign a law and/or appoint Supreme Court judges who say just that. No matter what you thought you heard at the debate, Romney supports the Blunt amendment, which would make it lawful for any and all employers to refuse to include contraceptive coverage in any company sponsored health plan. And all of this is before I even mention “binders full of women” a subject upon which I have a whole blog entry here.

Romney on Medicare – First of all, the President did not take $716 billion dollars away from Medicare thereby weakening it. The money was moved around from one line item to another in an effort to strengthen Medicare. This bureaucratic change extended the life of Medicare for eight more years. Anything else you might hear from the Governor on that subject is likely a lie and is patently disproven here. Second, the Governor really does believe in eliminating Medicare and replacing it with vouchers. Here is the thing that will always be true, Medicare and government-based systems may not be perfect but they are not in health care to make money. They are invested only in providing care. Anthem Blue Cross/Blue Shield is rewarded every time they deny care for a customer. It is money they do not have to spend. The Governor wants more of that. He wants you on your back with an insurance company’s fangs on your throat. Listen to a rabbit when I say, “don’t do it! Don’t go into the light!”

Romney on China – Then there is the new story about the Governor and his ownership in the company Sensata that is right in the middle of shipping jobs to China. It isn’t the first time Romney companies have done so and it won’t be the last. Oh, he can tell you his investments are in a “blind trust” but know this, he can see through that blindfold just fine. One of the things I would like to know in Monday’s foreign policy debate:

If Bain Capital was to bring back every job they had sent or caused to be sent to China back to the US, how many jobs would that be?

I’m just guessing but mightn’t those jobs be enough to reverse the negative jobs numbers in Wisconsin or Nevada, two of only six states with jobs numbers which are down from over a year ago? Governor, I suspect that when you speak of taking a tough line with China, you mean something entirely different than what the rest of us mean. You mean things like how many kilowatt hours of grid time will your factories be allotted. Or, how do you keep Chinese factories you don’t own from reverse engineering the products of Chinese factories you do own. In the story of the Garden of Eden, the serpent talks Eve into taking a bite of an apple. When the Governor speaks of China, he does so with a forked tongue and we all know where that leads.

Romney on the World – The Governor thinks he is tough. He certainly likes to talk tough. Americans eat that up after all. We love the image of being the biggest and baddest country in the world. We think it suits us. Well, guess what. News Flash. Twitterstorm. The world has changed. National entities are not the only actors on the international stage and they are only an increasingly small percentage of the conversation. The Governor’s tough talk could severely damage our relationship with allies (see the news coverage of his trip to the UK for reference) and it could easily tip us into war with both Iran and Syria. (Regarding Syria see here and here.) What it will not do is make us any safer. What does make us safer is being perceived as going in the same general direction as the majority of those engaging in the conversation worldwide. Governor, in case no one told you, the thing most likely to change the balance of power in the world today is the cell phone. Brace yourself…and learn to use Twitter.

GOP Facts are Fungible

The GOP has struck upon the manna of “facts as fungible commodities” and they have been worshiping at that alter since the infamous “Contract With On America.” Yes, the Contract was able to hypnotize the electorate but it also was the beginning of the rise of the economic policies which ultimately lead to the W’s Great Economic Collapse. Democrats, meanwhile, have steadfastly, and to our past electoral detriment, continued to rely upon facts, logic, luck and the intellectual stick up our proverbial butts. [Note: none of those three things alone are the way to win an election, guys.]

My Thoughts on 2012 Election Cycle Take-Aways

• Lies (aka Romnesia) will be progressively harder to sell and impossible to maintain as fact checking becomes both common and instant…by everyone. (But this is one of my current favorites.) While the GOP has still been successful, to an extent, in 2012, try it again in 2016 and see where it gets you.

• There are and always will be people who are too afraid of change to be willing to accept any truth which encompasses said change. These people are the GOP base from here on out. The GOP is no longer the party of fiscal conservatism, it is the party of fear.

• Demographics do not favor the GOP – not with women, minorities or the young, none of whom are interested in being in binders any more…ever.

• Technology and social media do not favor the GOP either in the US or around the world…and neither does science (but that last part is another blog post isn’t it.)

• Democrats have to remember to show up and fight – not just our President, all of us.

• OH – and when you are a Mormon, Republican and the Salt Lake Tribune endorses the other guy because you haven’t been truthful enough, well that’s just… … … …. I’m sorry, I can’t seem to stop laughing.

To those of you who follow me, this has not been my usual humorous posting. I apologize. As you can tell, I am especially disapproving these days. Besides, I’m allowing others to carry the awesome burden of humor for me and I have to say that Mr. Eastwood has done a fine job. Thank you, sir, and have a seat.

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Okay. I’ve been quiet. I’ve been good. But then, last night, Mitt Romney and his “…binders full of women…” put me over the edge. WOMEN IN BINDERS!!! Really! And this is coming from someone who has eaten a few binders in her time. (Don’t gasp, it’s a rabbit thing.) Now, my issue is not the great humor to be derived from this statement. (See “Women In Binders” on Facebook for some pretty hilarious drill down on this.)  My issue is that it is profoundly, massively, wholly and completely condescending and paternalistic. He treated all females and, frankly, all of us period, like we are dumb bunnies. (Again, this is an area in which I have some expertise because, trust me, I’ve known some dumb bunnies in my time.)

Still, before I get into my thoughts on the scope of this comment, I want to address the facts around it which is to say that, as with oh-so-many other things that come out of Flip-Flop-Romney’s mouth, it isn’t true. Allow me to repeat. It never happened. An initiative existed in Massachusetts, started by the MassGAP organization, prior to the election of Governor Romney, to increase the number of women in leadership positions at the State level. When Governor Romney took office, he inherited this program. Period. End of story. He didn’t initiate it. He didn’t notice that he was surrounded only by wealthy white men (see the post-debate photos for an example of this behavior). He just lived with something which was already in place and which, he perceived, came out of some binder he was shown at some point in time. I know this won’t come as a shock to any of you, not even to Republicans who can remember as far back as the Republican debates, Mitt lied. Again. I mean really, people, this man makes Nixon and Johnson look like friggin’ Boy Scouts. And all of that comes before the part of this that really gets my dewlap*. (*Look it up. It’s your word for the day.)

Let’s take these things in no particular order:

1. Mitt didn’t have enough women in his organization in the first place and when it was pointed out to him he had to resort to a BINDER for assistance.

2.  Once again, Mitt did not answer the question. Obama was over there saying “Lilly Leadbetter Act” and Mitt had a story about a binder!

3. And AGAIN we have Mitt (or his boy-child Ryan) telling a story about a small, individual situation that absolutely does not address the question at hand, instead of answering the question itself. Women don’t deserve fair pay but they do get a binder. Auto workers don’t deserve to have their jobs saved but there was this one family who lost their son in an auto accident and Mittens was really generous to them. [General note to anyone who EVER debates Joe Biden in the future: don't go after Joe with an auto accident story. His will trump yours every single time. Every...single...time....]

4.  Did you notice Mitt when he answered the woman who asked the tax question. He slowed down, used small words and spoke as if he was speaking to a third grader? Now maybe his treating her like she was an idiot was fine with you. He is used to dealing with  Tea Party audiences, after all, but it sure as H…e…double carrots bothered me. Here is my take on things. Anyone bothering to watch the debate instead of the ballgame passed third grade and is deserving of respect. Oh – and he didn’t answer that question either but don’t worry, you can get the detail on that here.

5. Unlike Obama, Romney sees no relationship between the issues of fair pay, health care, right to choice, the elimination of tax deductions for child care – and women. For Romney, these are all separate things. He never speaks of them in any kind of holistic or integrated way. Despite the efforts of Ms. Crowley to intervene, Obama gets that all of these things are of-a-piece. Obama isn’t changing topics when he speaks of choice in a discussion of fair pay. He is talking about empowering women all the way around. Not so much with Romney. “Knock! Knock!” “Ummm…yes?” “This is a CLUE! You thought your approval numbers among likely women votes were low before! Here, catch.” *crash* *clatter* *muffled rolling sound* “Nope. Missed again.”

Look, it isn’t just that “binders full of women” is insulting. It isn’t just that Mitt is so dense that he can’t imagine why it would be such a fracking paternalistic thing to say. It’s that he doesn’t get it at all. Not any of it. Mitt’s understanding of women, taught to him at the knee of his father and in services each Sunday for his entire life, is that a woman is someone who requires a man to reach back and call her name in order to be welcomed into heaven. [Personally, I'm hoping that Hillary remembers this attitude when she is approving the list for drone strikes during her Presidency.] Mitt thinks of women in binders and uses small words because that is how little he thinks of women. Period. I suggest that on November 6th, all females unite to show Mittens just how little we think of him. Thump!

November 6th – brought to you by the letters F and U, the number 47 and Office Depot. Go get ‘im, girlz.

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Oh, Great Bunny, I come to you tonight, in prayer, my head bowed and my paws together, beseeching you to ease the immense pain and suffering of others and by “others” I mean the bunnies of Mexico, who have been shaken to the core in this massive earthquake, and, of course, the Republican party….

OH! *cough* I didn’t see you there! As I bask in the glorious sunspot on the floor in my room I find myself truly appreciating the joy that is Spring along with all the entertainment it brings. I mean, what could possibly be better than tuning in each night to _________________________ (pick ANY news/politics show) and reveling in the clown car that has become the Republican Party. Truly, I haven’t laughed this much in years. Also, I am already looking forward to seeing the dresses Michelle wears to the Inauguration and the balls that night. After all, this time she isn’t limited to just an American designer. She will be done, done, done with campaigns and elections. I’m expecting to hear that she spent the night in epic Katy Perry form.

http://www.buzzsugar.com/Katy-Perry-Music-Video-Last-Friday-Night-TGIF-17859109

It didn’t have to be this way, of course. The Republicans could have chosen to run someone who might actually get elected but, much to the off-the-hook, unending gratitude of comedians everywhere, they LITERALLY elected otherwise. Even at this late battling-all-the-way-to-the-Convention date, they could feign something that actually resembles strategy – but they won’t and I could not possibly be more geeked about it and trust me when I tell you, I’m not the “geeked” sort. Ever. Still, this is such a ridiculous confluence of Republican mis-steps that I am making an exception.

What They WILL Do

Republicans will nominate Mitt Romney and Democrats will ride Romney-isms like:

Corporations are people, my friend.

and

“It’s because of the banks…. Well, banks aren’t bad people. They’re just overwhelmed right now.”

and

“The banks are scared to death, of course. They’re feeling the same thing you’re feeling.”

and

I’m not concerned with the very poor.

and, my personal favorite

The economy is coming back….It always comes back after a recession.

[Really, Mitt, who told you that economies naturally recover and was it inscribed on golden tablets -  because that is not an economic fact so it must have to do with your religious beliefs.]

…all the way to the White House. Well, that and the fact that Democrats actually have policies that are more closely aligned with what the greater percentage of the electorate really wants – like banking reform, building and protecting American jobs, a safety net when things don’t work out, health care and getting the hell up out of the personal lives of everyone in America including, and especially, women and homosexuals.

Image

Bo advises the President.

All this AND Obama never strapped the family dog to the roof of his car which I can tell you, as someone who has spent more than my fair share of time in the evil box with holes, is reason enough to vote Obama. Two thirds of voters, which includes a whole lot of Republican dog owners, call Romney’s actions “inhumane.” I’m not nearly as polite. More to the election winning point, 42% of women polled say that it makes them less likely to vote Romney. I think we can anticipate LOTS of Obama posters featuring him playing with first dog Bo. Rallys will inevitably include “Dogs for Obama” posters and even cat owners will cough it up because this is just too hideous a fur ball to ignore.

What They SHOULD Do

They should nominate Rick Santorum. I’ll wait until you finish gasping with horror… … … … … … … …. Alright, no one ever said I was patient, finish gasping on your own time.

Republicans should nominate Santorum not because he can win, which he most certainly can not, and not because Lorne Michaels would be forever grateful but because it is the one and only chance the non-right wing part of the Republican Party, read as “the electable Republicans,” may EVER have to send the right-wing, Tea Party nut bars back to the kiddie table…for good.

The core Republican leadership already knows that this election is a lost cause and if they were savvy they would put this loss to work for them by proving, for once and for all, that the far greater majority of Americans are not bigoted, fascists and thereby reducing the Tea Party to their rightful place as the whining, minority voice which is the true reflection of their place in this country.

Take a note, people, be they ultra-liberals or Tea Partiers, extremists are the fringe and we have been allowing them to run the show for too long. Once upon a time it was possible to engage in civil debate in this country. In fact, that was the case right up to “The Contract With On America.” Newt Gingrich and Karl Rove changed everything because they created a political poison-well whereby winning by whatever means necessary was the ONLY course allowed and Democrats were to be opposed on all fronts, even those upon which both parties agreed. They created the concept that Democrats were wrong ONLY because they were Democrats.

This brings us up to today where the Tea Party will shut down government and ruin lives rather than enter into goodwill negotiations  and, in case you missed it, this has brought disaster down not just upon the country* but upon the Republican Party itself. Don’t mistake me, I believe in the right to disapprove. In fact, I am the Queen of that parade, but I believe in a loyal opposition. I think most of us do. I think it is the cornerstone of Democracy and that it is worth fighting for.

[*You will recall that the credit rating of the US was lowered not because of the financial crisis but because our Congress was deadlocked in debate and could not take the actions the world financial community deemed necessary.]

The Republican Party has a chance, a perfect chance, to fight that fight on behalf of all of us…but they won’t because that would take more courage than just creating a misleading name for something or someone and repeating it over and over and over and, as we all know, they are the kings of that parade.

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