The catfood chronicles

Yves Smith:

There is no more pretense possible. As we’ve warned for some time, Obama is eager to put a notch on his belt by being the President that rolled back the New Deal programs that helped create broad-based middle-class prosperity and dignity. He’s cast himself as an adult inflicting discipline on profligate Americans. But in reality, the profligacy was most concentrated among elite financiers who used leverage on leverage vehicles to stoke liquidity that led to worldwide underpricing of risk. They paid themselves record bonuses in the years immediately preceding the crisis, and then in a grotesque display of ingratitude, did so again in 2009, able to do so only thanks to massive taxpayer support, alphabet-soup special borrowing programs, and the tax on savers known as ZIRP. And the direct result of their looting exercise that produced the crisis was the explosion in government deficits, due to a collapse in tax revenues and a rise in payments under countercyclical programs such as unemployment insurance and food stamps.


I agreed with Duncan two years ago:

The point of “grand bargains” between the parties isn’t to get something done, the point is to get something done in a way which leaves no one for voters to blame. It’s accountability free legislating. Villagers love this, because they hate this whole voting thing and just want Bob Kerrey and Alan Greenspan to rule by fiat in order to make the poor and middle class suffer as much as possible without any resistance, but it means the rest of us are out of luck.

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