FAA shutdown is a windfall for airlines

Bloomberg:

U.S. airlines led by United Continental Holdings Inc. (UAL) may pocket $1.3 billion in higher fares tied to the Federal Aviation Administration’s partial shutdown as Congress deadlocks on the agency’s funding.

The FAA already has been unable to collect $28.6 million a day in aviation taxes since midnight on July 22. Missed receipts may climb by $1 billion more until lawmakers reconvene in September, FAA Administrator Randy Babbitt said yesterday.

The largest U.S. carriers, including United, Delta Air Lines Inc. (DAL) and Southwest Airlines Co. (LUV), stand to reap that much new revenue after raising fares to mirror the suspended taxes and keeping the difference, said Rick Seaney, chief executive officer of Dallas-based ticket researcher FareCompare.com.

“This is manna from heaven, and a real windfall for the airlines,” Seaney said in an interview. “I don’t expect them to drop the fare increases. Why would they? Total ticket prices are the same and it doesn’t seem to be hurting bookings.”

And why should they lower fares? They basically have a monopoly on travel, it's not like I have another way to get from DC to Chicago, so why shouldn't Delta, United and American screw me, and you? They already do what can only be described as the best impression ever of price fixing, where all of their fares magically are exactly the same, to the same penny! But don't accuse them of doing anything illegal, because they all give Congress lots of money, and Congress doesn't like it when come after their friends. Read the rest of this post...

Ezra Klein on deficit deal: "This is a terrible, no-good, very bad deal"

Ezra Kelin is someone who often, in the past, seemed to welcome the administration position on most issues. It's thus interesting that he's growing increasingly unhappy of late with much of what the administration does, including the deficit deal. (And it's not just Ezra.  I'd put Matt Yglesias and Nate Silver in the same category, and even Krugman, who you'll recall during health care reform starting drinking the Kool-Aid for a while.)  I would suggest that this is evidence that discontent with the President has moved beyond the "Internet left fringe" and now strikes at the core of the believers.

Support for the President never seems to improve - it always seems to grow weaker.

More from Ezra on the deficit deal:

This is a terrible, no-good, very bad deal.

It's not just that Congress waited until the last minute, taking an unnecessary risk in a fragile economy. And it's not just that the tough decisions got punted once again. This is a bad bill at a time when the economy -- and the American people -- needed a good one. It's a bill that does too little now, and too little later, and it comes in lieu of an obvious, achievable solution that would have done better.

The two reigning theories of our current economic moment are not opposed to one another. The economy is weak now, with too little demand and too little growth, and threatened by mounting deficits later. The answer, as any economist can tell you and as many told Congress, is simple: do more to support the recovery now and more to cut deficits later. In the short-term, we should expand the payroll tax cut, make a massive investment in infrastructure, continue funding unemployment insurance, and do more to aid the states. In the long-run, we should cut spending in entitlement programs as well as discretionary programs, and raise significant revenues and modernize the tax code by flattening the base and closing loopholes.

These two priorities don't conflict. In fact, they support each other. Faster growth now will mean smaller deficits later. And politically, more stimulus now would have helped Democrats agree to more deficit reduction later. But our political system isn't very good at both/and. It's more suited to either/or. And so Republicans fought stimulus now and couldn't agree to the revenues necessary for significant deficit reduction later. So we got neither. We're pulling support out from under a teetering economy now and we're punting the hard decisions on the deficit to yet another committee, and yet another manufactured deadline.

Read the rest of this post...

Romney enters witness protection

Well he might as well.  Joe and I were talking about this earlier today.  The man has simply hidden himself under a rock, hoping the GOP candidate, and President Obama, keep damaging themselves while he continues to quietly fundraiser.  It's not a dumb strategy.  A somewhat wimpy strategy, yes, but the other GOP candidates are letting him get away with it.  More from Matt Browner-Hamlin at AMERICAblog Elections: The Right's Field.

Time will tell whether or not Romney's low-impact campaign strategy will work or not. If the field today doesn't change, I don't think there's something obviously wrong about not sinking to the level of non-entities like Pawlenty & Huntsman or crazy people like Bachmann. But if the field expands - if someone like Perry or Palin or Christie joins the race - Romney will have to do more publicly. Romney's current methodology certainly doesn't seek to inspire nor does it seek to widen his somewhat meager lead; these are the most notable flaws in my book. But I'm guessing it's also helping Romney save tons of money and raise even more. A candidate who is dedicated to fundraising call time can be a powerful force in the long run.

Read the rest of this post...

"America’s real crisis is not a debt crisis. It’s an unemployment crisis."

Joe Nocera in the NYT:

America’s real crisis is not a debt crisis. It’s an unemployment crisis. Yet this agreement not only doesn’t address unemployment, it’s guaranteed to make it worse. (Incredibly, the Democrats even abandoned their demand for extended unemployment benefits as part of the deal.) As Mohamed El-Erian, the chief executive of the bond investment firm Pimco, told me, fiscal policy includes both a numerator and a denominator. “The numerator is debt,” he said. “But the denominator is growth.” He added, “What we have done is accelerate forward, in a self-inflicted manner, the numerator. And, in the process, we have undermined the denominator.” Economic growth could have gone a long way toward shrinking the deficit, while helping put people to work. The spending cuts will shrink growth and raise the likelihood of pushing the country back into recession.

Inflicting more pain on their countrymen doesn’t much bother the Tea Party Republicans, as they’ve repeatedly proved. What is astonishing is that both the president and House speaker are claiming that the deal will help the economy. Do they really expect us to buy that? We’ve all heard what happened in 1937 when Franklin Roosevelt, believing the Depression was over, tried to rein in federal spending. Cutting spending spiraled the country right back into the Great Depression, where it stayed until the arrival of the stimulus package known as World War II. That’s the path we’re now on. Our enemies could not have designed a better plan to weaken the American economy than this debt-ceiling deal.

One thing Roosevelt did right during the Depression was legislate into being a social safety net to soften the blows that a free-market economy can mete out in tough times. During this recession, it’s as if the government is going out of its way to make sure the blows are even more severe than they have to be. The debt-ceiling debate reflects a harsher, less empathetic America. It’s sad to see.

My own view is that Obama should have played the 14th Amendment card, using its language about “the validity of the public debt” to unilaterally raise the debt ceiling. Yes, he would have infuriated the Republicans, but so what? They already view him as the Antichrist. Legal scholars believe that Congress would not have been able to sue to overturn his decision. Inexplicably, he chose instead a course of action that maximized the leverage of the Republican extremists.

Read the rest of this post...

Tea Party Envy

And excellent piece by Richard Cohen in today's Washington Post.

I suffer from Tea Party envy. There is little about the actual party I like and there are some members I abhor, but I am jealous of its sense of purpose, its determination and its bracing conviction that it is absolutely right. In its own way, it waves a crimson battle flag while President Obama’s is a sickly taupe — the limp banner of an ideological muddle.

Obama would be a good White House chief of staff, but as a president he lacks political savvy. He never knew how to get ahead of the Tea Party wave. He never knew how to marshal — or create — his own constituency. Republican invective notwithstanding, he lacks demagogic tools. He tries to solve problems instead of, for the Republicans, creating them. Barack Obama does not do pain.

[The Tea Party] knows precisely what it wants to do. It stands in shimmering contrast to Obama, who seems vaguely at a loss. He had ideas galore, but they were merely interesting and not powered by ideological passion. He liked. He didn’t love. Afghanistan is the epitome of Obamaism: More troops and then fewer troops and the goal is not to win, just merely to end it so that it does not look like a loss. It’s a vaporous policy, a war in the spirit of the one waged in Libya, which could have ended by now had the United States not stopped its active participation. Does he want to win? Does he care about losing? What’s the cause? Obama’s wars lack music.

The only thing I'd quibble with is everyone talking about the Tea Party as if it exists, or is something new. They're simply conservative Republicans organized by Dick Armey, the former number two Republican in the House under Newt Gingrich. If you think "Gingrich disciple," the Tea Party's conservatism and obstinance make perfect sense. They're not new. This is the Gingrich government shut down all over again, but better played and against a decidedly less adept enemy. Read the rest of this post...

White House blames lib groups for deficit deal debacle at secret meeting

If only the President had a bully pulpit with which to get his message out across the land...

From Ben Smith, who confirmed it from two sources, we learn that at last night's "Common Purpose" meeting, a regular (supposed to be secret) get together between the White House and progressive advocacy groups (where the White House routinely yells at them, I hear), the groups got an earful about the President's new deficit deal he reached with Republican Speaker John Boehner:

Yesterday, [White House National Economic Council Director Gene] Sperling faced a series of questions about the White House's concessions on the debt ceiling fight, and its inability to move in the directions of new taxes or revenues. Progressive consultant Mike Lux, the sources said, summed up the liberal concern, producing what a participant described as an "extremely defensive" response from Sperling.

Sperling, a person involved said, pointed his finger backed at liberal groups, which he said hadn't done enough to highlight what he saw as the positive side of the debt package -- a message that didn't go over well with participants.

That sounds oddly familiar. In fact, it's the same admonishment a group of liberal bloggers received from then- vice presidential economic adviser Jared Bernstein on the one-year anniversary of the stimulus. I attended that meeting and wrote at the time, back in February of 2010:

I guess what struck me as most interesting about the meeting were two things. First, when Bernstein noted that, in trying to solve the country's economic problems, the administration faces "budget constraints and political constraints." By that, I took Bernstein to mean that the stimulus could only be so large last time, and we can only spend so much more money this time, because we're facing a huge deficit, so there's not much money to spend, and because the Hill and public opinion won't let us spend more.

That struck me as GOP talking points winning the day, and I said so (Professor Kyle wrote about this very notion the other day on the blog). The only reason we're facing a budget constraint is because we gave in on the political constraint. We permitted Republicans to spin the first stimulus as an abysmal failure, when in fact it created or saved up to 2m jobs. Since Democrats didn't adequately defend the stimulus, and didn't sufficiently paint the deficit as the Republicans' doing, we now are not "politically" permitted to have a larger stimulus because the fiscal constraint has become more important than economic recovery.

And whose fault is that?

Apparently ours.

Bernstein said that the progressive blogs (perhaps he said progressive media in general) haven't done enough over the past year to tell the positive side of the stimulus.

I remember Bernstein specifically asking the Nation's Chris Hayes whether he and his paper had done enough to help promote the benefits of the stimulus over the proceeding year. Chris said that they had just done a podcast about it that day, but yes he probably could have done more. I recall jumping in and noting that Chris was the last person Berstein should criticize, as he's on Rachel Maddow every night defending the administration quite diligently.

In any case, this isn't a coincidence. They actually believe, inside the White House, that we're to blame for their problems. That they're doing a chipper job and the public would know it, but for the Netroots and the liberal advocacy groups doing such a lousy job selling the President's magnificent handiwork.

Things aren't getting better because the administration doesn't even recognize that they are - that their boss is - the problem. Read the rest of this post...

Krugman: Europe is in the same mess that we’re in

Paul Krugman again sees connections between what's happening in the US and what's going on in Europe (my emphasis):

I defer to nobody in my dismay and disgust over the debt ceiling disaster. America really is a mess.

But I still wonder, looking at news coverage, why our disaster is dominating the headlines to the apparent exclusion of European woes. It’s there if you look for it carefully, and especially if you’re keeping track of the market spreads, but a casual reader might not even realize that the whole eurozone thing is coming apart at the seams.

I'm harping on this (as is he) because it's the same thing in both places. Personal debt is so high here that it's killing the US economy; and sovereign debt is so high in currency-bound Europe that it's killing the peripheral economies, from Greece to Italy (yes, Italy is now peripheral; that's how close to the center the trouble has reached).

So on both shores there are huge debts (I'm not including very safe, low-interest US Treasuries). And for every unit of at-risk, burdensome debt there's a creditor — who wants to be paid back now, regardless of the price to the rest of the economic system.

US banks want every dollar of home mortgage debt to be repaid, for example, even if it hamstrings the consumer economy for the next ten years to do it, and even (or especially) if it locks in those bank-created bubble prices.

European lending banks in the EU core — Germany, France — are holders of that Greek and peripheral sovereign debt. And they too want to be paid every centime, regardless of what it does to the EU in the process.

In short, it's a rentier's rebellion, of course, or Milton Friedman metastasized. Free market pre-crash manipulation for me, government-enforced post-crash responsibility for thee.

Thus a crisis on both sides of the Atlantic — in the ironically named "advanced" economies. Krugman is right to be concerned. As I've written before, debt can be forgiven, defaulted, repaid. Forcing bank-induced bubble debt to be repaid in full (i.e., with no forgiveness or restructuring) murders the future to repay the (corruptly created) debts of the past.

Unfortunately, the creditors (the rentier banks) are in charge on both continents; I don't think we'll be out of this until they aren't.

GP Read the rest of this post...

Hope takes a holiday

WSJ via Greg Sargent:

The White House hopes lawmakers will return to Washington in early September having heard an earful from voters about jobs and the economy. Democrats see potential for bipartisan support on the measures, but they could face stiff opposition from congressional Republicans worried about government spending.

Mr. Obama hasn't said how he would pay for the initiatives. One option under consideration in the White House is ending certain subsidies, such as for oil companies, and tax breaks.

I'm starting to align myself more and more with Woody Allen (and Hillary Clinton) on this whole "hope" thing.  People don't just turn out, and vocally turn on, their members of Congress because you give a blind quote to the Wall Street Journal.  And it takes more than hope to make it happen.  A lot of us aren't feeling much other than despair at the moment.  If past is prologue, why should the effort on jobs be any different than the stimulus, health care reform, or the deficit?  Big promises, small effort, and a so-so, or in the case of the deficit, horrific, finish.

The White House thinks it can dispirit millions of people who voted for the President, who believed in him, who truly thought he was different, who believed that he would actually, finally, bring change to this city, to our dysfunctional government, only to find that he was as bad, if not worse, than the rest of them.  The White House thinks we can go through all of that, again and again, and then they can just pivot and say "never mind that man behind the curtain, now go sic em," and we're all, like happy little lemmings, going to start terrorizing members of Congress on their behalf?

Uh uh.

I just heard from a young gay Obama supporter, who works in DC politics, who told me he's not even voting for the President next time.  Not that he wants him to lose.  He just isn't very interested in him winning.  And he doesn't think his vote will make the difference anyway, so it's a matter of principle for him.  The problem for the President is that if you add up enough dispirited principled voters, suddenly you find yourself losing a close state. (You also lose a lot of volunteers, and donations, along with the lost enthusiasm - I've had more than one person tell me they're not going to volunteer, or donate, or raise money this time around like they did last time.)

It's a larger problem for the President, and one his team has never fully acknowledged going back to the days of the campaign, when it first reared its head.  The Obama people - and let's face it, the President himself - have/has a way of alienating people who really want to like them/him.  You don't just do that to people, get their hopes up, then dash them repeatedly, and then think you're going to flick some switch and everything's going to be all back to normal.

Not to mention, it takes a lot of organizing to get people to swarm their members of Congress.  And it's something that's likely far beyond the capabilities of the demoralized masses, and the emasculated sorry excuse for non-profit advocacy groups, that we now have in the wake of three years of hope takes a holiday.

As negative as this presidency has made me, I'm someone who almost always thinks you can win in politics so long as you have the right people and the right plan.  But like that young gay kid I mentioned earlier, and like so many other people I work with every day, I'm just not sure how much I care anymore.  Or rather, I still care a lot - but I know this President, I know this Congress, I know these pitiful progressive non-profits who do little more than genuflect in the shadow of a White House that does little more than genuflect before anything that stands in its way, and I know that regardless what any of us do, the powers that be are going to sell us out and make a mess of things, like they always do. It's in their nature.  And the Republicans know it too, as evidenced by their spectacular victory over the President and the Democrats in Congress on the deficit deal.

Please, someone, convince me that I'm wrong. Read the rest of this post...

Taibbi: The Debt Ceiling Deal—Democrats take a dive

This is just starting to make the rounds, and it should. It presents the other frame to the "poor Obama is just too weak" story that gives him such a pass among his much-abused base.

That other frame, for what it's worth, is "clever Obama is really good at convincing his base he's actually on their side."

Love it or hate it, intellectual honesty (if not electoral safety) requires both frames be considered.

So in service of intellectual honesty, here's Matt Taibbi, telling the Frame 2 story, the "clever Obama" tale. His title is "Debt Ceiling Deal: The Democrats Take a Dive" and it makes the case.

(In case you don't know, the phrase "takes a dive" comes from prize-fighting. A fighter takes a dive when he puts up just enough fight to fool his fans — backers and bettors — then throws the fight to his opponent by falling down to a weak late-round punch. For this deception he is paid extra.)

From the article (my emphasis everywhere):

The general consensus is that for the second time in three years, a gang of financial terrorists has successfully extorted the congress and the White House, threatening to blow up the planet if they didn't get what they wanted. ... Commentators everywhere are killing the president for his seemingly astonishing level of ball-less-ness. ... The popular take is that Obama is a weak leader of a weak party who was pushed around by canny right-wing extremists.

But, according to Taibbi:

The Democrats aren't failing to stand up to Republicans and failing to enact sensible reforms that benefit the middle class because they genuinely believe there's political hay to be made moving to the right. They're doing it because they do not represent any actual voters. I know I've said this before, but they are not a progressive political party, not even secretly, deep inside. They just play one on television.

For evidence, all you have to do is look at this latest fiasco.

For evidence, Taibbi points to the tons of money that Obama is collecting for his 2012 ad campaign (er, re-election effort). If Obama's really a loser, that's a lot of smart money chasing a really bad candidate. Or, you could look at it this way:

Who spends hundreds of millions of dollars for what looks, on the outside, like rank incompetence?

It strains the imagination to think that the country's smartest businessmen keep paying top dollar for such lousy performance. Is it possible that by "surrendering" at the 11th hour and signing off on a deal that presages deep cuts in spending for the middle class, but avoids tax increases for the rich, Obama is doing exactly what was expected of him?

This game is for keeps, as I'm sure you've figured out, and we're at a Herbert Hoover moment. It's 1932 and if Obama is not FDR, but Hoover in disguise, the consequences of not knowing that are huge, possibly world-historical.

And if that's true, if we're the mark in this planet-killing game, it would be horribly self-indulgent to want to stay ignorant, wouldn't it.

GP Read the rest of this post...

The deficit deal is going to hurt the economy and the pivot to jobs

Yesterday, I noted that while I strongly support and believe in the need for Democrats, particularly the White House, to shift their focus to job creation, the early signs from the Hill suggested that the pivot was likely to fail. A significant part of my fear stems from the recently completed deficit hysteria, which will make any sort of jobs creation program (either by government spending or tax cuts) a certain target for more deficit hysteria.

Atrios captured this perfectly, describing the pivot to jobs as effectively saying, "We solved the deficit problem, now let's add to the deficit."

There's another layer to the challenges created by the deficit deal - namely, what impact it will have on the economy and on job creation. As Paul Krugman keeps pointing out, Economics 101 suggests a massive cut in government spending will have an anti-stimulative effect on the economy. But via Digby, we see that Treasury Secretary Tim Geithner is not operating from the same textbook as Krugman and the rest of us.  Here's Geithner on ABC:

Well, let's start with what this deal does. The most important thing is it creates more room for the private sector to grow because although it locks in some very substantial long term savings, the near term cuts are very modest. So that-- that was the really critical thing in making sure that this economy continue to grow and recover.

This directly contradicts JP Morgan's economic team's analysis of the economic impact of the deficit deal.

Impending fiscal drag for 2012 remains intact. The deal does nothing to extend the various stimulus measure which will expire next year: we continue to believe federal fiscal policy will subtract around 1.5%-points from GDP growth in 2012. Its possible the fiscal commission could do something to extend some measure such as the one-year 2% payroll tax holiday, though we think unlikely, as it would need to be paid for, which would be tough. If anything, the debt deal may add modestly to the fiscal drag we have penciled in for next year.

While I'm not one to prioritize the opinions of the titans of Wall Street over government officials, JP Morgan's analysis is in line with Krugman and other followers of Econ 101 are saying.  (The markets were none too thrilled with the deal either.)

Unfortunately, Geithner's spin about the magically positive impact of the deal doesn't end at growing the economy, but extends to job creation as well.

GEORGE STEPHANOPOULOS: So this won't cost us jobs?

TIM GEITHNER: No, it will not. Now ... if we put this behind us then we can turn back to the important challenge of trying to find ways to make sure that we do everything we can to get more people back to work, strengthen our growth. And we'll have more ability to do that now with people more confident and we can start to get our arms around the long-term problems.

But this just doesn't align with what non-partisan experts are saying. The Economic Policy Institute predicts the deficit deal will cost the US 1.8 million jobs in 2012 alone.

And the naive optimism, that Republicans will behave like true gentlemen when Democrats pivot to job creation, extends beyond anonymous Senate sources - Geithner is on the record making this prediction.

Well, because I think it's going to be very hard for Republicans to -- to prevent that from happening. I think it's very hard for them to stand up and say that they're going to try to block the extension of that tax cut that's worth about $1,000 a year for the average American family. Untenable for them to block that.

As I pointed out yesterday, conservatives don't care about the deficit, they care about tax cuts for rich people. As such, tax cuts could conceivably be exempted from deficit hysteria and not be offset with comparable cuts elsewhere. But I won't assume that that is the case until conservatives actually say that they won't exact their pound of flesh from federal social spending to continue the payroll tax cuts.

And before any Democrats start preaching about the unmitigated blessings of tax cuts as a vehicle for job creation, let's remember that the Bush tax cuts lead to nothing more than an average of 11,000 jobs per month over the course of Bush's presidency.

We desperately need to get people back to work in America. But it's going to be impossible for this to happen when Democrats in the administration and on the Hill are dishonest about the consequences of their deficit hysteria.  Things aren't getting better on their own, and yesterday the President signed a law that will almost certainly be a significant drag on the economy.

The response to this should be a real stimulus that focuses on job creation and infrastructure construction, and keeping Americans in their homes.  But Democrats now espouse a mindset that says government spending is functionally bad for the economy.

The embrace of austerity, and the refusal to make job creation a priority earlier on, mean that working and middle class Americans will continue to suffer, while no price will be asked of wealthy elites.  And with the balance of power as it is, it likely never will be asked of them. Read the rest of this post...

Only ten percent of the country was for the deal Obama & Boehner reached

How did that happen? From Kevin Drum:

According to a recent poll, only 22% of Americans consider themselves tea party members or supporters, half the number of last November. And of that 22%, two-thirds supported a debt ceiling compromise and more than half thought it should include tax increases as well as spending cuts:

In a nationwide CBS News poll in mid-July, 66 percent of Tea Party supporters said that Republicans in Congress should compromise on some of their positions to come to an agreement with Democrats on the debt-ceiling increase. By contrast, 31 percent said Republicans should stick to their positions even if it meant not coming to an agreement....When Tea Party supporters were asked if the debt-ceiling agreement should include only tax increases, only spending cuts, or a combination of both, the majority — 53 percent — said that it should include a combination. Forty-five percent preferred only spending cuts.

So who was driving the absolutist view in Congress over the past few months? If it was the no-compromise wing of the tea party, that's less than 10% of the country. So riddle me this: how did we manage to let 10% of the country bring us to the brink of disaster? It is a remarkable thing.

Grey Matter explains:

How is this happening? One big reason is because one side is functioning on steroids, ripping apart flesh and just going hog-wild nuts to get what they want, while the other side is populated by meek, overly-cautious Democrats who refuse to see the ugly reality of the situation and/or just can't muster an equal-in-force response.

We've always known the Dems to be wet noodles and spineless, but if they remain this way given the piranha-like opposition, there will be nothing left of them but their bones and their dignity.

Read the rest of this post...

Man jumps White House fence while CNN is on the air

Read the rest of this post...

Dems think Rs are going to be nice to them since Ds caved on deficit

Politico's Playbook:

A Senate Democratic official tells Playbook: “There is nothing stimulative or jobs-based in this final deal that got struck. That’s unfortunate, but it also gives us an opening in September that we can say, ‘We’ve met you halfway and passed a huge, historic debt-reduction measure. Now it’s time to do something for jobs. The administration has been saying for weeks, ‘Once we get off this debt-ceiling thing, we’ll be able to get back to jobs.’ In the last 24 to 48 hours, one of their selling points of this deal has been that it resolves this thing so we can get back to jobs.

Yes, I'm sure the Republicans will let you have things your way once you whine that you've "met them halfway." That's usually the way extortionists work. Not to mention, the Republicans want the White House and the Senate next November 2012.  What possible reason could they have for letting Democrats improve the economy between now and then? Read the rest of this post...

Krugman: "It’s a disaster—and maybe not only an economic disaster"

Paul Krugman has his eyes on a wider world than just these shores, and on a wider problem. In a post innocuously named "Macroeconomic Folly," he first presents the view from 10,000 feet:

[W]hat we’ve witnessed pretty much throughout the western world is a kind of inverse miracle of intellectual failure. Given a crisis that should have been relatively easy to solve — and, more than that, a crisis that anyone who knew macroeconomics 101 should have been well-prepared to deal with — what we actually got was an obsession with problems we didn’t have. We’ve obsessed over the deficit in the face of near-record low interest rates, obsessed over inflation in the face of stagnant wages, and counted on the confidence fairy to make job-destroying policies somehow job-creating.

But economic problems don't just involve economies, do they?

It’s a disaster – and maybe not only an economic disaster.

Then he adds this little burp from our planet's recent and savory past:

Fears of far-right rise in crisis-hit Greece

ATHENS, Greece — They descended by the hundreds — black-shirted, bat-wielding youths chasing down dark-skinned immigrants through the streets of Athens and beating them senseless in an unprecedented show of force by Greece’s far-right extremists.

In Greece, alarm is rising that the twin crises of financial meltdown and soaring illegal immigration are creating the conditions for a right-wing rise — and the Norway massacre on Monday drove authorities to beef up security.

The move comes amid spiraling social unrest that has unleashed waves of rioting and vigilante thuggery on the streets of Athens. The U.N.’s refugee agency warns that some Athens neighborhoods have become zones where “fascist groups have established an odd lawless regime.”

Hey, no problem; just "heartland" folks exercising their Second Amendment solutions. Couldn't happen here, right?

GP Read the rest of this post...