Look, like pretty much everyone else, I’ve been wrong about a few things in the debate about the platinum coin, but I was right on the main things. The White House, the Treasury Department, and the Federal Reserve have determined that it would not be legal. Look at the Treasury spokesman’s, statement below (emphasis mine):
“There are only two options to deal with the debt limit: Congress can pay its bills or they can fail to act and put the nation into default,” said Press Secretary Jay Carney. “When Congressional Republicans played politics with this issue last time putting us at the edge of default, it was a blow to our economic recovery, causing our nation to be downgraded. The President and the American people won’t tolerate Congressional Republicans holding the American economy hostage again simply so they can force disastrous cuts to Medicare and other programs the middle class depend on while protecting the wealthy. Congress needs to do its job.”
If there were any lingering doubts about how the Obama administration will handle the debt-ceiling issue, Saturday’s pronouncements put them to rest. Moments before Carney offered his statement, Treasury spokesman Anthony Coley offered one of his own, declaring that “neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit.“
Perhaps more importantly, I realized early on that the debate over the coin was working against us. The Republicans desperately want to avoid a complete cave-in on the debt ceiling, and the coin was giving them false hope that they could default and be bailed out by one of the most counterintuitive and difficult-to-defend stunts in the history of mankind.
They have already telegraphed that they have no stomach for another downgrade in our credit rating, but they would have loved to see our credit rating downgraded in the aftermath of the coin gambit. That way, they could shift all the attention onto the administration and their dictatorial power grab.
We were playing with fire when we created this escape hatch. The only way to get the Republicans to give up this hostage taking is to refuse to negotiate with them and have them conclude that the tactic isn’t tenable. Anything that interfered with that process, was counterproductive.
Now, some people had different purposes. The $60 trillion coin guy just wanted nice things for everybody. Others wanted to teach people lessons about fiat currency and undermine the Republicans’ fearmongerng about the national debt. Still others wanted to just coin enough money that we wouldn’t have to make any concessions about anything.
That was never the point. The point wasn’t to rejigger the whole economy and balance of powers to give ourselves a bunch of free money. The point was to get the Republicans to shut up and raise the debt ceiling. From that point of view, the Platinum Coin debate did the opposite of what it was supposed to do.
For the first time on this issue you’re talking sense. If you want a good political argument against the coin, read Billmon. I kind of suspected you were shilling for the White House on this one, but you are on much surer ground when you argue against the politics of the coin than when you try to argue the legalities. The White House has decided that the Coin option would turn a Republican crisis into a Democratic one. Fair enough. Probably a good call. It’s not legal if they don’t want it to be legal.
The economics of it all are still crap, but then Rome wasn’t built in a day. The deficit hawk/dove theater will live on for another day while the economy will suffers as a result. But then when it comes to the economy, Obama never was a transformational President. Only less bad than the opposition. Even a Dem Congress wouldn’t change that because most Dems are operating more or less within the same paradigm. The thing is, even if the Republicans DO crash the economy, Obama will get the blame anyway.
There will be no winners.
On an earlier thread, I thanked you for the link to the best and more comprehensive thing I have read yet – from any source – about the platinum coin. I wanted to thank you again in a spot where you are likely to see it!
You are right. If the republicans don’t raise the debt ceiling, or even screw around for too long before raising it, there will be no winners. But I also think the republicans will take the biggest hit politically by far.
I think the President has played this perfectly, and the republicans are now completely boxed into a corner. It couldn’t happen to a nicer group of people.
I’m not sure which link you’re referring to but Krugman, Ezra Klein and Billmon have been writing some good stuff in the last day or so.
BIllmon. The same story that you linked to here. I think that article beats the heck out of anything I’ve read from either Krugman or Ezra.
I’ve never taken notice of Billmon before today; apparently I should be paying more attention.
My safest day on political commentary was when Billmon ‘retired’.
I’m glad it was an exaggeration.
.
GDI….’saddest’
.
Gotta love autocorrect.
I try to stay away from DK most of the time. Is his stuff usually that good? Is there a way to be notified when one particular person puts something up?
You can get your RSS feed set up to just take Billmon – or anyone else — and leave the rest of DKos…
http://www.dailykos.com/user/billmon/rss.xml
Well, 30 minutes later… I find that Safari 6 doesn’t support RSS and neither does outlook for the mac. That’s annoying. Thanks, anyway!
If you have Gmail, Google Apps has an RSS feed.
I love Billmon, but I have more brevity.
Your in a bind. You finally have a post that puts a knife in this stupid idea….and they cite Billmon.
.
I cited Billmon because he didn’t talk crap on the legalities but did put together a coherent political argument against the option. As far as the economy goes, the Coin is still by far the best option, but who gives a crap about the economy anyway. The worse it gets, the more power and attention the political game payers get. It’s the politics, stupid.
Read the Billmon piece. Billmon has it exactly right.
I kind of suspected you were shilling for the White House on this one…
That was my sense as well. Three FP posts in a row the other day.
Booman!!!??? Shilling for the White House!!!???”
How dare you!!!
Why he oughta…!!!
Please.
This blog has fallen so far from the “Frogmarch the sons of bitches outta the White House!!!” position that it occupied during the Cheney/Rumsfeld/Butch II era to the current “Four More Years!!!” thing it pushes now that it is almost unbelievable.
A sorry state of affairs, really.
Shill on, Booman.
It’s gonna bite you in the ass eventually.
Bet on it.
AG
Cheney/Rumsfeld/Butch II, as you say, are no longer in power.
It seems to me that it’s the crazy firebaggers who don’t understand that when the world changes, it no longer makes sense to keep doing the same thing.
To keep making progress, you have to change tactics/strategies/etc to match the circumstances.
Right.
Riiiiight.
DroneWorld.
NationalSecurityWorld.
HomelandSecurityWorld.
N.D.A.A.World.
MediaWorld.
AssassinationWorld.
FixWorld.
Watch.
AG
The point was to get the Republicans to shut up and raise the debt ceiling. From that point of view, the Platinum Coin debate did the opposite of what it was supposed to do.
Really? And how is that? We’re screwed until the MSM points out that one of the two major political parties have hooped aboard the crazy train with no intention of coming back. If it wasn’t the platinum coin, the MSM would have found something else to jerk off to and avoid the real problem.
So, if there is default are any members of the government individually culpable for violating the 14th amendment. What are the consequences?
Interesting question.
Giving hostage takers “a way out” is key to any hostage negotiation…
and convincing them not to take hostages in the first place is the best way to avoid a negotiation over hostages.
No, shooting them in the head and dumping the corpse in a potter’s field is the way to dissuade future negotiations.
Hostage taking continues to work towards to the administration’s political advantage. What ever would they do if the House decided to become humble legislators again, instead of in-your-face public arsonists?
The corporate financiers are faced with an untenable choice. Wingnut retirees and lone guns like the Kochs and Adelson are a lost cause, but the corporate class by and large must countenance its paid antagonism towards the administration and its alliance with ignorant reactionaries. If they continue to empower extremism, they will either face:
a) Republicans actually succeeding, sabotaging the US economy and its markets, and destroying wealth
or
b) the President will continue to trap the GOP in its own web and politick on an agenda of explicit class warfare and using the tax code as a policy tool to address inequality. He will force a right-wing House to pass liberal legislation (that a Democratic congress failed at), against the corporate class’ electoral investments.
Until the corporate class is willing to endorse a political program of detente (they will never endorse this president who condescends to them so frequently, despite his inability to actually affect their profitability in any substantial way) and moderation, the knife plunges deeper.
The corporate class are very bad politicians. That’s why they need their own hired politicians. Unfortunately for them the current crop of Republican politicians really, really suck at politics. So it seems to me the corporate class itself is in a bit of a fix.
I’m glad we can put this issue behind us. What I thought was most in its favor is that it gave Obama the option of going on offense. Bill Clinton’s statement that he’d use the 14th amendment and make the Republicans stop him in court is the kind of positioning that I like.
My test is going to be how the debt ceiling is raised — with or without entitlement cuts. I’m open to arguments on either side as to whether going on offense hurts or helps us in that regard.
There will be cuts, count on that, both parties are eager for them, but they will be called “reforms”.
BTW, the Postmaster-General now says that the USPS will run out of money to pay personnel and suppliers in mid-March, unless Congress acts, which Darryl Issa is unwilling to do. So, along with the debt limit and the sequester, there is a third crisis in March. Oh, in case you are not familiar, the PMG is a Republican and a crony of Issa. The solution that Issa favors is not the bill that the Senate passed last year, but for USPS to tear up all union contracts, cut pay and benefits drastically, leave the Federal retirement and Health benefit systems, and contract out a lot. What a surprise. He will get a lot of it, how much is anyone’s guess.
I almost simply cannot bear what conservatives and Republicans are doing to the USPS. Is the Postmaster General complicit and/or in cahoots with Issa on this? All of the hardworking folks at my local post office are AA. That’s who the GOP is after, aiming to destroy an effective government agency and privatize it. We are continuing to pay a steep price for the 2010 mid-term handover of our Congress, our Governorships, and our state legislatures to extremist conservatives.
This goes back to 2006, before the Democrats won back the House.
Issa is a fucking traitor to this country and should be treated as such.
Period.
With you on that, I cannot bear what they are doing. I love the USPS, employees, services and stamps. And stamps – what self respecting country isn’t proud of their stamps? I didn’t realize it was Issa.
Chairmen of the Government Operations Committee, very powerful.
We had some local meetings vs. closing post offices (somewhat successful), but I’m unaware of anything happening now in support of USPS. Sherrod Brown, iirc, had a petition last year.
I heard Bernie Sanders last week(??) on Thom Hartmann talking of this and he said the stumbling block was Darryl Issa, but the Senate would not go along with privatizing. He says “Issa” with a venomous hiss. You can just hear his disdain in his voice. Sanders also wants to preserve the rural post offices of which his state has many.
PMG had weekly meetings with Issa last year, described as “very cordial”. They both want to privatize the USPS. Lately, the PMG sees our future as “delivering the last mile, for UPS, FedEx and others”. IOW, USPS does the dirtiest hardest part and private industry does the lowest cost part. Relating to that, the Letter Carriers just got an arbitrated contract. They were the last holdouts. https://liteblue.usps.gov/news/link/2013/01jan/news14s2.htm
Read all the givebacks and note how the PMG is “disappointed” and about what.
This exchange at a townhall meeting in 2008 was my first red flag about how much Obama “got it”:
Whenever I see a quote that has ellipsis in it […], I wonder – is the quote out of context?
Here’s a linky to Obama’s remarks you excerpted:
I don’t read that as Obama wants to gut Medicare. YMMV. 😉
FWIW.
Cheers,
Scott.
Or the USPS, either. FWIW.
Cheers,
Scott.
I used the ellipses responsibly. Nothing in the full quote changed the meaning of the excerpt. The thread is about the USPS, not Medicare.
I never said anything about Obama wanting to “gut” anything. And whenever someone throws out that particular straw-man argument, I know that the accuser is responding to their own biases rather than the discussion in front of them.
Bill Clinton’s statement that he’d use the 14th amendment and make the Republicans stop him in court is the kind of positioning that I like.
Bill Clinton was a thoroughly irrelevant president and an unprogressive dealmaker, and if he was so goddamned smart maybe he could have cracked an actual electoral majority once in his life? Let’s go ask Al Gore and Jimmy Carter for their opinions next…
This coin bullshit did achieve in drawing out the very unserious (and I’m completely genuine in saying that) people and making it clear they are completely unqualified to give political or economic advice on anything to anybody. Ever.
God the internet breeds some fucking clowns. Just embarrassing.
If you saw the Huffpo headline “mint the coin” over an adoring photo of Paul Krugman you had to know you were getting crap political advice.
It depends on whether you are trying to fix the economy or to fix the polity. The Coin is still the best option to help fix the economy. I wish the Administration well in trying to fix the polity using a different strategy.
The danger is they will end up fixing neither, and that extraordinarily stupid meme – that Republicans are better at running the economy – will survive. So how will Democrats win the mid-terms if the economy is still in the hole (liquidity trap) that it is now in?
Obama will be blamed:
Never mind the reality that “working with Republicans” is what is thrashing the economy.
In the current circumstances, platinum coinage or the 14th amendment are equivalent for fixing the economic problems. In the long term, the 14th amendment would be better because eventually we’ll leave the liquidity trap and issuing bonds will be superior to coining (or other forms of printing). There are advantage to having control of the money supply back with the government, back where it belongs, but it’s more valuable to be able to issue debt and not just currency.
If he sticks to it, Obama’s strategy will work in the long term. If the Republicans break, fine, the debt ceiling is basically done as a blackmail tool. If not we’ll see a blizzard of thousands of lawsuits against Obama’s impound decisions, citing the 14 amendment, platinum coinage, the impound act, the necessity of the particular spending in question, and various combinations of these issues. The whole pile will move up to the Supreme Court fairly quickly. The Supreme Court isn’t able to adjudicate the necessity and debt status of the entirety of the federal budget, and they aren’t going to want to force platinum coinage for image reasons, so they’re going to throw out the debt ceiling, either on 14th amendment grounds, or because of conflict with appropriation legislation, or because it’s too vague.
The end result is that, if the Republicans try to force the issue, Obama will still be freed from the debt ceiling, and he won’t get blamed for it. The cost will be the economic disruption that occurs between when we hit the ceiling and when the Supremes throw up their hands and throw out the ceiling.
If that is the case, Obama should be lining up a series of cuts his base will tolerate and the GOP will absolutely hate – quicker withdrawal from Afghanistan, military bases abroad, Guantanamo, private sector prisons, corporate welfare, subsidies to (mostly red) states etc. Lets see how long it takes for the GOP to capitulate then. Some of the cuts will be irreversible and that may be no bad thing.
Republicans should be upfront about it (like “make Obama a one term president”); they want him to respond with a move that gives them an opening for impeachment.
Talking heads with George Stephanopolis on ABC.
I expect a travesty as about 7 people are there, and it opened with jokes about Jacob Lew’s signature…
Cheers,
Scott.