NYT The Bipartisan March to Madness

[marginlized]

by David Stockman
http://www.nytimes.com/2011/04/24/opinion/24stockman.html?pagewanted=2&hp

Stockman is one of those Republicans that make me very nostalgic for the 70's when, for example, Nixon talked of initiating a minimum National Living Wage for every citizen in a broadcast speech.

And I have to agree with most of Stockman's editorial yesterday. He shreds both parties and the President. But beyond balanced budgets, he has some deadly things to say about central banks generally:

"Even central banks cannot defy the canons of sound finance indefinitely, however. Japan will buy less Treasury paper as it turns inward to recover from the wrath of nature. Likewise, China will drastically curtail its currency pegging and related Treasury bond purchases in order to suppress the rip-roaring imported inflation and speculative bubbles now engulfing its domestic economy. And unless the Fed wants to ruin the value of the dollar, it will need to keep its promise to get out of the bond-buying business, too, when its second round of quantitative easing ends in June.

With the central banks no longer ready to buy, the Treasury market will once again be driven by real investors — many of them likely to demand higher interest rates owing to the heightened fiscal risks recently highlighted by Standard & Poor’s. Ominously, the biggest and baddest of these real investors, the quarter-trillion-dollar Pimco Total Return Fund, has already thrown down the gauntlet by selling Uncle Sam’s paper short."

[Demeter]

1. Who's Sorry Now?

Stockman's enabling started us down this path.

[Jim Lane]

2. Stockman had qualms even when it was going on

His book, The Triumph of Politics, is very informative about the nuts-and-bolts of the budget process. He took the job as Reagan's budget director as a True Believer in the "small government" mantra. Then he had to deal with Cabinet secretaries, like Weinberger determined to overspend madly on the military, and with Congressional Republicans who decried wasteful spending but fought relentlessly to protect the spending that benefited their constituents. In the book, with the benefit of hindsight, he admits that he was too willing to see these as temporary aberrations, and thus suppressed his growing doubts for too long.

He ended up recognizing that the Reagan budget was on course for a record deficit. He argued for a tax increase, thus incurring the enmity of all the conservative ideologues.

[Keith Bee]

3. Bipartisanshit reminds me of the old t-shirt logo

"Be reasonable: Do it my way." (The "my" = Republicans in this case.)