CASSANDRA WINS, EVERYONE ELSE (BUT THE 1%) LOSES BIG TIME

The fix is finally in; the patch is on the tires of the US Government’s functionality and credit, at least for a few months.  But irreparable damage has been done, and no one could say, they didn’t see it coming, especially readers of DAVEMARASHSEZ.

http://davemarashsez.blogspot.com/2013/08/how-congress-earns-and-burns-your-money.html

In this case, I hate to say, “I told you so.”

Check out the first hours' damage report from the New York Times,

http://www.nytimes.com/2013/10/17/business/economy/high-cost-to-the-economy-from-the-fiscal-impasse.html?src=un&feedurl=http%3A%2F%2Fjson8.nytimes.com%2Fpages%2Fnational%2Findex.jsonp

“Even as the shutdown of the United States government and the threat of a default appear to be coming to an end, the cost of Congress’s gridlock has already run well into the billions, economists estimate. And the total will continue to grow after the shutdown ends and uncertainty persists about whether lawmakers might reach another deadlock next year.”

Sharp losses of what should have been economic performance are almost certain to be recorded for the 4^th Quarter of 2014, the Times reports, in employment, business earnings, borrowing costs and overall national and global growth, all of this due to “the intransigence of House Republicans.”   

Like your humble blogger, the Times looked back to the pre-run of this gratuitous stupidity in 2011.  “We saw huge effects during the summer of 2011, with consumer confidence hitting a 31-year low in August and third-quarter G.D.P. growing just 1.4 percent,” said Beth Ann Bovino, the chief United States economist at Standard & Poor’s.

Now, Bovino says, we can only expect worse.

Already, Times reporters Annie Lowrey, Nathaniel Popper and Nelson D. Schwartz write, “The two-week shutdown has trimmed about 0.3 percentage points from fourth-quarter growth, the forecasting firm Macroeconomic Advisers, based in St. Louis, has estimated.”

And they add, “Most analysts are predicting that growth will remain subpar, probably running at an annual pace of around 2 percent. While companies have generally reporting healthy earnings for the third quarter, an unusual number have been warning that the fourth quarter is not going to look as good, in part because of the political turmoil. Of the 105 companies in the Standard & Poor’s 500-stock index that have reported earnings so far, 68 have provided negative guidance, according to S&P Capital IQ.”

These long-term losses will extend the short-term effect I predicted, more free lunch for the 1%, paid for by the 99%, a predator-creditor’s ball.

“The impasse over the debt ceiling has already raised the United States’ short-term borrowing costs, with investors demanding triple the interest payments they demanded just a few weeks ago, in some cases. Concerns about the United States as a borrower might have a much longer and deeper effect than the shutdown, analysts think.

“A new Macroeconomic Advisers report, prepared for the Peter G. Peterson Foundation, estimates the costs of the fiscal uncertainty of the last few years.”

Since 2009, PGPF says, corporate borrowing costs have gone up 0.38%; economic growth has gone down by 0.3% per year, at a cost of 900,000 jobs.

Now, to the future, the proposed agreement keeps the government open only until January 15, and the staves off default only till February 7.

The Republicans like to call themselves, “the party of small business.”  Ask any small businessman about the costs of preparing for shutting down the shop, much less actually doing so, and then re-opening.  If the next round of “negotiations” gets close to either deadline, all those costs, which for the US Government are huge, will be repeated.

Madness.

And, as the curtain on Act 1 of this unending tragedy falls, here’s what John Boehner had to say to conservative radio host Bill Cunningham: "We fought the good fight; we just didn't win."

You didn’t win, Mr. Speaker, that’s for sure.  The pathetic display Tuesday, after the Senate stepped back just so you could “be a leader” and vote for the inevitable, should put a final stamp of failure on your tenure.  The Tea Party didn’t win; its ratings in national polls have never been lower.  So bad game, badly played.

But the real losers here are the United States and its taxpayers, who will not reap the unearned benefits of your foulness, who will, this month, next month, next year and for years after have to pay more to and earn less from your benefactors and beneficiaries, the very, very rich.

GAMESMEN, GO HOME

These days, it seems too many people have come to believe, as Shakespeare almost put it, “All the world's a game, And all the men and women merely players.”

Here are 2 deadly serious examples of what I mean.

Let the NSA spy indiscriminately on us, and we’ll try and beat them at their own game.

“From Silicon Valley to the South Pacific,” the Associated Press reported this week, “counterattacks to revelations of widespread National Security Agency surveillance are taking shape, from a surge of new encrypted email programs to technology that sprinkles the Internet with red flag terms to confuse would-be snoops.”

http://www.abqjournal.com/280684/news/counterattacks-growing-against-nsa-spying.html

In a way, this report also plays a popular news media game, the “trend” story, in which a few micro-scale fragments of the real world are inflated into a global movement. 

Here is some of the evidence cited by the AP to show a digital world enflamed:

--- “[Encryption] Developer Jeff Lyon in Santa Clara, Calif., said that 2,000 users have installed [his Flagger service] to date.”

--- “Pretty Good Privacy, or PGP, a free encryption service was being loaded about 600 times a day in the month before Snowden’s revelations broke. Two months later, that had more than doubled to 1,380, according to a running tally maintained by programmer Kristian Fiskerstrand.”

--- “Berlin-based email provider Posteo claims to have seen a 150 percent surge in paid subscribers due to the “Snowden effect,” to 25,000 in the past four months.”

WOWIE ZOWIE!!! Add ‘em all together, and accept the advocates’ figures as accurate, and you get about 100,000 new encryptors out of, what, a billion users of the global internet.

But wait, AP says, there’s more: “CryptoParties are springing up around the world as well. They are small gatherings where hosts teach attendees, who bring their digital devices, how to download and use encrypted email and secure Internet browsers.”

That’ll show those NSA bastards!

The “trend” would be laughable were the plans of these “digital rebels” not so awful.

Flagger Boy Lyons says, “The goal here is to get a critical mass of people flooding the Internet with noise and make a statement of civil disobedience.”

While Electronic Frontier Foundation activist Parker Higgens in San Francisco wants everybody to encrypt, because, he says, “Encryption loses its value as an indicator of possible malfeasance if everyone is using it.”

Absurd, absurder, reductio ad absurdum: “University of Auckland associate professor Gehan Gunasekara said he’s received ‘overwhelming support’ for his proposal to ‘lead the spooks in a merry dance,’ visiting radical websites, setting up multiple online identities and making up hypothetical ‘friends.’

“And ‘pretty soon everyone in New Zealand will have to be under surveillance,’ he said.”

Hey, schmuck!  That’s what the surveillance system is set up to do, and if you think you and all your friends have the budget to out-run the spooks, good luck to you. 

Increasing the scale of data-mining is as much of a challenge to the security services as a hard, straight fastball down the middle is to a big league hitter.  And what’s the virtue of camouflaging serious encryption with fun’n’games versions?

The point here is not to stir the hornets’ nest, make ‘em mad, make ‘em even more hyperactive.  It is the opposite, to encourage, and if necessary, force the NSA, GCHQ and whatever the hell New Zealand calls its spook service,--  which is already part of the NSA-led “Mighty Five” intelligence collaborative -- to calm down, be more selective and more rational in their surveillance collection, collation and analysis.

And making that happen is not an Effing game, any more than is legitimate national security surveillance. The NSA et al have real jobs to do, including protecting our freewheeling society from real enemies, whose plots, while far fewer than the spooks and their budgets and their tactics seem to assume, still can be truly destructive.

That their exaggerated “trend” might have dangerous real world effects is something AP left out of their story.

The gamesmanship of this new generation of Jerry Rubin-style gigabit tricksters is repellant enough, but it is literally amateur night compared to the game-playing radical-right Republicans of the House of Representatives.

To them, the functions of the US Government and its financial credibility are just tokens in a game to force their will down the throat of that African-American (and can you see them smirking at the first half of that description?) President Barack Obama.

To them, the serious consequences of default or a government AWOL, matter less than their sense of “fair play.” 

 “You can’t just demand pure capitulation,” Boehner-buddy Representative Tom Cole, (R-OK), said,   “Negotiations don’t work that way.”

A senseless sentiment amped-up by Tea Party Rep. Marlin Stutzman (R-IN), who whined: "We’re not going to be disrespected.  We have to get something out of this. And I don’t know what that even is.”

Stutzman seems to think that, like his 8 year old daughter, he should get a “self-esteem” trophy for having played the game and lost.

Not in the real world.  In the world, you need both votes and brains to win. 

Unless, like Congressman Cole, you can tell the Washington Post that losing on Obamacare, losing on the shutdown, losing on default, is really a win, because it “forces” President Obama to do what he’s been asking to do for months now, use the normal legislative process to carve out changes in Federal taxing and spending.

http://www.washingtonpost.com/politics/all-eyes-on-us-stock-markets-as-debt-deadline-draws-closer/2013/10/14/4a2a9992-34be-11e3-80c6-7e6dd8d22d8f_story_1.html

“Any agreement, Cole told the Post, that creates a process to litigate broader budget issues would achieve an important GOP goal. ‘If you’re able to do that and you’re able to get some savings out of the entitlement portion of the budget, those aren’t Republican defeats. They are Republican victories.’”

Cole and Boehner are free to say that, but Sen. Bob Corker (R-Tenn.) knows better.  What the GOP will get out of their months of Provocation Theater will be, he says, “a tough vote.”

As the Post put it, “The misguided assault on the health-care law had diverted attention from more meaningful efforts to overhaul the tax code and rein in spending on Medicare and Social Security, he said. And now time has run out for achieving those goals.

“’Let’s just spell out what’s happened:’ Cole said, ‘We’ve basically blown the last two months with some of our members and a lot of the House focused on a shiny object that was never going to happen.’”

But, of course, the game isn’t over yet.  Bloodied, beaten, disgraced before an American voting public which has rarely polled so strongly their disapproval of the Republican Party, the GOP can’t wait to do it all over again.  For the next round of negotiations, their booby prize, they are clinging to their shameful tactic: they will once again hold the functions of the government and its full faith and credit hostage against new dates, in January and February 2014.

Let us say it one more time, civilly and quietly, in hopes that some Republicans might understand: a functioning government which pays its debts on time is something Americans want to believe in, not play with.