Moderate GOP candidate Jon Huntsman had brief attention recently for suggesting Dodd-Frank did not end Too Big to Fail and for proposing some solutions. After reading Matthew Yglesias, I have to agree that Huntsman doesn't propose anything serious to deal with this problem.
I don't completely disagree with Huntsman's analysis that Dodd-Frank financial reform bill did not end Too Big to Fail. While it provides for a way to wind down big banks if they face trouble, the government might still feel the need to provide a bail out instead (or in addition?).
Huntsman seems to call for a repeal of Dodd-Frank, then that a provision similar or the same as Dodd-Frank's wind-down be enacted. He also calls for a tax on these large institutions (which I think Republicans opposed). None of this seems new or too strong.
If we want to end Too Big to Fail, we need to actually break up big banks. Otherwise, I think we are doing all we can.
Saturday, October 22, 2011
My Move Left
For those of you that are long time followers of my blog (anyone?) or people close to me, you might be thinking that I seem to have moved left over the years*. One or two people have said this outright, and so I have given it some thought.
Ultimately, my conclusion is that I was more moderate during the Iraq War, mostly because I found that Democrats had no viable solution except to attack the war and attack Bush. I thought we had to stay in Iraq (you break it, you own it). So I wanted to support people that understood that and had good proposals. Along those lines, I liked people like McCain, Powell, Biden (though his solution was crazy).
But I don’t think my domestic policies have changed any. And now that domestic policy dominates, I think it appears that I have moved left, when in reality, the issues changed to things on which I am more liberal.
To be honest though, I cannot say for sure that I haven't moved left on foreign policy. I still think I was right to defend staying in Iraq. And I think I always supported the surge. But I do have a vague feeling that I was a bit more hawkish, at least at in 2004. Thoughts?
*There was a time when I had said that I would support John McCain for president. This was long before his 2008 campaign though, when he turned far to the right to appease his base.
Ultimately, my conclusion is that I was more moderate during the Iraq War, mostly because I found that Democrats had no viable solution except to attack the war and attack Bush. I thought we had to stay in Iraq (you break it, you own it). So I wanted to support people that understood that and had good proposals. Along those lines, I liked people like McCain, Powell, Biden (though his solution was crazy).
But I don’t think my domestic policies have changed any. And now that domestic policy dominates, I think it appears that I have moved left, when in reality, the issues changed to things on which I am more liberal.
To be honest though, I cannot say for sure that I haven't moved left on foreign policy. I still think I was right to defend staying in Iraq. And I think I always supported the surge. But I do have a vague feeling that I was a bit more hawkish, at least at in 2004. Thoughts?
*There was a time when I had said that I would support John McCain for president. This was long before his 2008 campaign though, when he turned far to the right to appease his base.
The Reason for Taxes
Democrats are often accused of favoring redistribution of wealth. I think that is inaccurate. Some liberals may feel this way, but I think most do not. And I especially do not feel this way. Instead, I believe in having energetic government that protects rights (courts, regulatory oversight), provides for growth (education, research, and infrastructure) and helps those at the bottom (by providing social safety net, food and housing) and helps them move up (education, job training).
In order to achieve this, we need to raise revenues. If we agree that we need these programs, and I think a majority of Americans do agree, than we need to pay for it. And to do so, the burden should fall on everyone, but the rich should pay more. This is why we do, and should, have a progressive income tax structure. It isn’t to punish the rich. It is to pay for necessary programs.
Furthermore, talking about who should pay for the services we need, and pointing out that the rich keep trying to get tax cuts at the expense of the poor is not class warfare. Implementing policies that actually do increase the burdens on the middle and lower classes so the rich can pay less is class warfare.
In order to achieve this, we need to raise revenues. If we agree that we need these programs, and I think a majority of Americans do agree, than we need to pay for it. And to do so, the burden should fall on everyone, but the rich should pay more. This is why we do, and should, have a progressive income tax structure. It isn’t to punish the rich. It is to pay for necessary programs.
Furthermore, talking about who should pay for the services we need, and pointing out that the rich keep trying to get tax cuts at the expense of the poor is not class warfare. Implementing policies that actually do increase the burdens on the middle and lower classes so the rich can pay less is class warfare.
A Mistake
I agree with this series at Foreign Policy - the Nobel Peace Prize given to President Barack Obama was a mistake. Here is the relevant quote:
Obama also surprised many by devoting much of his Nobel lecture to a defense of the legitimate use of force.
Indeed, the Nobel seems to have been given to candidate Obama -- the one defined by his opposition to the war in Iraq, promise to close Guantánamo, and pledge to foster dialogue with hostile governments -- rather than President Obama, better known for the Afghan surge, a massively expanded drone war, military intervention in Libya, and the extrajudicial killings of Anwar al-Awlaki and Osama bin Laden. Not to mention that Gitmo's still open and there's been little progress made on Middle East peace.
These actions may all be justifiable, but they're likely not what the committee had in mind.
Flat Tax v. Simple Tax
There has been a log of talk lately about the need to simplify the tax code. Let's start by assuming that is true (at the end of this post, I'll briefly address whether it is true). Right now, we have a tax code that is both progressive - meaning tax rates change as income changes - and has a lot of exemptions and deductions.
What makes the tax code complicated are the exemptions and deductions, which are numerous and the wealthy can use to decrease their tax liability. The progressive nature of the code is not what is complicated. In fact, without exemptions, figuring out your tax liability would be simple. You pay a certain percentage on your income below a certain amount, and a higher percentage on income above that amount.
What we are seeing from Republican candidates are proposals for flat taxes, which eliminate deductions and the progressive tax code. They are trying to make it sound like a flat tax is necessary to simplify the code while hiding that what will really happen is a tax cut for the wealthy. They are also adding back in some exemptions (Herman Cain's 999), which seems to be the worst of both worlds - a regressive tax that remains complicated.
Before I end, I do want to address whether the complication is necessary. The exemptions and deductions are used to incentivize certain behaviors. We can argue the merits of each exemption, but in general, we should decide whether we want a simple code and forgo providing incentives for things like homeownership, donations to charity, and affordable housing to name a few.
I don't have a strong opinion at the moment. I would rather affordable housing be provided through direct spending rather than tax spending. However, I realize tax spending is easier to implement than direct spending - contrary to rational economics models, there appears to be a psychological difference between the two. And I think charity spending is often to museums and private colleges, which may not be the most deserving or urgent needs. But I could be convinced that we need the incentives if there are better examples.
What makes the tax code complicated are the exemptions and deductions, which are numerous and the wealthy can use to decrease their tax liability. The progressive nature of the code is not what is complicated. In fact, without exemptions, figuring out your tax liability would be simple. You pay a certain percentage on your income below a certain amount, and a higher percentage on income above that amount.
What we are seeing from Republican candidates are proposals for flat taxes, which eliminate deductions and the progressive tax code. They are trying to make it sound like a flat tax is necessary to simplify the code while hiding that what will really happen is a tax cut for the wealthy. They are also adding back in some exemptions (Herman Cain's 999), which seems to be the worst of both worlds - a regressive tax that remains complicated.
Before I end, I do want to address whether the complication is necessary. The exemptions and deductions are used to incentivize certain behaviors. We can argue the merits of each exemption, but in general, we should decide whether we want a simple code and forgo providing incentives for things like homeownership, donations to charity, and affordable housing to name a few.
I don't have a strong opinion at the moment. I would rather affordable housing be provided through direct spending rather than tax spending. However, I realize tax spending is easier to implement than direct spending - contrary to rational economics models, there appears to be a psychological difference between the two. And I think charity spending is often to museums and private colleges, which may not be the most deserving or urgent needs. But I could be convinced that we need the incentives if there are better examples.
Wednesday, October 19, 2011
Who are the 99 Percent?
The recent Occupy Wall Street protests have been referencing the 99 percent versus the 1 percent - ie the percentiles of income distribution in the US. But I think it is important that we all see what the different income levels are at the different percentiles.
Income percentiles (from Tax Policy Center)
25%: $19,375
50%: $42,327
75%: $85,811
90%: $154,131
99%: $506,533
There is more nuance available if you want it. Numbers are different based on location (median income in NYC is $50,173) and tax filing status (median income for married filing jointly is $74,608). But this should give a general sense.
I won’t say where I am on this chart, but I will say that I don’t feel as high up as I am, which is apparently a pretty common phenomenon. I think I, and others, feel this way because purchasing power among much of the chart is relatively similar. I am still facing things I cannot afford that seem like basics. In other words, I would expect that someone at my position in the percentiles would have much more disposable income than I do. But overall, I am pretty comfortable, so I am not complaining.
Anyway, now when people talk about the 99 percent, we know who that is. And we know who the 99th percentile are.
Income percentiles (from Tax Policy Center)
25%: $19,375
50%: $42,327
75%: $85,811
90%: $154,131
99%: $506,533
There is more nuance available if you want it. Numbers are different based on location (median income in NYC is $50,173) and tax filing status (median income for married filing jointly is $74,608). But this should give a general sense.
I won’t say where I am on this chart, but I will say that I don’t feel as high up as I am, which is apparently a pretty common phenomenon. I think I, and others, feel this way because purchasing power among much of the chart is relatively similar. I am still facing things I cannot afford that seem like basics. In other words, I would expect that someone at my position in the percentiles would have much more disposable income than I do. But overall, I am pretty comfortable, so I am not complaining.
Anyway, now when people talk about the 99 percent, we know who that is. And we know who the 99th percentile are.
Friday, October 07, 2011
About the Occupation (of Wall Street)
The protests on and near Wall Street continue and are starting to get regular coverage. I work a few blocks away and so have witnessed them in their element at Liberty Square Park as well as marching and speaking outside my building near City Hall.
My initial thoughts about the protests were that they were kind of silly. They seemed to lack a purpose and goal. Why protest Wall Street? Even at its most successful, would a protest convince Wall Street to be less profit-driven? If you want to affect Wall Street, you need to change laws.
But I am starting to feel differently. While I still think it is more than a little nebulous, I think it might serve a really good purpose. This could finally be the response to the Tea Party - which is itself nebulous and a little silly. I think we need a strong and vocal liberal wing of the party that can actually push our moderate leaders to move away from center-right policies and embrace at the very least center-left.
I had been thinking that there would eventually be a left-wing movement again (I think I first heard Peggy Noonan raise the possibility). But my prediction, which I hadn't voiced yet, was that it would come after the 2012 elections. I figured we would probably get a Republican president, almost definitely get a Republican senate, and might keep a Republican House. If that happened, the Republicans would definitely overreach and try to ax popular government programs. And this would prompt the liberal awakening. Independents would also revolt because they would finally realize that smaller government means less services and cuts to programs they actually like.
If all of this can start before the 2012 elections and avoid a Republican government, that would be great. So I really do hope this movement, which had humble beginnings, can create a space where liberal / progressive values are once again championed - and loudly. And remember, we don't have to agree with everything in the movement, but we do need it to be counterbalance to the crazies on the right that are at the moment driving policy.
My initial thoughts about the protests were that they were kind of silly. They seemed to lack a purpose and goal. Why protest Wall Street? Even at its most successful, would a protest convince Wall Street to be less profit-driven? If you want to affect Wall Street, you need to change laws.
But I am starting to feel differently. While I still think it is more than a little nebulous, I think it might serve a really good purpose. This could finally be the response to the Tea Party - which is itself nebulous and a little silly. I think we need a strong and vocal liberal wing of the party that can actually push our moderate leaders to move away from center-right policies and embrace at the very least center-left.
I had been thinking that there would eventually be a left-wing movement again (I think I first heard Peggy Noonan raise the possibility). But my prediction, which I hadn't voiced yet, was that it would come after the 2012 elections. I figured we would probably get a Republican president, almost definitely get a Republican senate, and might keep a Republican House. If that happened, the Republicans would definitely overreach and try to ax popular government programs. And this would prompt the liberal awakening. Independents would also revolt because they would finally realize that smaller government means less services and cuts to programs they actually like.
If all of this can start before the 2012 elections and avoid a Republican government, that would be great. So I really do hope this movement, which had humble beginnings, can create a space where liberal / progressive values are once again championed - and loudly. And remember, we don't have to agree with everything in the movement, but we do need it to be counterbalance to the crazies on the right that are at the moment driving policy.
Goodbye to a Friend
A few weeks ago I went to a celebration of the life of a friend. I went to graduate school with her and she died recently from an aggressive form of cancer. There are a lot of reasons why this has affected me, but I want to focus on one part in particular for this blog.
My friend was a government superstar. We had both received Master's Degrees from the Maxwell School of Citizenship and Public Affairs at Syracuse University. It is one of the best schools in the country for public administration, and at one of the best schools, she has been one of the most successful. Her obituary in the Washington Post talks briefly about her work on human rights at the State Department. And at the celebration of her life, her coworkers talked about all of her amazing accomplishments. (She seemingly had my dream job - though for me it is just a dream and not something I actually work towards nor am even near qualified for. For her it was a dream job and she lived it and was amazing at it.)
What I take away from this is that while she died young and leaves behind a loving husband and young daughter, she can take solace in the life she lived and what she accomplished; she has done so much for human rights around the world.
At Maxwell, we were taught the Athenian Oath, which ends as follows:
You might guess that there is political commentary coming. And you are right. I want to be able to say the same thing when I leave. And that is what I don't understand about conservatism. At it's base, it is about smaller government - less taxes and less services. Most often this means less services for those in need. And whether intentional or not, it often means under-producing other beneficial public goods like education and infrastructure.
The point is that I just can't imagine being satisfied with a life that is spent not improving the world, not trying to make things better, and not trying to help people. Without that, what is your legacy? We are only here for a brief time, and so we should be making sure we are improving the world while we are here. And that is why I am a Democrat.
I can only hope to come close to the example my friend left for us.
My friend was a government superstar. We had both received Master's Degrees from the Maxwell School of Citizenship and Public Affairs at Syracuse University. It is one of the best schools in the country for public administration, and at one of the best schools, she has been one of the most successful. Her obituary in the Washington Post talks briefly about her work on human rights at the State Department. And at the celebration of her life, her coworkers talked about all of her amazing accomplishments. (She seemingly had my dream job - though for me it is just a dream and not something I actually work towards nor am even near qualified for. For her it was a dream job and she lived it and was amazing at it.)
What I take away from this is that while she died young and leaves behind a loving husband and young daughter, she can take solace in the life she lived and what she accomplished; she has done so much for human rights around the world.
At Maxwell, we were taught the Athenian Oath, which ends as follows:
We will transmit this city not only not less, but greater, better and more beautiful than it was transmitted to us.This means, at its most simple, to make sure that when we leave, that we have improved the world around us. My friend did this. And she did so much so soon, that even at the young age of 34 she can say she delivered the city much, much greater.
You might guess that there is political commentary coming. And you are right. I want to be able to say the same thing when I leave. And that is what I don't understand about conservatism. At it's base, it is about smaller government - less taxes and less services. Most often this means less services for those in need. And whether intentional or not, it often means under-producing other beneficial public goods like education and infrastructure.
The point is that I just can't imagine being satisfied with a life that is spent not improving the world, not trying to make things better, and not trying to help people. Without that, what is your legacy? We are only here for a brief time, and so we should be making sure we are improving the world while we are here. And that is why I am a Democrat.
I can only hope to come close to the example my friend left for us.
Friday, September 09, 2011
Why Not Monetary Policy
I wonder if we (liberals) made a bad decision not to focus more on monetary policy solutions to our unemployment problems. I have taken a lot of my cues from Paul Krugman, and while he acknowledged that there were things the fed could do, he seemed to calling more strongly for fiscal stimulus.
There was a speech by the head of the Chicago Federal Reserve calling for greater fed action. His logic is simple and clear: the fed has a dual mandate - to maintain optimal levels of inflation and unemployment. We can say that the optimal levels are probably 2 percent for inflation and 6 percent for unemployment (a conservative estimate for full employment).
With unemployment 3 points higher than optimal, the fed should be doing way more. In fact, it should be willing to accept 3 percent inflation if it means bringing unemployment down to say 7 percent. And the Fed signaling their willingness to tolerate higher inflation is one of the non-standard tools Krugman said was possible to help bring down unemployment.
I - and many liberal economics commentators - love the speech. But I really think we should have been pushing for this much harder already. Fiscal stimulus was a non-starter. Obama couldn't achieve it. I believe he should have called for it and made Republicans look bad. But he couldn't get it. But he could have gotten more action from the Fed.
And he could have turned it into a great argument with Republicans. Imagine them fighting against monetary policy - so extreme they oppose Milton Freedman. And we could have had a debate about which is more important, inflation or unemployment? Republicans favor bankers, Democrats favor the unemployed.
In this case, all he had to do was convince the Fed that he was right - not ideologically extreme Republicans. And I think he could have won the debate as well.
But it's not too late (though Obama didn't mention it in his jobs speech). We need to push this front. Obama's jobs initiatives will be helpful (depending on how much is passed). But this could do a lot and sooner. And with less budget implications.
There was a speech by the head of the Chicago Federal Reserve calling for greater fed action. His logic is simple and clear: the fed has a dual mandate - to maintain optimal levels of inflation and unemployment. We can say that the optimal levels are probably 2 percent for inflation and 6 percent for unemployment (a conservative estimate for full employment).
With unemployment 3 points higher than optimal, the fed should be doing way more. In fact, it should be willing to accept 3 percent inflation if it means bringing unemployment down to say 7 percent. And the Fed signaling their willingness to tolerate higher inflation is one of the non-standard tools Krugman said was possible to help bring down unemployment.
I - and many liberal economics commentators - love the speech. But I really think we should have been pushing for this much harder already. Fiscal stimulus was a non-starter. Obama couldn't achieve it. I believe he should have called for it and made Republicans look bad. But he couldn't get it. But he could have gotten more action from the Fed.
And he could have turned it into a great argument with Republicans. Imagine them fighting against monetary policy - so extreme they oppose Milton Freedman. And we could have had a debate about which is more important, inflation or unemployment? Republicans favor bankers, Democrats favor the unemployed.
In this case, all he had to do was convince the Fed that he was right - not ideologically extreme Republicans. And I think he could have won the debate as well.
But it's not too late (though Obama didn't mention it in his jobs speech). We need to push this front. Obama's jobs initiatives will be helpful (depending on how much is passed). But this could do a lot and sooner. And with less budget implications.
Failed Stimulus
I don't think this analysis of the stimulus is too off-base. Basically, the stimulus was poorly targeted. That is what happens when Congress gets to pass a stimulus. They see it as an opportunity to fund things they like, not necessarily things that will do the most for the economy.
I get that. I do. But I still think that a less-effective stimulus is better than no stimulus at all. It helped, but was too small and poorly targeted. And that is one reason we are where we are.
On a side note, I think they are unfair to Krugman. If I am not mistaken, I think he acknowledged that the stimulus was poorly targeted.
I get that. I do. But I still think that a less-effective stimulus is better than no stimulus at all. It helped, but was too small and poorly targeted. And that is one reason we are where we are.
On a side note, I think they are unfair to Krugman. If I am not mistaken, I think he acknowledged that the stimulus was poorly targeted.
Clean Air - Later
Last week, Obama announced he wouldn't allow the EPA to change the clean air regulations to toughen the ground level ozone standards. At some level, I get it. During a recession - or in this case a very weak recovery - government is reluctant to increase the costs on companies. Even in a situation when it seems companies don't lack money, they lack sales and any reason to hire and expand (ie demand is depressed).
But the way Obama did it seemed poor political strategy. What he should have said was, "Considering the state of our economy, I am being risk averse. I don't want to do anything that might add costs. But I want to be clear, we are not facing 9 percent unemployment because of regulations. And changing regulations won't get us out of the recession."
He should have used it as an opportunity to pick a fight with Republicans. Instead, once again he changed a policy and adopted Republican talking points. It made him look weak and unprincipled. And it made it look like Republicans are right about regulations.
But the way Obama did it seemed poor political strategy. What he should have said was, "Considering the state of our economy, I am being risk averse. I don't want to do anything that might add costs. But I want to be clear, we are not facing 9 percent unemployment because of regulations. And changing regulations won't get us out of the recession."
He should have used it as an opportunity to pick a fight with Republicans. Instead, once again he changed a policy and adopted Republican talking points. It made him look weak and unprincipled. And it made it look like Republicans are right about regulations.
Intelligence in Politics
I am sure I have written about this in the past, I want to add some new thoughts. With Michelle Bachman and Rick Perry in the running for the Republican presidential nomination, there is talk again about whether those two are smart enough to be president. Republicans often bristle at this and I think often misunderstand what is meant.
First, let me say that I agree that a president needs to be smart as a minimum qualification. But that isn't at all based on education. And the best way to illustrate this is to look at some examples. George W. Bush was educated at private high school and ivy league undergrad and business school (Exeter, Yale, and Harvard, respectively). But I would not consider him smart and often felt that he wasn't up to the job intelligence-wise.
Compare that to someone like Karl Rove, whom I do not like at all, but I would consider pretty smart. But Rove does not have a college degree. As you can see, that doesn't matter to me in terms of assessing his intelligence.
Much was made of Sarah Palin's peripatetic college history. Someone with her history could still be very smart. However it was used as another piece of evidence of her lack of intelligence - something people could tell based on how she answered questions.
The point is that many Republicans are very smart: John McCain (last in his class at Naval Academy but I don't hold that against him), John Boehner, New Gingrich (though he is accused of having an undisciplined mind), Mitt Romney, Mike Huckabee, John Huntsman, Tim Pawlenty, Bobby Jindal, Mitch McConnell. The problem many liberals have is with the few that squeak by that don't seem to be very smart. George W. Bush, Rick Perry (maybe less so), Michelle Bachmann, and Sarah Palin are the ones that come to mind that I would consider not up to the task.
To be clear, intelligence should be necessary, but not sufficient. John Kerry went to Harvard and is very smart. But I would say he might not have made the best president. And as smart as Obama is, he is not doing as well as many had hoped.
One last thing: I am realizing how Sarah Palin has set the bar lower in terms of intelligence. With her at one point considered a very strong contender for the nomination had she entered, I think we witnessed a new low (even Ann Coulter seems to admit that Palin isn't smart enough). And since she hasn't run, I feel so relived and am now more inclined to view Bachmann, Perry, and even Bush as smart enough since they are smarter than Palin. I don't think that is a good thing.
First, let me say that I agree that a president needs to be smart as a minimum qualification. But that isn't at all based on education. And the best way to illustrate this is to look at some examples. George W. Bush was educated at private high school and ivy league undergrad and business school (Exeter, Yale, and Harvard, respectively). But I would not consider him smart and often felt that he wasn't up to the job intelligence-wise.
Compare that to someone like Karl Rove, whom I do not like at all, but I would consider pretty smart. But Rove does not have a college degree. As you can see, that doesn't matter to me in terms of assessing his intelligence.
Much was made of Sarah Palin's peripatetic college history. Someone with her history could still be very smart. However it was used as another piece of evidence of her lack of intelligence - something people could tell based on how she answered questions.
The point is that many Republicans are very smart: John McCain (last in his class at Naval Academy but I don't hold that against him), John Boehner, New Gingrich (though he is accused of having an undisciplined mind), Mitt Romney, Mike Huckabee, John Huntsman, Tim Pawlenty, Bobby Jindal, Mitch McConnell. The problem many liberals have is with the few that squeak by that don't seem to be very smart. George W. Bush, Rick Perry (maybe less so), Michelle Bachmann, and Sarah Palin are the ones that come to mind that I would consider not up to the task.
To be clear, intelligence should be necessary, but not sufficient. John Kerry went to Harvard and is very smart. But I would say he might not have made the best president. And as smart as Obama is, he is not doing as well as many had hoped.
One last thing: I am realizing how Sarah Palin has set the bar lower in terms of intelligence. With her at one point considered a very strong contender for the nomination had she entered, I think we witnessed a new low (even Ann Coulter seems to admit that Palin isn't smart enough). And since she hasn't run, I feel so relived and am now more inclined to view Bachmann, Perry, and even Bush as smart enough since they are smarter than Palin. I don't think that is a good thing.
On Compromise and Obama
This is the second of two related pieces on Obama. The first talked about Obama's decision to be a moderate. This one will talk about Obama's belief in compromise above all else.
First, let me state clearly that I don't mind compromise. In fact, I think it is often necessary for anything to happen and for us as a society to progress.
It seems that the president has decided that voters want compromise. But he thinks that he has to start out by showing how willing he is to compromise. In other words, if he says the word compromise early enough and often enough, voters will see that he is the reasonable one and the Republicans the crazy ones.
But I don't think voters care when you say compromise, as long as you do compromise. In fact, in every situation, Obama has shown signs of good faith and not been rewarded by voters or his adversaries in the Republican party. He put forward a stimulus with significant tax cuts instead of making them demand it (and received 3 Republican votes for his troubles). He put forward a health care bill modeled on Romney's plan in Massachusetts instead of something more liberal (and received not votes). And his positioning on the debt limit has been nothing other than bending over backwards to show his willingness to compromise.
In none of these cases have voters shown signs of approving of his signs of good faith. And it certainly hasn't helped his negotiating position.
What he should do is start from a position of strength, and let the deal in the end be the sign of his willingness to compromise. And this would benefit liberal positions as well because he could spend time defending liberal ideals and then reach a compromise that has more of what he wants.
The bottom line is this: I and most voters want leaders to compromise, but we expect them to at least defend their position first.
First, let me state clearly that I don't mind compromise. In fact, I think it is often necessary for anything to happen and for us as a society to progress.
It seems that the president has decided that voters want compromise. But he thinks that he has to start out by showing how willing he is to compromise. In other words, if he says the word compromise early enough and often enough, voters will see that he is the reasonable one and the Republicans the crazy ones.
But I don't think voters care when you say compromise, as long as you do compromise. In fact, in every situation, Obama has shown signs of good faith and not been rewarded by voters or his adversaries in the Republican party. He put forward a stimulus with significant tax cuts instead of making them demand it (and received 3 Republican votes for his troubles). He put forward a health care bill modeled on Romney's plan in Massachusetts instead of something more liberal (and received not votes). And his positioning on the debt limit has been nothing other than bending over backwards to show his willingness to compromise.
In none of these cases have voters shown signs of approving of his signs of good faith. And it certainly hasn't helped his negotiating position.
What he should do is start from a position of strength, and let the deal in the end be the sign of his willingness to compromise. And this would benefit liberal positions as well because he could spend time defending liberal ideals and then reach a compromise that has more of what he wants.
The bottom line is this: I and most voters want leaders to compromise, but we expect them to at least defend their position first.
On Moderation and Obama
I respect the idea of moderation and centrism. The answer is sometimes in the middle. And moderates can do good to blunt the edges of the extremes on each side. But if you are going to be a moderate, you need to own it; in other words, it needs to come from core beliefs and not smell of political opportunism.
I can think of two examples of moderates that own it. David Brooks is a good example. He is a moderate conservative. Overall he believes in limited but energetic government. He is sometimes skeptical of government programs and thinks communities are better at solving problems. But he does believe government should do things like spend money on education and infrastructure.
Mitt Romney is another example - at least the Mitt Romney before he developed presidential aspirations. That Mitt Romney wants less taxes on businesses and fewer regulations. But he isn't opposed to new health care programs or social security. And he doesn't disbelieve science like global warming or evolution. That the current Mitt Romney no longer stands by those positions helps prove my point. By going more extreme, people don't believe he is genuine.
President Obama does not own his moderation. His previous positions sometimes show that he doesn't come by it naturally. And other times he shows it by trying to have it both ways.
Let's look at some examples for Obama. On same sex marriage, Obama has staked out an absurd position. He tries to support New York's law allowing same sex marriage, but he does this by nodding to states' rights. He also says that he personally supports civil union but that his position is evolving. So he is staking out a position in the middle - civil unions - but also winking to the left saying he really agrees with them.
As as a senator, Obama was a leading critic of the Bush administration on foreign policy. Yet as president, he has barely changed anything but the most extreme. He has ended the use of torture, but won't close Guantanamo Bay and uses drone attacks with reckless abandon. He even argued for war while receiving the Nobel Peace Prize. And his policy towards Israel has only barely changed compared to Bush. All of this lack of change has left the Muslim world liking him no more than Bush.
And most recently, he has committed to shrinking the budget. He uses language like, "Government needs to live within its means," but also says government needs to take care of its people. It's as if he wants to defend government spending.
Some see this as trying to be all things to all people. I see it as someone that believes in liberal values, but doesn't trust the voters to support him if he stands up for those things. He thinks voters want him to be moderate. But voters can tell when you aren't being yourself.
I can think of two examples of moderates that own it. David Brooks is a good example. He is a moderate conservative. Overall he believes in limited but energetic government. He is sometimes skeptical of government programs and thinks communities are better at solving problems. But he does believe government should do things like spend money on education and infrastructure.
Mitt Romney is another example - at least the Mitt Romney before he developed presidential aspirations. That Mitt Romney wants less taxes on businesses and fewer regulations. But he isn't opposed to new health care programs or social security. And he doesn't disbelieve science like global warming or evolution. That the current Mitt Romney no longer stands by those positions helps prove my point. By going more extreme, people don't believe he is genuine.
President Obama does not own his moderation. His previous positions sometimes show that he doesn't come by it naturally. And other times he shows it by trying to have it both ways.
Let's look at some examples for Obama. On same sex marriage, Obama has staked out an absurd position. He tries to support New York's law allowing same sex marriage, but he does this by nodding to states' rights. He also says that he personally supports civil union but that his position is evolving. So he is staking out a position in the middle - civil unions - but also winking to the left saying he really agrees with them.
As as a senator, Obama was a leading critic of the Bush administration on foreign policy. Yet as president, he has barely changed anything but the most extreme. He has ended the use of torture, but won't close Guantanamo Bay and uses drone attacks with reckless abandon. He even argued for war while receiving the Nobel Peace Prize. And his policy towards Israel has only barely changed compared to Bush. All of this lack of change has left the Muslim world liking him no more than Bush.
And most recently, he has committed to shrinking the budget. He uses language like, "Government needs to live within its means," but also says government needs to take care of its people. It's as if he wants to defend government spending.
Some see this as trying to be all things to all people. I see it as someone that believes in liberal values, but doesn't trust the voters to support him if he stands up for those things. He thinks voters want him to be moderate. But voters can tell when you aren't being yourself.
Wednesday, August 31, 2011
Republican Primary Prediction
Rick Perry's entrance to the field has shaken things up a bit. He is now in front in most polls. This has shaken up my prediction a bit.
Before Perry joined the race, I was convinced Romney would win the nomination and then beat Obama. After all, with the economy as bad as it is, and Obama unable to blame Republicans for it because he has gotten everything he asked for, I was convinced voters would not give him another 4 years.
I am now unsure who will win the nomination. Part of me thinks that Perry will win - he is conservative enough to please the base but he isn't too crazy to completely scare the establishment. The big question will be whether he can hold it together.
This matters for the primary and the general. I think if Perry wins the nomination, he might be able to beat Obama. But he might also implode. Comments like the following might turn off moderates:
But I hope and mostly believe that it also scares away moderate voters. It even seems to scare Peggy Noonan.
So my new prediction is this. I think Romney will still win the nomination, although I am much less sure of that. If he wins, he'll be our next president. If he loses to Perry, Obama has more of a chance. But there is also a good chance that Perry's staff could reign him in a bit. In which case, he may be our next president.
I will say that as much as Bush was a disaster for the world, his domestic policy wasn't terrible. I very much fear domestic policy under a president Perry.
One more quick note, I just wanted to include this quote from Peggy Noonan's piece:
Before Perry joined the race, I was convinced Romney would win the nomination and then beat Obama. After all, with the economy as bad as it is, and Obama unable to blame Republicans for it because he has gotten everything he asked for, I was convinced voters would not give him another 4 years.
I am now unsure who will win the nomination. Part of me thinks that Perry will win - he is conservative enough to please the base but he isn't too crazy to completely scare the establishment. The big question will be whether he can hold it together.
This matters for the primary and the general. I think if Perry wins the nomination, he might be able to beat Obama. But he might also implode. Comments like the following might turn off moderates:
If this guy prints more money between now and the election, I dunno what y'all would do to him in Iowa, but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treasonous in my opinion.He is referring to Ben Bernake. Now that comment enrages me - Perry is trying to scare Bernake away from improving the economy because that would help Obama. Of course we know this is what the Republican party wants - they want the economy to stay bad so they can win the election. But to see it out there so flagrantly is appalling.
But I hope and mostly believe that it also scares away moderate voters. It even seems to scare Peggy Noonan.
So my new prediction is this. I think Romney will still win the nomination, although I am much less sure of that. If he wins, he'll be our next president. If he loses to Perry, Obama has more of a chance. But there is also a good chance that Perry's staff could reign him in a bit. In which case, he may be our next president.
I will say that as much as Bush was a disaster for the world, his domestic policy wasn't terrible. I very much fear domestic policy under a president Perry.
One more quick note, I just wanted to include this quote from Peggy Noonan's piece:
And the nation is roiling and restive. After Mr. Obama was elected, the right became angry, feisty, and created a new and needed party, the tea party. The right was on fire. The next time a Republican wins, and that could be next year, it will be the left that shows real anger, with unemployment high and no jobs available and government spending and services likely to be cut. The left will be on fire. The only thing leashing them now is the fact of Mr. Obama.I don't agree that Obama is leashing the left, but I do agree that the left is very close to being on fire. And I think that both parties are overreaching and believing too much in their "mandates". Maybe the left went too far with health care reform - we certainly didn't sell it very well. But if the right really enacts massive program cuts, I am sure they will face a backlash. Because the public does not want that. As much as they want less taxes and more freedom, they still like their services.
Cheney's Blame Tour
I know I have already commented on torture, but I just want to make my point again now that former VP Dick Cheney is on his book tour. The former VP is again insisting that torture works, therefore we should use it. According to that logic we should use it against regular criminals as well. But we don't and for a reason.
We decided long ago that we, as a society, are not willing to torture. Other societies - North Korea, Egypt under Mubarak, Iraq under Saddam, Iran - do use torture. But we are better than them. We follow the rule of law. And we recognize that accused criminals have the right to be treated decently and to refuse to cooperate.
What it boils down to is that it matters not whether torture works (though that is very much up for debate). What matters is that we are not willing to do it.
We decided long ago that we, as a society, are not willing to torture. Other societies - North Korea, Egypt under Mubarak, Iraq under Saddam, Iran - do use torture. But we are better than them. We follow the rule of law. And we recognize that accused criminals have the right to be treated decently and to refuse to cooperate.
What it boils down to is that it matters not whether torture works (though that is very much up for debate). What matters is that we are not willing to do it.
Monday, August 29, 2011
Where Are They Now?
You'll have to bear with me. There is a lot to analyze with the whole debt limit situation, so I have a lot to write. I think the bipartisan commission is an important component. I want to start with a quote from a NY Times article.
It just doesn't make any sense and suggests he didn't think it through all the way. If you are going to call a bipartisan commission, you do so because you are going to support what they put forward. If he really thought it, he should have put forward his own plan - to the left - then let Republicans put out their plan (which they did in the Paul Ryan plan), then called for a bipartisan commission to bridge the gap.
I just can't get past the thought that Obama is in way over his head.
And this isn't small potatoes. We are in a situation now where we have a bad short term solution to a long term problem. And I think we have no hope of getting to the middle ground of the bipartisan commission now. There will be no compromise.
In his budget proposal in January, Mr. Obama declined to suggest a plan along the lines proposed by a majority of his bipartisan fiscal commission, which in December recommended $4 trillion in savings over 10 years through cuts in military and domestic programs, including Medicare and Medicaid, and a tax code overhaul to lower rates while also raising more revenue.I understand his sentiment, but then why did he suggest a bipartisan commission? He should have known it would have put in the middle - where he wanted to end up, not where he wanted to start.
Even though Mr. Obama was widely criticized, administration officials said at the time that to have embraced that approach then would have put him too far to the right — where he ultimately wanted to end up in any compromise with Republicans, not where he wanted to start.
It just doesn't make any sense and suggests he didn't think it through all the way. If you are going to call a bipartisan commission, you do so because you are going to support what they put forward. If he really thought it, he should have put forward his own plan - to the left - then let Republicans put out their plan (which they did in the Paul Ryan plan), then called for a bipartisan commission to bridge the gap.
I just can't get past the thought that Obama is in way over his head.
And this isn't small potatoes. We are in a situation now where we have a bad short term solution to a long term problem. And I think we have no hope of getting to the middle ground of the bipartisan commission now. There will be no compromise.
Where's the Debate
As I continue to contemplate where we are as a country right now, one of the most frustrating things is the lack of real debate going one between our politicians. Or maybe just from our president.
As you know, this blog is called Lunchroom Debate and is meant to spark debate. Unfortunately, not many friends and family have the time to engage on this blog, and I understand that. But I have created this blog because I think honest, intelligent debate is necessary in a democracy. You have to put yourself out there - be willing to say what you think. And you also have to be open minded and willing to learn new things and think in new ways.
But it seems that our president is too scared to really debate. After health care turned out to be unpopular he refused to defend it. After the Democrats lost big in the midterm elections, he backed away from liberal positions.
Now he is stuck on trying to convince the country that we need to find unity. I completely disagree. There are major disagreements over major issues. We need to disagree. And I think we need to be disagreeable sometimes.
What has really bothered me lately is that the only people willing to stand up for their positions are the crazies. The smart ones seem to be trying to keep their heads down. Ron Paul isn't afraid to say we should be on the gold standard - something I don't think Milton Freedman would even agree with. But Barack Obama won't stand up and call for more government action in the face of 9 percent unemploytment.
And Rick Perry is willing to say that if Ben Bernake tries to use more monetary policy to help the economy, people in Texas will treat him unkindly - a mildly threatening phrase. But Ben Bernake will only meekly call for fiscal policy solutions and be totally opaque when it comes to his monetary policies.
We don't have a debate right now. We have crazies saying whatever they please while smart and responsible people are lying low. It is truly depressing.
As you know, this blog is called Lunchroom Debate and is meant to spark debate. Unfortunately, not many friends and family have the time to engage on this blog, and I understand that. But I have created this blog because I think honest, intelligent debate is necessary in a democracy. You have to put yourself out there - be willing to say what you think. And you also have to be open minded and willing to learn new things and think in new ways.
But it seems that our president is too scared to really debate. After health care turned out to be unpopular he refused to defend it. After the Democrats lost big in the midterm elections, he backed away from liberal positions.
Now he is stuck on trying to convince the country that we need to find unity. I completely disagree. There are major disagreements over major issues. We need to disagree. And I think we need to be disagreeable sometimes.
What has really bothered me lately is that the only people willing to stand up for their positions are the crazies. The smart ones seem to be trying to keep their heads down. Ron Paul isn't afraid to say we should be on the gold standard - something I don't think Milton Freedman would even agree with. But Barack Obama won't stand up and call for more government action in the face of 9 percent unemploytment.
And Rick Perry is willing to say that if Ben Bernake tries to use more monetary policy to help the economy, people in Texas will treat him unkindly - a mildly threatening phrase. But Ben Bernake will only meekly call for fiscal policy solutions and be totally opaque when it comes to his monetary policies.
We don't have a debate right now. We have crazies saying whatever they please while smart and responsible people are lying low. It is truly depressing.
Sunday, August 07, 2011
New Thoughts on S&P Downgrade
I might be having some second thoughts about the downgrade - both the fiscal and political arguments. Politically, I think I was too blase about what this debt limit fight signified. The truth is that it is more likely that future Congresses are more likely to threaten default for political purposes (I do hate all the stupid and over-heated rhetoric like terrorists and hostage-takers, etc). And maybe it is responsible for S&P to make it clear that showing a willingness to risk default will lead to downgrades. Not a bad lesson for everyone to learn.
As for the fiscal reasons, I am now undecided. Felix Salmon argues that the fiscal argument should be ignored; the downgrade was the right decision and the fiscal argument is just there to provide some cover for what is inherently a political statement.
I disagree; I think since they made the fiscal argument, we need to analyze it. And on the fiscal argument, I am now torn. I don't agree that we have a short- or medium-term problem. And saying so only allows Republicans to point to that to suggest they were right to be so obstinate and dangerous with the debt ceiling in order to get deeper cuts.
However, if we avoid terms like medium-term and long-term, and try to simplify it further, I might agree with their point. I might agree if they are saying: that current budget deficits are not a problem, but future projected deficits are; that the recent budget deal shows that we are not serious about our long-term problems because it only cut discretionary spending, which can be easily reversed in the future, when the real problem is with entitlements and revenue.
But even if that is what they are saying, does that mean we need a downgrade now? If the problem is down the road but we aren't willing to deal with it now, is that worrisome enough for a downgrade? That I still don't know. I agree that we have problems down the road. And I agree that we should be able to deal with that right now but we aren't. But since it is so far down the road, I question whether it really means we need a downgrade now.
Anyway, to conclude, I think the recent developments - a willingness by some to default on our debt and an inability to actually deal with long term problems - are troubling. But I am still trying to decide if the later issue - inability to deal with problems down the road - is urgent enough to support a downgrade.
Also, while I am still trying to decide if I agree with the decision, I don't actually have a plausible reason for why S&P did it, except that they believe it. They don't have a lot of credibility in my book. However, I have to admit that their mistakes in the past seemed to be related to a conflict of interest, which doesn't seem to exist here. There doesn't seem to be a lot of upside for making a bad decision. So the only reason I can see is lack of judgment - which I certainly won't rule out.
As for the fiscal reasons, I am now undecided. Felix Salmon argues that the fiscal argument should be ignored; the downgrade was the right decision and the fiscal argument is just there to provide some cover for what is inherently a political statement.
I disagree; I think since they made the fiscal argument, we need to analyze it. And on the fiscal argument, I am now torn. I don't agree that we have a short- or medium-term problem. And saying so only allows Republicans to point to that to suggest they were right to be so obstinate and dangerous with the debt ceiling in order to get deeper cuts.
However, if we avoid terms like medium-term and long-term, and try to simplify it further, I might agree with their point. I might agree if they are saying: that current budget deficits are not a problem, but future projected deficits are; that the recent budget deal shows that we are not serious about our long-term problems because it only cut discretionary spending, which can be easily reversed in the future, when the real problem is with entitlements and revenue.
But even if that is what they are saying, does that mean we need a downgrade now? If the problem is down the road but we aren't willing to deal with it now, is that worrisome enough for a downgrade? That I still don't know. I agree that we have problems down the road. And I agree that we should be able to deal with that right now but we aren't. But since it is so far down the road, I question whether it really means we need a downgrade now.
Anyway, to conclude, I think the recent developments - a willingness by some to default on our debt and an inability to actually deal with long term problems - are troubling. But I am still trying to decide if the later issue - inability to deal with problems down the road - is urgent enough to support a downgrade.
Also, while I am still trying to decide if I agree with the decision, I don't actually have a plausible reason for why S&P did it, except that they believe it. They don't have a lot of credibility in my book. However, I have to admit that their mistakes in the past seemed to be related to a conflict of interest, which doesn't seem to exist here. There doesn't seem to be a lot of upside for making a bad decision. So the only reason I can see is lack of judgment - which I certainly won't rule out.
Saturday, August 06, 2011
S&P Downgrade - Onions Have Layers, Ogres Have Layers
So S&P downgraded US debt. Let me first say that I don't think the downgrade is justified or wise. Their reasons are both political and fiscal - neither of which fully support downgrade in my opinion - even taken together.
They say that the debt limit deal is not enough to give them confidence in the US medium-term debt situation - in other words, they wanted deeper budget cuts. But I haven't seen anyone except uninformed politicians suggest that we have a short- or even medium-term debt problem - in other words our current debt as a percent of GDP - or projected debt in the medium term - is not a risk (France and UK have higher levels and are still AAA). The concerns lie in the long term. And if you want evidence of this, look at interest rates on our government bonds.
Also, I don't think anyone believes that S&P would have downgraded if this debt limit nonsense had not happened. In other words, it isn't really about fiscal policy at all, but they can't justify using politics alone so they cooked up some fiscal nonsense.
As for the politics, I agree that it is deeply troubling that we were on the brink of defaulting on our debt (all because of an arbitrary debt ceiling where Congress has to approve spending it has already approved). And we were on the brink due to politics; Republicans wanted big spending cuts, and chose to extract them by showing a willingness to default on our debt. I think everyone agrees that was terribly irresponsible.
However, I don't think the troubling nature of what happened is as bad as they make it out to be. We didn't default on our debt and the debt ceiling won't be up again until 2013. And for all we know, future Congresses might raise the debt ceiling as a matter of course, like previous Congresses did over 100 times.
As for how this plays out politically, by using both fiscal and political reasons, S&P seems to be trying to pass the blame around - ie the budget cuts were not enough and Republicans were crazy. And both parties will blame the other (as they also go on the attack against S&P). And voters will continue to blame both parties for this, but probably the Republicans in Congress a little more. (Even Meghan McArdle at the Atlantic - a serious conservative - blames the GOP Congress.)
In theory, it should also completely ruin Michele Bachmann's campaign. She all along opposed raising the debt ceiling and seemed to think default is no big deal. (She was the most outspoken, but to be honest, I don't know what the other candidates said.) Unfortunately, I'm not sure it will. I think Bachmann's base will agree with her no matter the evidence.
While voters will blame Obama, I don't completely blame him for the downgrade. All along I have been critical of him because he has not lived up to what I want in Democratic president and who I thought I was electing. But I should make it clear that Republicans deserve most of the blame for where we are. Sure, Obama didn't have to let himself get dragged into this debate, or at least he didn't have to let Republicans dictate the terms, but he wasn't driving it.
I also think (and hope) that this is going to play out badly for S&P. They already have a significant credibility problem because of their role in the financial crisis and all the junk bonds they rated AAA. In fact, Noam Scheiber had this funny tweet, "What if we bundled bonds from our 10 dodgiest states, sliced them up, re-packaged them w/other dodgy slices. Could we keep AAA rating then?" Their decision to downgrade is far from a slam dunk and as I said I think both parties will go on the attack. And the fact that they had a $2 trillion math error isn't going to help. The bottom line, this was a risky decision and they don't have the credibility or trust to back it up.
What remains to be seen, and is probably the most important part of S&P's decision is how it plays out. Will other rating agencies follow suit, or will they leave S&P hanging? And will the markets react at all? I hear that federal debt should be fine because most investors know that the fundamentals are fine. However, state and local governments may see increased borrowing costs.
If that happens, we have to wonder whether it was necessary. I obviously say no. This was clearly a political statement by S&P not an objective decision based on the numbers. So now we might have higher costs just so S&P could join the fray. Are there no adults in this debate?
They say that the debt limit deal is not enough to give them confidence in the US medium-term debt situation - in other words, they wanted deeper budget cuts. But I haven't seen anyone except uninformed politicians suggest that we have a short- or even medium-term debt problem - in other words our current debt as a percent of GDP - or projected debt in the medium term - is not a risk (France and UK have higher levels and are still AAA). The concerns lie in the long term. And if you want evidence of this, look at interest rates on our government bonds.
Also, I don't think anyone believes that S&P would have downgraded if this debt limit nonsense had not happened. In other words, it isn't really about fiscal policy at all, but they can't justify using politics alone so they cooked up some fiscal nonsense.
As for the politics, I agree that it is deeply troubling that we were on the brink of defaulting on our debt (all because of an arbitrary debt ceiling where Congress has to approve spending it has already approved). And we were on the brink due to politics; Republicans wanted big spending cuts, and chose to extract them by showing a willingness to default on our debt. I think everyone agrees that was terribly irresponsible.
However, I don't think the troubling nature of what happened is as bad as they make it out to be. We didn't default on our debt and the debt ceiling won't be up again until 2013. And for all we know, future Congresses might raise the debt ceiling as a matter of course, like previous Congresses did over 100 times.
As for how this plays out politically, by using both fiscal and political reasons, S&P seems to be trying to pass the blame around - ie the budget cuts were not enough and Republicans were crazy. And both parties will blame the other (as they also go on the attack against S&P). And voters will continue to blame both parties for this, but probably the Republicans in Congress a little more. (Even Meghan McArdle at the Atlantic - a serious conservative - blames the GOP Congress.)
In theory, it should also completely ruin Michele Bachmann's campaign. She all along opposed raising the debt ceiling and seemed to think default is no big deal. (She was the most outspoken, but to be honest, I don't know what the other candidates said.) Unfortunately, I'm not sure it will. I think Bachmann's base will agree with her no matter the evidence.
While voters will blame Obama, I don't completely blame him for the downgrade. All along I have been critical of him because he has not lived up to what I want in Democratic president and who I thought I was electing. But I should make it clear that Republicans deserve most of the blame for where we are. Sure, Obama didn't have to let himself get dragged into this debate, or at least he didn't have to let Republicans dictate the terms, but he wasn't driving it.
I also think (and hope) that this is going to play out badly for S&P. They already have a significant credibility problem because of their role in the financial crisis and all the junk bonds they rated AAA. In fact, Noam Scheiber had this funny tweet, "What if we bundled bonds from our 10 dodgiest states, sliced them up, re-packaged them w/other dodgy slices. Could we keep AAA rating then?" Their decision to downgrade is far from a slam dunk and as I said I think both parties will go on the attack. And the fact that they had a $2 trillion math error isn't going to help. The bottom line, this was a risky decision and they don't have the credibility or trust to back it up.
What remains to be seen, and is probably the most important part of S&P's decision is how it plays out. Will other rating agencies follow suit, or will they leave S&P hanging? And will the markets react at all? I hear that federal debt should be fine because most investors know that the fundamentals are fine. However, state and local governments may see increased borrowing costs.
If that happens, we have to wonder whether it was necessary. I obviously say no. This was clearly a political statement by S&P not an objective decision based on the numbers. So now we might have higher costs just so S&P could join the fray. Are there no adults in this debate?
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