Robert Reich explains how big money is taking over the privileges of democratic rights, to the exclusion of ordinary people, and to the detriment of citizens who seek to exercise their basic civil liberties. The violence of police against unarmed civilians is absolutely inexcusable, and it is motivated in part by a systemic disregard for the value of the human individual, of basic rights, of citizenship and of the obligation public servants have to work for, not against, the people they are elected to serve. Says Reich: “WE NEED TO OCCUPY OUR DEMOCRACY.”

The above video shows the altercations leading up to the unprovoked macing of two women by an NYPD detective inspector, identified by online activists as Anthony Bologna, a finding confirmed by the NYPD itself. The incident has raised serious questions about what the planned response to the protests was, and whether there were orders in place for officers to intervene to halt the peaceful demonstrations. In the video, there are numerous incidents where individual officers, apparently acting in a disorganized and spontaneous fashion, physically strike, tackle, drag or pepper-spray unarmed civilians on a public street.

It is clear that police officers do heroic work in service of the public order, and that their active role in promoting the rule of law and keeping the peace is vital to the functioning of an open, democratic, civil society. But it is also clear that citizens cannot permit the justice system to be corrupted by undisciplined, unruly or even violent individuals who betray their uniform and their oath to serve and to protect the public. The NYPD is facing a decision, about whether to side with an absolute ban on unprovoked assaults of unarmed civilian bystanders legally entitled to both assemble and to use public streets for personal business or to condone the unjustified, unlawful physical assault of such persons by officers operating beyond their legal authority.

The choice is that stark, and the City of New York should make clear that there is no moral dilemma to consider: any unprovoked assault by an officer of the law against any unarmed civilian—including where the officer believed he was being forced to listen to uncomfortable words and slogans—must be treated as a violent, unprovoked assault, not as the lawful conduct of police business. All accused should be accorded appropriate due process, but unlawful physical violence against civilians cannot go unpunished if the rule of law and the integrity of the authorities of the City of New York are to be credible.

It is ultimately citizens, not agents of the government, who govern in the American system of democracy. It is citizens who have the higher standing before the law. Citizens are subject to reasonable prohibitions enacted in law, but so are law-enforcement officers. It is the law-enforcement officers whose freedom to act without deference to others is constrained by the Constitutional principle that only those powers specifically enumerated in the Constitution can accrue to the government.

No such provision exists for treating unarmed civilians as hostile combatants simply for walking on a public street, gathering to chant slogans, or discussing matters of controversy. In fact, numerous amendments to the Constitution specifically prohibit such actions by police.

The First Amendment guarantees the right to free assembly, to free expression and to petition the government for redress of grievances. For police to claim they were forced into violent acts because people expressed their views, gathered in public or voiced complaints about police activity, is as absurd as it is irrational. It is not a legal defense.

The Fourth Amendment protects the rights of all individuals against “unreasonable search and seizure”. Altercations in which police lay hands on unarmed civilians without legal just cause are incidents occurring outside the law, and which directly violate the Constitutional protection of civil liberties. Such incidents are an affront to due process and an abdication of any special authority under the law.

Any incident in which physical force is used to coerce behavior, coerce movement, retaliate for words spoken, or otherwise improperly seize control of the person or the property of any civilian, is an aggression against the citizens of the United States generally and against those individuals personally, and should be treated as a criminal act. We write with a spirit of genuine sympathy for the hard-working people of the NYPD, and for their normally world-leading professional service to the public. But we believe that as citizens, we all have a right to demand that no arm of our government ever be forced to undergo the shame and corruption of direct association with such unlawful behavior or such fundamentally undemocratic pretensions to unassigned powers.

The City of New York has an opportunity, provided by the nonviolent protest movement seeking to use purely peaceful, entirely lawful, strictly democratic means of protest, to show to the world what a genuinely stable, upstanding, and secure civil society does when there is widespread public dissatisfaction. The City of New York has an opportunity to show it stands with the people who comprise its body politic, the people who in fact govern and whose consent gives legitimacy to those who serve in government office.

The choice is clear: reprimand, suspend, investigate and punish—according to the evidence and the law—all acts of physical violence against unarmed civilians. Do this, and show deference to the rule of law, the virtues of a vibrant civil society, and the need for an active, informed citizenry. The soul of the City of New York is now on trial.

Today, the 20th of September, 2011, the discriminatory US military policy known as “Don’t Ask, Don’t Tell”, which required thousands of gay personnel to serve their country while keeping their private life secret. Honorable people were discharged only because someone else found out they were not heterosexual. In some cases, the ideal military officer for a highly skilled, difficult-to-fill position were discharged despite being the most qualified person for operationally vital positions.

“The strength of America is her ability to undo her faults,” said Alexis de Tocqueville. For nearly two decades, the United States military has lived with a law that hampered its readiness, undermined the shared trust of its service members, and threatened to ruin the professional lives of some of its most committed and selfless patriots. From today, those committed professionals and selfless citizen volunteers, will be able to serve honorably, and openly, improving the readiness and excellence of our military.

The repeal of Don’t Ask, Don’t Tell, ends a tragic example of prejudice ordained by federal law, and helps to restore the dignity and integrity of a nation of law, founded to uphold the equal, natural, universal rights, of all people.

The four coordinated hijackings, resulting in three deliberate attacks and one downed passenger jet, took 2,977 innocent lives and sowed fear and dismay across the world. They were acts of unconscionable evil intended to not only harm innocents and terrify the wider population, but to destabilize American democracy itself, and derail a people’s journey through history, possibly to erode its most virtuous contributions.

It was a clear, sunny morning and the first plane crashing into the North Tower of the World Trade Center had sparked a sustained global news flash, bringing hundreds of millions of eyes to the television footage. There was confusion and disbelief, and just as it was becoming clear there must have been a devastating loss of life, a massive fireball engulfed the top half of the South Tower, clearly signaling a deliberate terrorist attack was underway.

Less than 2 minutes later, the White House chief of staff told the president, then in a public event with schoolchildren, that “America is under attack.” A third plane flew into the Pentagon, headquarters of the US Dept. of Defense, while the fourth crashed into a field in Shanksville, Pennsylvania, after passengers reportedly made a fateful and heroic decision to rush the cockpit and take back the plane from the hijackers.

In the days after the attacks, it was often said such heinous acts would not be allowed to change our open, democratic culture or to reduce our commitment to moral leadership in the world. Pres. Bush made a visible, conscious effort to ask that no one treat Muslims or people of Arabic origin or descent, as anything other than members of an open, democratic society, as neighbors and possibly as victims, of the attacks.

But in the months and years that followed, the pressures and temptations inherent in legislating and prosecuting the war on terror drew the US federal government into planning and implementing policies that marked an appreciable and concerning detour away from many of our most cherished shared principles.

We have suffered, in the aftermath of the attacks, fully a decade of war. From the standpoint of an idealist democracy, or of just war theory, from the standpoint of a civilization committed to peaceful coexistence and negotiated outcomes, war is failure. It is the failure of peace, of the institutions of peaceful negotiation; it is the threat of a descent into chaos. War tests the moral fiber of a society more than any other experience.

In one of the most emotional and solemn of the speeches given to commemorate the legacy of those lost, Vice President Joseph Biden noted that “Never before in our history, has America asked so much over such a sustained period of an all volunteer force. I can say without fear of contradiction or being accused of exaggeration that the 9/11 generation ranks among the greatest our nation has ever produced.”

He spoke of 4,478 “fallen angels” who died in Iraq, another 1,648 who gave their lives in Afghanistan, over ten years, many of them in recent weeks, and the more than 40,000 wounded in both wars. Biden has visited the wounded soldiers many times, and said “I am awed not only by their capability, but by their sacrifices, today and every day.”

To this day, military strategists disagree about whether going to war as a response was a major strategic blunder. It was important, and positive, to oust the Taliban from power, to end the murderous regime of Saddam Hussein, but the unity and the worldwide human fabric of sympathy that grew immediately after the 9/11 attacks bled away as a politics of division and confrontation took hold.

Some professional politicians deliberately adopted the attacks as a “wedge issue”, and sought to paint rivals to their political philosophy or to their job security as enemies of the state. A naturally occurring sense of democratic, civic unity was replaced by a push for ideological uniformity. Many Americans began to feel, for the first time in their lives, as if dissent, or even critical thinking, was not welcome in the public discourse.

The very idea of engaged citizenship was challenged by a prevailing attitude of hardline politics, and for many, fear and suspicion. In retrospect, it may have been possible to depose the Taliban and to counter Al Qaeda, without ever going to war in Iraq, without adopting interrogation techniques borrowed from Cambodian death camps, and without giving in to the suspicion that due process was somehow a risky departure from the best service of justice in a free society.

In retrospect, there may have been better ways to channel the collective emotional upheaval that followed the attacks. Historians were already talking of how quickly the political capital of the moment was “squandered”, as less than two years after the attacks, an aggressive, unilateralist drive had totally overtaken American foreign policy. There was, for several years, a great risk that American democracy would be forever changed, and many of its most vital ideals eroded.

But today, in northern Virginia, Vice President Biden reminded us of something else: the attackers misunderstood the nature of the event they had planned and its likely impact on the nation they were targeting. While the risk was there that our culture could be comprehensively destabilized by the grief and anger that follow such an event, Biden suggested we were ultimately protected against that deviation by something Al Qaeda may never have understood:

With the fully restored Pentagon behind him, Biden intoned: “The true source of American power does not lie within that building, because as Americans, we draw our strength from the rich tapestry of our people.” He added that “The true legacy of 9/11 is that our spirit is mightier, the bonds that unite us are thicker, and the resolve is firmer than the millions of tons of limestone and concrete that make up that great edifice behind me.”

Biden explained the miscalculation of a small group of extremists who “never imagined” that the killing of 3,000 people would inspire 3,000,000 to volunteer for military service, to strengthen and defend a population of over 300,000,000. He spoke of the “sleeping giant” that was awakened by the shock and horror of the attacks. He was speaking not of a will to violence or retaliation, but of a spirit of aid to one’s fellow citizens.

In the hours after the attacks on New York City, a fleet of ferries, fishing boats, tug boats, small craft, commercial vessels and patrol boats, spontaneously gathered around lower Manhattan. The United States Coast Guard then sent out a message to “all available boats” to “report to Governor’s Island”. Hundreds of boats converged on the city to assist in the evacuation, arriving at what witnesses describe as astonishing speed.

After the North Tower collapsed into its footprint, engulfing lower Manhattan in a cloud of toxic dust, heat, smoke and debris, tens of thousands of evacuees—some injured, some in shock, many hysterical with panic, some just acting in service of those around them—were flooding the waterfront. Some were jumping into the water, despite the heavy boat traffic, desperate to get off the island and if possible swim to safety.

In what is now referred to as the great Manhattan “boatlift”, nearly 500,000 civilian refugees were evacuated in just nine hours. It was the largest evacuation by sea in history. By comparison, the legendary military evacuation of Dunkirk, during some of the darkest days of World War II, evacuated 350,000 French and British soldiers from France to Britain.

The great Manhattan boatlift was possible because conscientious citizen volunteers from across the region shot into action, heading into the unknowable dangers of an unprecedented disaster zone, risking their lives and livelihoods to help total strangers in desperate need. This was emblematic of a society infused with a strong sense of public trust and civic responsibility, where citizenship and shared destiny are implicit in our sense of who we are.

Ten years after the attacks of September 11, 2001, we have seen a spiritual recovery, in which people recognize that the values of such a society cannot be cast aside for any temporary sense of security. Our politics have seen a reversal, in which an unprecedented number of people voted, in 2008, for a politics of unity and civic engagement. And the hotly contested political campaigns have continued, with fevered disagreement over policy and ideology, but we can, perhaps say, that the freedom to disagree so vehemently is a celebration of the virtues of a free and open society.

Vice President Biden said to the families of victims today, “My prayer for you is that ten years later when you think of them, ten years later when you think of them, that it brings a smile to your lips instead of a pain in your heart.” There are many ways in which the legacy of the 9/11 attacks has long since been reclaimed from both the terrorists and the hardliners, and has come to inspire a commitment to service and shared responsibility.

Speaking of the bond between her family and the family of her brother’s great friend, coworker and fellow victim of the 9/11 attacks, Debra Epps today said, at the opening of the World Trade Center’s new 9/11 Memorial park, that the tragedy had brought the lesson that “People really do catch you, when you fall. It’s been a blessing.”

There are societies where unity in service of the civic space and one’s fellow citizens is a rare, if not unthinkable eventuality, and there are societies that are strong because free people naturally and voluntarily engage with each other with a sense of holding the civic space in trust, with a sense of commitment to the virtues and the vulnerabilities of their common humanity.

Ten years after the attacks of 9/11, the United States has been through many choices, many complexes of complicating choices, in response to the attacks. Many of those choices were controversial, and many have been reversed. Many curbs on civil liberties are still in place, and top officials disagree vehemently about whether there needs to be a trade-off between commitment to Constitutional protections of civil liberties and security.

Now, we enter a new period, in which withdrawal from Iraq and Afghanistan is already underway, a sometimes clumsy and always complicated process of nation-building is giving way to remote security actions, forceful “smart diplomacy” and a cooperative effort to prevent civil war in both countries. Osama bin Laden, and a number of “second-in-command” and “third-in-command” Al Qaeda operatives have been killed.

Some say the struggle against militant groups with “global reach” may be entering a more conscious deliberative phase, where the liberty-security tradeoff is not seen as being so economical. There is a hunger for reviving a less militaristic civic space, in which the cooperative voluntary citizenship of free people is the strength and the hope of a great democracy, in which the value of the service of millions of volunteers can be truly honored as an expression of their selflessness.

9/11 should, after this 10th anniversary, and in the aftermath of the deviation from and restoration of core values that we have undergone, become a national day of solemn recognition, collaborative restoration, and an affirmation of our civic space, in which citizenship is a sacred trust and human interest in the principal goal of our activity. It should be a day of national reflection and of the reaffirmation of the value of an open, democratic and voluntary civic space.

- – -

Cross-posted from Independents of Principle

Pres. Barack Obama, who with Sec. of State Hillary Rodham Clinton has managed a complex array of shifting diplomatic relations throughout the developing democratic awakening across the Arabic-speaking world, yesterday demanded that Syria’s authoritarian leader Bashar al-Assad relinquish power. Assad has engaged in five months of full-scale military attacks on unarmed pro-democracy demonstrators.

Obama and Clinton have been diligently working to build a global “coalition of condemnation” of the Syrian regime’s brutal crackdown of peaceful protest. Working to win support from China and Russia is crucial, because Assad’s regime benefits from trade with both nations, and substantive action to move Syria into a peaceful transition to democracy will require UN Security Council support for the democracy movement.

With Russia and China agreeing to the US and European demand that Syria end its military assault on demonstrators, Obama was able to say that only the hardline regime in Iran—which also used extreme violence to suppress a pro-democracy protest movement—continues to support Assad. That support for the demand to halt military operations, however, does not equate to a Russian or Chinese agreement that Assad should step down.

Today, Russia expressed opposition to the effort to force Assad to leave power. It is not clear if this opposition would translate into a vote to oppose official UN sanctions or whether the opposition would hold up if Assad continues the slaughter of unarmed civilians.

The government says its troops have pulled out of key cities where the protest movement has swelled its ranks. But protesters in Hama and elsewhere say live fire attacks are ongoing and the Syrian military continues to attack unarmed protesters and civilian bystanders. There are reports at least 17 civilians have been killed by Assad’s security forces today alone, even as he tells the international community he has halted military operations against civilians.

Hundreds of thousands of Syrian citizens are reportedly now planning to stage yet another massive protest against the Assad regime, which will soon see revenues declining as new sanctions take hold. The protest movement originally called for reform, but not the ouster of Bashar al-Assad. Assad’s reaction, using lethal force consistently, and over an ever wider area across the nation, killing literally thousands of his own people, has led to the demand that he resign and leave power.

The Syrian protest movement has asked foreign nations not to intervene militarily, because they want their movement to have the legitimacy of a non-violent protest movement. But spokespeople for the movement say the protesters support diplomatic opposition to Assad’s government and sanctions designed to cut off oil and gas revenues that flow to the ministry of defense, which is engaged in full-blown military operations against unarmed civilian demonstrators.

Syria may be the next of the pro-democracy protest nations to set up a transitional democratic council, to oversee an orderly transition to democracy. This has been done in Libya and in Yemen. The Libyan Transitional National Council has won international recognition as the official legitimate authorities in Libya, after Qadhafi military officers defected, explaining the dictator hard ordered ballistic missile strikes against crowds of demonstrators and Qadhafi himself threatened to annihilate the population of Benghazi, taking every man woman and child from their homes.

The Yemeni transitional council has not yet won support from the international community though there is talk that if Pres. Saleh—currently receiving medical treatment outside the country—does not follow through on his three pledges to step down, he may be detained, in favor of a coordinated effort to support the pro-democracy movement’s transitional governing authority.

A return to people-centered investment can motivate the flow of private capital

As I go back and look over what was being written about the economy, and the federal budget, the lost Clinton surpluses, falling wages, and the property bubble, throughout George W. Bush’s second term in office, it is clear the signs were there throughout that a major financial collapse was coming. Many observers, some more astute than others, predicted a correction was in the offing, without having to depend on very complex analysis.

In fact, simple arithmetic sufficed: there was not enough private wealth being generated in the Bush economy to sustain generalized economic growth. Millions of people were not earning enough to pay back what they owed. The mortgage industry was too reliant on refinancing to make existing loans payable—too often, the logic was: take out a second loan to pay your first. Cost of living was soaring while wages were falling, and Bush’s budgets were essentially pretending the two most expensive wars in US history were not real spending.

Now, in 2011, with the benefit of hindsight, we have learned that economic growth was substantially slower, at least in 2008, than we had previously thought. Some defend the Bush administration, saying the numbers could not be known adequately then, that the measures were flawed, or that we have expanded economic transparency generally since then, and so now know more than we could have then.

From The Economist:

ON DECEMBER 16th, 2008, President-Elect Barack Obama met in Chicago with key members of his economic team to discuss their response to the deteriorating economic situation. Just two weeks earlier, the Bureau of Labour Statistics reported that 533,000 jobs had been lost in November, after a decline of 302,000 in October. According to the latest output figures, the economy had contracted by 0.5% in the third quarter, and much worse was expected of the fourth. …

President Obama was inaugurated on January 20th, and a stimulus bill was introduced in the House of Representatives on January 26th. A stimulus package worth $819 billion passed in the House just two days later.

Two days after that, Americans received grim news about the economy: in the fourth quarter of 2008, GDP contracted at a 3.8% annual pace—the worst quarterly performance since the deep recession of 1982.

What we now know, however, is that those reports—which were the mathematical foundation for the American Recovery and Reinvestment Act, and the Obama administration’s belief that unemployment could be kept to 8%—were radical understatements of the economic chaos that was unfolding.

In fact, as The Economist report continues:

Output in the third and fourth quarters fell by 3.7% and 8.9%, respectively, not at 0.5% and 3.8% as believed at the time. Employment was also falling much faster than estimated. Some 820,000 jobs were lost in January, rather than the 598,000 then reported. In the three months prior to the passage of stimulus, the economy cut loose 2.2m workers, not 1.8m. In January, total employment was already 1m workers below the level shown in the official data.

When Obama was implementing the stimulus, the official numbers from George W. Bush’s administration showed negative growth in the third and fourth quarters of 2008 to be 0.5% and 3.8%, respectively. In fact, the reality, never shown to Obama or any top policy-makers in Washington until two years after the Recovery Act was law, was negative growth of 3.7% and 8.9% in the last two quarters of 2008.

Both of those figures were worse than anything seen in nearly 20 years. The fourth quarter decline of 8.9% was the worst since the double-digit single-quarter decline of 1957. And there were very good reasons to worry that GDP was being artificially inflated by anomalous activity: the Pentagon’s record budget, for instance, counts as GDP, but was far beyond any historically normal level, and with two concurrent wars, would eventually have to decline. (The recession of 1945, many believe, is attributable in part to the war-spending bubble deflating as the war came to an end.)

But the question then would have to be: what was really going on in the private-sector economy, if government policies were propping up GDP? Where was household wealth going to come from to fund the record, and rapidly expanding, debt Americans had taken on? How could people get this wealth, if it was not available through wages and other costs of living, aside from credit repayment, were rapidly escalating?

For trained observers watching financial markets, and who had some understanding of the “extreme investing” that was going on, and becoming mainstream, through complex mortgage-backed securities and credit-default swaps, it was clear huge swaths of the financial sector were essentially underfunded and could collapse. The property bubble, however, was visible, and was well understood—and discussed—by prominent voices as early as 2005.

The Economist magazine ran a cover story in June 2005, exploring what would happen “after the fall”, projecting a global collapse in real estate markets, severe economic fallout in Europe and the US especially, the contraction of private wealth generation for most people in those markets, and resulting budgetary shortfalls that could cripple governments and their ability to respond.

Part of the problem is the idea of GDP itself: it is a flawed measure of economic health and wellbeing, because sometimes expansion is illusory or somehow counterproductive, and contraction can be a healthy correction, resetting apparent values to where they actually lie. That something was wrong with GDP measures across the developed world was evident throughout Bush’s second term; what was not evident was how to get out of the mess without inviting economic collapse.

Is that, however, a defense of the policies enacted from 2005 to 2009? In early 2008, when George W. Bush introduced his federal budget proposal for Fiscal Year 2009, his last official budget, there was widespread concern the policies he proposed were reflective of and would invite more sustained economic malaise. He had built into the federal budget record deficits, but had not yet begun counting the wars in Iraq and Afghanistan as budget items—the fear was this would give a distorted impression of the nation’s fiscal health, and might conceal from key decision makers worrying revenue shortfalls that could hamper overall growth.

Interestingly, the longest recession since the Great Depression—it lasted 18 months, from Q1 2008 through Q2 2009—with such deep declines in GDP was over by the third quarter of 2009, Pres. Obama’s second full quarter in office. The GDP growth rates for that period were:

• Q1 2008: -1.8%
• Q2 2008: 1.3%
• Q3 2008: -3.7%
• Q4 2008: -8.9%

• Q1 2009: -6.7%
• Q2 2009: -0.7%
• Q3 2009: 1.6%
• Q4 2009: 3.8%

It is evident that the Recovery Act worked. Economic growth continued steadily throughout 2010, and is weaker now that the stimulus spending is beginning to wind down. There are mounting concerns that massive federal budget cuts will have a depressive effect on the economy, literally withdrawing hundreds of billions of dollars a year in economic output from the domestic economy.

For some, this is healthy and corrective. But to the average American household, it feels very much like a period of prolonged economic malaise. We can blame financial analysts, rating agencies and policy-makers, for creating the economic framework that ignored long-running pathologies and exacerbated the crisis, by using unfunded derivatives, rampant credit expansion, tricky accounting and record Defense spending, to conceal the clues, but it is more important to learn the lessons, to avoid doing the kind of things that impose crisis on ordinary working families and small businesses.

At present, the government has issued so many historic tax cuts, from 2001 right through 2011, that revenues are at historic lows, just 14% of GDP. Budgetary requirements, by contrast, are upwards of 22% of GDP. That is the cause of the record deficits, and much of it is about correcting course from a time of underfunded hyper-exploitation, in which the underpinnings of sustainable economic growth were eroded by flawed theories, flawed reporting of data, unsustainable borrowing and unwarranted gambles.

Total federal government revenue for 2010 was just $2.092 trillion, while GDP for 2010 was $14.66 trillion, so revenues amount to only 14.27% of GDP. With spending at $3.397 trillion, or 23.17% of GDP, there is a resulting stimulus shortfall to the wider economy. The deficits from the Bush years, which helped to conceal the gravity of the mounting economic crisis, have been passed to the Obama years. And now, with BEA revising its reporting for all GDP figures since 2006, in July 2011, it is clear the 2009 stimulus was less than was needed, not more.

The question is: if we were able to see the oncoming economic collapse years before it happened, but we are still living with the legacy of the policies that created it, how can we get back to the healthy growth of late 2009, early 2010, and avoid slipping into another recession? American businesses are sitting on record amounts of cash, and banks enjoy record low interest rates, to stimulate lending, yet neither are putting money into the economy.

A specific kind of policy course correction, then, is needed to motivate significant private investment in new industry, new technologies, and new jobs. It has to be the kind of policy that will not cost taxpayers a lot of money, that gets money from industry profits moving through the consumer economy, and which either before or after achieving that, results in the net creation of millions of new jobs.

There are few ways to achieve this, but there is real promise in the energy sector. Because energy is tied into all other economic activity, which means that virtuous adjustments to how we find energy, how we harvest it, and how we get it to consumers, will ultimately push a cascade of positive impacts through the economy.

According to the Carbon War Room:

Investing $1.3 trillion each year in green sectors would deliver long-term stability in the global economy, a new UN report has suggested. Spending about 2 percent of global GDP in 10 key areas would kick-start a global low carbon, resource efficient green economy.

Since the oil crises of the 1970s, billions of dollars have been pumped into technology development in the areas of energy efficiency, low carbon energy, efficient transportation, bio-fuels, and other areas. This investment has led to hundreds of breakthroughs that are today cost effective. Yet, full commercial utilization of these innovations and their financial rewards still elude us.

What is needed to deploy those breakthrough innovations is for private capital to come off the sidelines and motivate collateral investment in an overhaul of our outmoded energy sector. Clean, renewable energy sources will replace dirty, finite combustible fuels; the question is whether it happens sooner, bringing the economic benefits to more people at a lower overall investment cost, or later, putting off the moment of maximum opportunity.

In many ways, the legacy of the Bush years will be one of putting off the moment of maximum generalized economic opportunity. Much was done to slow the development of rivals to the fossil fuels sector, and unprecedented amounts of money were spent to protect, obtain and propagate the use of fossil fuels. Even the catastrophic deepwater BP oil well failure of 2010, with net cost impact estimates running as high as $100 billion, was the result of a culture of lax regulation and virtually non-existent safety and emergency planning, instituted by the Bush-era Interior Department.

That the signs of impending economic calamity were visible for at least four to five years before the financial collapse of 2008 is an indication of how urgently policy makers need to learn the lesson that all citizens are stakeholders in the outcome of our broader economic policy and that the work of government is to protect stakeholder interest, not shareholder interest.

A confusion of the two may be the leading philosophical driver of the 2008 collapse, as shareholder interest was thought to be inherently virtuous for wider economic prosperity. But in the hyperactive financial markets of 2001-2008, shareholder interest was too often served by practices that ran contrary to the wider interests of sustainable economic growth and generalized prosperity.

If we are to emerge from the Great Recession and its aftermath stronger and more resilient than we were when it set in, then we need to favor government policies that actively consider the stakeholder interests of citizens and incentivize private investment to work for the wider economy. The capture-and-hold profit-making of the Bush years was in many ways illusory and corrosive to long-term economic health; we need real investment, with resilient, optimizing impacts on the consumer economy, so that more people are earning, more people are spending, and more people are building assets and buying power to keep us secure against another collapse.

Recommendations: 

• To Solve the Debt Crisis, Rebuild the Middle Class
• Why We Should Have a National Infrastructure Bank
• Fee and Dividend: To Spur Job Creation, Industrial Boom

Perry touts Texas jobs record, promises to make government “inconsequential”

Today, three-term Texas governor Rick Perry announced his bid for the Republican presidential nomination, promising to foster innovation and enterprise. The speech offered no specifics, but Perry called for simplifying the tax code and promoting private business interests. In what may be the most striking and unusual phrasing of the speech, Perry promised, with passion: “I’ll work every day to make Washington, DC, as inconsequential in your lives as I can.”

Perry offered no plan for balancing the widening federal budget deficits, calling instead for what appeared to be a new round of tax cuts for business and decrying the American government as an institution that “takes too much” from its people. While short on specifics, Perry’s speech was a startling departure from what many believe to be the economic reality of the times: taxes are at historically low rates, revenues are so low, economists fear budget shortfalls are stunting economic growth, and Perry, who has left Texas with a $27 billion budget deficit is calling for cuts and for a radical rolling back of government.

The speech was in many ways like the speeches given by George W. Bush during the 2000 campaign, referring wistfully to the ideology of Margaret Thatcher, decrying the American government as intrusive and corrosive of free enterprise, and promising tax cuts that could lead to serious long-term stagnation for average household wages and the wider consumer economy. Perry attacked Pres. Obama, suggesting that his economic agenda—which has favored entrepreneurship, small business and innovation—is somehow the opposite of what it has been.

And in what appears to be a foreshadowing of Perry’s coming campaign of free-market rhetoric, Perry vowed to repeal Pres. Obama’s “one-size-fits-all government healthcare plan”—which, incidentally, does not exist and was never part of the Affordable Care Act. Perry’s rhetoric is tough, aggressive and ideologically deep-seated, but he will have to be far more disciplined about facts and solutions. Beyond that, he will have to grapple with the realities of both the healthcare law—already paying dividends in lower cost growth and popular among many who have benefited—and the budget—where he will not have the liberty to run up massive deficit spending to pay for new tax cuts.

Perry’s record in Texas is decidedly mixed: while he and his supporters have talked up the so-called “Texas miracle”, the miracle is in many ways an illusion. While there have been more new jobs created in Texas than in other states, unemployment remains high, wages have declined, most of the new jobs are very low paying, and immigration, including illegal immigration, which Perry has opposed, is considered to be the main source of growth in the Texas economy.

On energy, Perry’s record also must be of interest to voters: while Texas has more developed energy infrastructure than any other state, it is presently in its fifth “energy emergency” of 2011, and has had to resort to importing electricity from Mexico. This is in part because, while talking up his interest in renewables, and benefitting from a ground-up boom in wind energy production in his state, Perry has helped to impede the building of new clean energy infrastructure, favoring huge subsidies for fossil fuels production, making his state more vulnerable to foreign oil powers, price fluctuations, cartels and high fuel costs.

According to TIME Magazine’s Swampland blog:

In a report written for Perry last spring, Porter found that Texas’ overall prosperity growth, as measured by the rate of change in per capita GDP, was the eighth slowest in the country from 1998 to 2008. Texas has the highest proportion of minimum-wage jobs and the lowest median wage in the country. Porter found that Texas’ labor-force productivity was growing more slowly than 37 other states, further suggesting that the job-creation machine may not be keeping pace with productivity improvements in the rest of the country.

Perry offered no plan for taxes, war, healthcare, education, debt and deficit reduction, or economic recovery. In fact, his speech sounded much like it was intended to convey the message that he would call for aggressive austerity measures of the type that pushed the UK into a recession, after the were pushed through by David Cameron’s government.

In Texas, Perry has developed a reputation for being tough politically, but never truly popular with the legislature or with the people. He has won three consecutive terms, which many attribute to a kind of aggressive and hyperbolic rhetoric that is designed to obscure the realities of the public policy landscape, where his performance has not been as winning as he would like voters to believe.

His chief political adviser says Perry’s jobs record will make him the strongest possible Republican candidate to take on Obama, especially in a slow recovery with sparse job creation. But there are concerns about whether Perry’s record really stands up to scrutiny and whether once some of his more extreme positions become known, he might not appeal to moderates and to swing-state independent voters needed to win the presidency.

According to Politico:

One veteran GOP strategist said that multiple members of Congress had “expressed concerns about Perry’s ability to compete in not only the traditional 10 to 12 swing states, but also some of the lean-Republican states.”

The same state party chair, who spoke on condition of anonymity, voiced a worry that Perry hasn’t been “thoroughly vetted” and predicted: “If he’s the nominee, the first thing the White House is going to do is make an issue of secession.”

Perry’s 2009 comment — he said he didn’t want to “dissolve” the Union, “but if Washington continues to thumb their nose at the American people, you know, who knows what might come out of that?” — is already the most famous black mark on his political resume.

Republican operatives have reportedly expressed worry that he is a “bombastic regional politician” who is not equipped to appeal to the governing priorities the majority of the country want to see. They worry that his extremist rhetoric, threatening secession if he were to disagree with Washington policy, calling for war against Mexico, will persuade most voters that Perry might be dangerous distracted by ideology and by personal obsessions, and not focused on serving all of the people.

Perry’s campaign announcement speech did little to calm those worries, and in fact may have exacerbated them. There is analysis that suggests Perry’s early moves will determine primarily whether the “smart money” starts to flow in decisive amounts to frontrunner and reputed moderate Mitt Romney, or whether a competitive Perry will dilute funding and support among a wider number of candidates, undermining the party’s chances to defeat Obama—the most prolific fundraiser in US history.

Perry’s “rogue” status may also work against him. While some believe a tough, “truth-talking” cowboy image will appeal to voters who are tired of the nuance and maneuvering of so many Congressional factions, others say Sarah Palin’s struggle to draw interest for her film or for a potential candidacy is a general fatigue with the very idea of a “rogue” candidate.

After a great deal of media hype, during several weeks, Gov. Perry announced his candidacy from South Carolina, on the day of the Republican Straw Poll, in Ames, Iowa, and Perry supporters can write in his name in Ames, if they support him. If he fails to show in the top half of the list of candidates, at the very least, there will be questions about his appeal to voters outside of Texas and the south.

Unlike Huntsman and Romney, who have set themselves up as problem-solvers, Perry seems to be betting his campaign on Bush-era Republican ideology and his record in Texas. The Obama campaign is almost certain to set itself up not as the “big government” campaign, but as the “good government” campaign. Perry’s attacks on the very idea of government playing a constructive role in the economic landscape may unnerve voters in the vital center of the ideological spectrum.

TheHotSpring.net :: The debt crisis is attributable to “structural” causes, meaning the way the nation’s financing is structured over the next several decades, but also to political and economic causes, meaning both the way we make policy and the way we live and experience the marketplace for trade, credit and consumer purchases. So, we need to implement policies that make serious, sustainable corrections on all three fronts.

Most of the Republican candidates for their party’s presidential nomination debated last night in Iowa, two days ahead of the crucial Ames Straw Poll, thought to be a leading indicator of which candidates are credible and which are less likely to win in January. Rick Perry, who has not yet announced his candidacy, was not in attendance, and Fred Karger—who met all the criteria for attendance—was not allowed to participate, some say because he is openly gay.

The questions were direct, tough and probing. Challenged on her claim that she could turn the US economy around in just three months, Michelle Bachmann fielded the first of many tough questions. She backtracked somewhat, claiming that she could not fix the economy in three months, but that she could enact policies that could eventually have a positive impact. She then trailed off into a “one term president” rant against Obama, which opened her to the critique that her policy plans lack substance.

Mitt Romney attempted to deliver an economic-policy stump speech. He launched into a Republican talking point, calling for a steep reduction in “corporate tax rates”, which are either the lowest in the industrialized world or the highest, depending how they are defined. He called for energy independence, suggesting new drilling, but not openly saying so, and vaguely said we need “the rule of law” to shore up our economy.

Romney’s reference to “rule of law” struck many as odd and off-topic, in part because the Obama record has been one of trying to force major corporate interests to follow existing law and end the regulatory non-action of the Bush years. But Romney’s meaning was far more likely to be about taxes: he has been facing criticism for having “raised taxes” while governor of Massachusetts, but has said he was able to bring in “new revenues” by “closing loopholes”, i.e. enforcing the law.

Former Minnesota governor Tim Pawlenty got off to a very rocky start, showing either plain ignorance of active government policy and recent political history or a willingness to tell very big fibs in order to make difficult rhetorical points—alleging that Barack Obama has never presented a plan to reform Medicare. The Patient Protection and Affordable Care Act—which Pawlenty likes to call “Obamneycare”—included Medicare reform specifically designed to cut $500 billion of “waste, fraud and abuse” from Medicare, without reducing benefits or access to care.

In fact, while it achieves those cost savings, it also establishes that no insurance managers, public or private sector, can interfere with doctor-patient decisions on appropriate course of treatment. So Pawlenty missed the mark dramatically, while saying little about his own plan, getting the facts wrong and leading research-minded voters to look up Obama’s already in place and very specific Medicare reform plan. The president has called for an expansion of that reform plan, again without cutting benefits.

Rick Santorum announced his plan to “cut the corporate tax rate to zero, for manufacturers”, and he did so with a smile, as if anticipating major new corporate financing for his campaign. Santorum seemed eager, throughout the night, to glisten with new ideas of this kind which he hoped would capture new support and new momentum, going into Saturday’s straw poll.

Chris Wallace—who consistently asked aggressive, difficult questions—asked Pawlenty if Bachmann was really unqualified, as he had claimed, and had no achievements, but he added the quip that Pawlenty might be attacking her simply because “she’s beating you in the polls”. Pawlenty repeated that her record is simply lacking, that she has no accomplishments at all as a legislator.

Referring to the Bachmann’s catch-line that she has a “titanium spine” and will never relent on her ideological demands, Pawlenty said “It’s not her spine we’re interested in; it’s her record of achievement.” He then addressed her directly, saying “If that’s your view of leadership with effective results, please stop, because you’re killing us,” implying that by sabotaging deals that get much of what Republicans seek, she is losing the wider policy war for the party.

Romney faced his toughest question when he was challenged on his record at Bain Capital, which acquired American Paper, closed two plants, and imposed 2,000 layoffs. Romney says not all of the companies Bain invested in while he was there worked, and so some had to fail. He sought to paint this record of experience as an education in what works to allow businesses to grow and create jobs, but he offered no specifics on how that education would play out in presidential policy.

Wallace asked Gingrich if his record on the campaign trail—top advisers resigning en masse—shows he is not fit for the presidency. Gingrich bristled and decried what he called “gotcha questions”. He criticized the press corps generally, for focusing on “campaign minutia” and ignoring the basic ideas that distinguish Republicans from Pres. Obama.

He made the most specific policy suggestion of the evening, saying the government should make “Lean Six Sigma”—a combination of Toyota’s Lean manufacturing model and Motorola’s Six Sigma production process—the national manufacturing standard.

He asked Huntsman if his record of service as Barack Obama’s representative to China means he is not a true Republican. He said he is proud to serve and that when your country calls, you step up and serve. Huntsman repeated throughout the night that he is proud of his record of public service and that he believes that experience is the best sign that he is prepared to be president.

Herman Cain was asked if his extreme statements—like calling on communities to ban mosques—and saying he knew little about the war in Afghanistan made him too ignorant to be president. Cain seemed to agree with Gingrich’s critique of unfair questions, and said he has learned, that as a businessman he knows the ability to learn and to develop more complex understanding of such complex issues makes a good leader.

On immigration, Cain said legal immigration is the already existing and appropriate “path to citizenship”. In what might be his most memorable remark of the campaign, he artfully threaded the needle of ethnic and ideological tensions relating to immigration, saying “America can be a nation with high fences and wide open doors.”

Gingrich took an extreme tack to the hard right, calling for moving millions of people to the southern states to police the borders, the establishment of English as “the official language of government”—a radical position that ignores the First Amendment and holds that we will not inform anyone who does not understand English of their rights, or what they may need to do in an emergency.

Gingrich also added that he would “distinguish between people who have been here a very long time and people who have come more recently”. This last comment seemed to some to mean he would allow for something like amnesty for those who have been here longer, while others were chilled by what seemed to be a nativist rejection of immigrants’ rights.

Romney was asked about how he used new revenues to fix the Massachusetts state budget, and whether he would raise taxes to balance the budget. By simple arithmetic, it looks nearly impossible to balance the federal budget any time soon without raising taxes, but Romney defended his record in Massachusetts, explaining that he balanced the budget every year, and that he only needed to close loopholes, not to raise taxes, while imposing sharp cuts.

Pawlenty was asked about his having increased the cigarette tax in his state, in order to balance the budget. He made reference to whether it was a “fee” or a “tax” and to court rulings on the subject, and said he would later regret having done it, but it seemed clear that this was instrumental to his budget policy and a sticking point that could be to his favor or to his disadvantage, depending on whether GOP primary voters include the majority of Republicans who favor raising revenues to balance the budget.

Bachmann said she had opposed the cigarette tax hike, when she was in the state legislature, and that she was determined not to support it. But she did in fact vote to increase the cigarette tax. She claimed Pawlenty forced her to do so, by attaching a rider that would “protect the rights of the unborn”, so that she was forced to choose between voting against rights for the unborn and voting to raise taxes.

Bachmann said her view was that you can get things wrong when it comes to money but not when it comes to life. The exchange, however, seemed to play into Pawlenty’s argument, that he is better at getting results than Bachmann, who is a hapless prisoner to her own ideological priorities, and who—despite this, and contrary to what she says—will vote against her principles.

Rick Santorum, former senator from Pennsylvania, appeared to agree with Pawlenty’s critique of Bachmann, saying that a leader needs to know how to get a good deal and get results. Santorum sought to tout his record of “leadership” at the state and federal level, and argued that he was better able to serve the conservative ideals than Bachmann, because he knows how to negotiate.

When the question was posed if the candidates felt so strongly about opposing any increase of any kind in tax rates, would they oppose even a deficit reduction deal that made $10 in cuts for every $1 in new revenues, every member of the debate panel raised their hands. After-debate analysis suggested this moment may become “iconic”, indicating that the Republican party is only interested in tax cuts, not in deficit reduction, fiscal responsibility or protecting Medicare and Social Security.

The image of the Republican candidates dutifully—some with reluctance—raising their hands to support Grover Norquist’s radical anti-tax pledge could become the signal moment of the primary campaign, when Republican candidates announced their intention to enforce the tea party radical position of obstructing deficit reduction in order to prioritize tax breaks, at a time of historically low tax rates, perilously low revenues and escalating debt.

Santorum took issue with Ron Paul and Michelle Bachmann’s reference to the 10th Amendment, and the question of states’ rights, saying their theories were “the 10th Amendment run amok”, and that “Our country is based on moral laws, ladies and gentlemen. Abraham Lincoln said the states don’t have the right to do wrong.” It was a moment of passion and principle that stood out, but which will require Santorum to make clear how he would deal with issues like same-sex marriage or abortion, where prevailing law conflicts with his views.

Asked about the entrance of Rick Perry into the race, Ron Paul said Perry “represents the status quo” and that he will make Paul’s own unique views stand out more. Herman Cain agreed, saying Perry would dilute the vote for “politicians” and make his business record stand out. Bachmann said there is room for another conservative in the race, though many strategists believe Perry will cut into her vote-getting ability.

Newt Gingrich was asked if he has a clear vision of what should be done in Libya, after taking two diametrically opposing views within a few days, at the start of the conflict. He said he recently spoke to Gen. Abizaid, who speaks Arabic, is one of the foremost security policy experts on the region, and who said we have a “strategic deficit” that needs to be closed through intelligent, persistent diplomatic engagement.

In what is perhaps an interesting angle, politically, Abizaid has been a supporter of the Obama administration’s diplomatic efforts in the region, which taken with Gingrich’s characterization of the state of affairs, suggests the Obama administration’s policies are potentially closing that deficit.

Gingrich did not offer a clear policy position on the current situation in Libya, but complained that the press were criticizing him for Pres. Obama’s having coordinated a humanitarian crisis response in Libya.

Huntsman was asked what it meant that China has been hacking into US corporations and US government servers. He said he has long experience with China, and believes the United States needs to have a robust, informed, collaborative and secure relationship with the rising world power. He also said it would be naïve to expect China not to behave like a rival, and that we nee a president who understands the relationship.

Ron Paul decried sanctions against Iran, saying that military threats and sanctions are precursors to real military conflict, costly policy mistakes and would only worsen the security situation worldwide. Paul believes that foreign wars that are not of absolute defensive necessity are contrary to democratic values, undermine the principles of liberty and create enmities that would continue to threaten US interests far into the future.

Cain was asked by Wallace about his comment that US energy independence would be the best way to prevent Iran from obtaining nuclear weapons. The suggestion was that it might be irrational to claim that drilling for oil in North America would persuade Iran’s hardline regime not to develop nuclear weapons. Cain explained that he views economic policy as one element of a complex foreign policy, where economic pressures can be brought to bear to incentivize the behavior of even extreme governments.

When Ron Paul was asked why he disagreed with Michelle Bachmann’s view that accused terrorists should not have due process rights, he said “she turns our rule of law on its head.” Paul explained that for individuals accused of terrorist activity to be treated as terrorists, “They have to be ruled a terrorist. Who rules them a terrorist?” He said the Constitution requires due process and a court ruling based on evidence. Bachmann, he said, is rejecting the rule of law and the traditions of American democracy, instead proposing “mob rule”.

Santorum said that under the regime of the Shah, the Iranian people were “free”—disregarding the police state, disappearances and torture used by that regime. He then complained that the “mullocracy” in Tehran “tramples the rights of gays”—a remark that surprised many, given his relentless pursuit of a national ban on same-sex marriage.

Gingrich was asked why he proposed a “loyalty test” for any Muslim that might serve in his administration. He said he would impose a loyalty test on every person who would serve in government, but gave no specifics as to how that test would be carried out. He cited incidents of Cold War espionage, where people that seemed above suspicion turned out to be foreign spies, and one case where an alleged terrorist conspirator said he “lied” when asked how he could take an oath of loyalty and then behave as America’s enemy.

Herman Cain was asked what it was he believes southerners “find objectionable about Mormonism”? He said that he, personally, has no problem with it, but that he believes many southerners simply don’t understand how Mormonism fits into the culture of protestant Christianity that they are familiar with.

Asked about her having said she hated her husband’s idea that she should study tax law, “But the Lord said, be submissive. Wives, you are to be submissive to your husbands,” Rep. Bachmann seemed genuinely embarrassed and stunned. She paused for an uncomfortable length of time, then offered the explanation that she meant by this term “respect” and that her husband respects her as well.

Romney may have waded into waters that will hurt him in the general election, when he shed the moderate tone of his campaign, saying “our marriage status relationship should be consistent at the national level” and he supported a national law to define marriage as between a man and a woman. He justified this by expressing concern that some same sex couples might have a hard time divorcing if they are in states that have different marriage laws from those where they married.

Huntsman supports civil unions, and spoke of “reciprocal beneficiary rights”. He said “I believe in traditional marriage, but subordinate to that, I believe that we haven’t done a good enough job at equality.” This helped to define Huntsman’s position as the true moderate conservative in the field, and a pragmatist. Many critics have been wary of the conservative candidates’ unwillingness to admit that any injustice could be in need of correction that does not need conservative ideological solutions.

Paul took a position that many find hard to grasp, given his arch-libertarian tendencies. He said “just so long as they don’t impose their vision of marriage on you”, that his priority was to ensure that no one had their private life defined by the government. This was in line with his libertarian principles, but he also specified that he believes marriage should be between one man and one woman, a concession to the conservative ideology he is known for criticizing.

Bachmann offered the awkward statement that “I have an absolutely unblemished record when it comes to this issue of man-woman marriage”. She has not supported same-sex marriage, certainly, but there have been questions about “blemishes” to her record, including alleged support for the extreme and discredited “treatment” option of prayer to cure homosexuality. Questions have also been raised about whether she and her husband have been spokespeople for this policy.

Romney may have made his most significant slip-up of the night—in line with his statement the previous day that “corporations are people”—when he said that “We’ve got to find a way to reduce our spending on a lot of anti-poverty programs”. He said this in responding to a question about whether he would extend unemployment benefits.

Romney has sought to blame both general economic pathologies and the president’s policy response for prolonged unemployment, which would suggest those who are suffering the impact are not in any way responsible for their predicament, so his admonition that in times of economic hardship the government should roll back its anti-poverty efforts seemed more than a bit awkward.

He said he would “go to Congress with a new plan for unemployment benefits”, but that he would not extend the current program of unemployment benefits. He was not pressed on what he would do should Congress fail to give him the option he prefers.

Huntsman took issue with the regulatory system and made what might be his most immoderate policy assertion of the night, saying that “If you want to build a facility in this country, you can’t, because of the EPA’s regulatory reign of terror“. He was defending the Huntsman company’s chemical operations, and by implication was suggesting chemical plants need more leeway to release dangerous toxins into the environment.

The use of the phrase “reign of terror”—a reference to the French revolutionary period and a campaign of torture and mass execution of “enemies of the revolution”—echoed the much maligned rhetoric of bloodshed and exaggeration increasingly used by Republicans since the summer of 2008, and through the 2010 elections. Huntsman did not backtrack, but repeated his allegation of a “reign of terror”, without giving any specifics about how that “terror” was imposed.

Newt Gingrich was asked to explain why he does not favor Ron Paul’s demand that the Federal Reserve Bank be “abolished”. “Having some sort of central bank”, he said, is necessary for dealing with the money supply “in the modern world”. He added, “I think the fact that the Fed is secret is a scandal” and repeated his demand that the Federal Reserve Bank be audited, that its books be open to public scrutiny.

Ron Paul celebrated what he called an awakening of the mainstream to the need to audit the Fed, but said we need to phase out the Fed, and that it is important to “understand the business cycle” in order to prevent recessions.

On education, Huntsman was firm, saying “No Child Left Behind hasn’t worked for this country; it ought to be done away with.” He called for a greater emphasis on governance at the local level, and said there is no one so interested in schools succeeding as the communities they serve. Herman Cain seconded this response, saying he would abandon NCLB and focus on local control of schools.

Huntsman added that he stood against letting the nation default, because the United States is 25% of the world’s GDP and by far the largest financial services industry in the world. This was a critique of the radical factions in his party, including Bachmann, who have said that they believe default could be beneficial for long-term fiscal solvency, acting as a kind of spur to activate serious budget reform.

The debate showed new rifts between and among the candidates and allowed them to stake out certain clear positions: Gingrich emerged as the “ideas” candidate, demanding that everyone focus more on ideas and less on rhetoric, style and the “minutia” of what goes on along the campaign trail. Romney sought to remain largely above the fray, and managed to do so, but gave few specifics. Ron Paul staked out a position of radical reform, in language many voters support.

Herman Cain talked up his business record, but mostly offered what he considered common-sense ideas. Rick Santorum promised bold leadership, offered some radical positions on taxation, and confounded some of the most problematic critiques of his ideas. Huntsman stood as the principled moderate, and a conservative problem solver.

Bachmann was on the defensive, but was poised; she moderated some of her most hardline views, but gave few specifics. Pawlenty became something of an attacker, and began what could be the most effective argument for his campaign: getting things done. It was not clear if anyone “won” the debate, though Romney, Bachmann and Gingrich were all given praise for their demeanor, for different reasons. Pawlenty may have made a dent in Bachmann’s armor, however, and some now expect him to be a tougher campaigner.

- – -

Report and analysis from Independents of Principle

Wisconsin is holding six recall elections tonight in response to popular petition to unseat Republican state senators who supported Gov. Walker’s plan to strip public servants of their collective bargaining rights. Each of the six Republican incumbents occupy senate seats representing districts drawn by Republicans to ensure Republican victories, so any victory represents a significant shift in party preference.

The Democrats need to win three seats in order to take control of the state Senate, and deal a serious blow to Gov. Walker and his allies in the state legislature.

As of 10:02 local time, the Republicans had saved three seats:

• In District 2, Sen. Robert Cowles defeated Nancy Nusbaum—59%-41% (94% reporting).
• In District 10, Sen. Sheila Harsdorf fought off the challenger Shelly Moore—58%-42%.
• In District 14, Sen. Luther Olson defeated Fred Clark—52%-48%.

In the other three races, the story was more favorable to the Democratic challengers:

• In the 32nd district, challenger Jennifer Shilling was leading incumbent Dan Kapanke by 8 percentage points.
• Incumbent Randy Hopper was leading Jessica King by 2, separated by just 500 votes, with King’s base of support in Osh Kosh yet to report.
• But most significantly, Walker ally Alberta Darling—for whom Republican supporters and outside groups spent at least $8 million—was trailing Sandy Pasch by 8%, though there were still some very favorable areas for Darling yet to report.

Just a few minutes later, with 87% reporting, Jessica King had pulled ahead of Randy Hopper by 137 votes.

At 10:08 pm, Democrat Jennifer Shilling became the first challenger to unseat one of the recalled Republicans. John Nichols noted that Dan Kapanke was elected during the Obama landslide election year, and has been removed for office after voting to strip public servants of their organizing rights.

The race between Pasch and Darling shifted quickly, as Pasch first widened her lead, then ceded ground, leaving the race too close to call:

• By 10:11 pm, Sandy Pasch was holding her lead over Alberta Darling by a margin of 55% to 45%, and King and Hopper remained too close to call.
• By 10:18 pm local time, with 57% of the votes counted, Pasch was leading Darling by a margin of 58% to 42%.
• But just two minutes later, with the latest reports showing 63% reporting, Darling had closed the gap to 51% to 49%.

At 10:20 pm, Jessica King was leading incumbent Randy Hopper by less than 200 votes, with 87% of the votes counted. There are concerns that irregularities that occurred during state Supreme Court elections earlier this year might be repeated in some pro-Republican areas. Observers have suggested a Pasch win would be a major defeat for the Republicans, while local Democratic organizers remained confident King would pull ahead of Hopper when the number from Osh Kosh came in.

At 10:30 pm local time, Pasch was holding her lead over Darling, 51% to 49%, leading by a margin of fewer than 1,000 votes.

At 10:38 pm, with 97% of precincts reporting, Jessica King was leading Randy Hopper by 27,123 votes to 25,951—51% to 49%. In District 8, with 67% of precincts reporting, Pasch was leading Darling 52% to 48%, by a reported margin of roughly 1,200 votes.

At 10:39 pm Wisconsin time, in District 18, Jessica King was named the projected winner, becoming the second Democrat to unseat a Republican state senator for supporting Gov. Walker’s anti-union agenda.

- – - 

Suspicion of irregularities: Shortly before 11:00 pm local time, with 68% reporting from District 8, Sandy Pasch was still leading Alberta Darling by a margin of 51% to 49%, but the vote counting reportedly stopped.

Think Progress is reporting that Waukesha County would be providing no further results for at least an hour. The announcement is reminiscent of what has occurred in multiple past elections, where similar stalls in the release of vote counts immediately preceded the “discovery” of new votes that swung a tight election toward the Republican candidate.

The county clerk, Kathy Nickolaus has become known for her involvement in these alleged irregularities, and tonight there has been fast and furious criticism of her handling of elections, her party’s tolerance of what is seen as a deeply flawed track record, and of what appear to be new irregularities.

At this hour, there are mounting concerns that a county official with a history of being involved in irregularities that shift the vote toward the Republican party might interfere with the integrity of the election. One Wisconsin member of the House of Representatives called on the United States Dept. of Justice to investigate the irregularities that took place earlier this year.

With the history of manipulations, allegations of criminal election fraud, and the balance of power in the Wisconsin state Senate at risk, it is suspected that irregularities may be in the works. Democratic State Sen. Jon Erpenbach said it was “ridiculous” that the local county officials stalled the count, because they are using the exact same machines used throughout the state.

At 11:12 pm local time, the news broke that with 79% of local precincts reporting, the incumbent Alberta Darling had taken the lead, by a margin of 52% to 48% over challenger Sandy Pasch. At 11:19, with 80% reporting, Darling widened her lead to 53% to 47%.

Sen. Erpenbach expressed concern about the integrity of the election process in Waukesha County. Mike Tate, chairman of the Wisconsin Democratic party, issued a statement shortly after the sudden swing to Darling, suggesting there is now evidence of election tampering and a serious need for a closer look at what has taken place at the county clerk’s office in Waukesha County.

- – -

At 11:31 pm local time, with 82% of precincts reporting, Darling was leading 53% to 47%. After the back and forth swings throughout the evening, the consistent 53% to 47% reporting sparked still more suspicion of irregularities.

— Wednesday, August 10, 2011 —

At 12:36 am, local time, the AP called the election for Alberta Darling, with observers split over whether the recall election had been conducted legally. In Waukesha County, the county clerk has been accused of manipulating the release of ballots, and there are mounting calls for a federal criminal probe.

At 7:41 am, local time, with 100% of all precincts reporting in District 10, the vote count was 39,471 to 34,096, giving Darling a 54% to 46% victory over Pasch. Some Democratic party members have softened their criticism of Waukesha County clerk Kathy Nickolaus, while others are alleging election fraud.

creative prosperity is sustainable prosperity

To build a future of vibrant open democracy and robust and sustainable economic prosperity, it is necessary to privilege creative activities and constructive solutions to the challenges we face. Addressing major challenges in constructive, innovative ways, is the single most significant driver, historically, of sustained economic booms. In short, we need to move deliberately and swiftly toward a creative prosperity agenda.

The first consideration, then, is to examine how the creative prosperity agenda would differ from what we are doing now. At present, we are wrestling with the complex fabric of consequence related to long-running economic distortions, most of which we have not yet corrected. Healthcare reform and financial regulatory reform were comprehensive in scope, but moderate in impact, cautious and rooted in the prevailing model; energy reform needs to move forward rapidly and do more to prioritize innovation.

We are facing a major, civilization-wide transition from one way of conceptualizing political and economic power to another. We stand at the dawn of what should be the global solidification of open democracy as the standard for elevating and defending human dignity and freedom of thought. But we need to build creative prosperity into that future, and this will require a fundamental shift in the dominant view which holds that power is more effective when concentrated in fewer hands.

That view comes from ancient times—from prehistoric times, in fact—when the governing principle of human life was the need to survive in competition with forces far more powerful than any one individual, family or band. Power, then, was a combination of accumulated resources and raw force. In that light, power is a destructive force, requiring intense concentration of resources and the ability to draw a line between the inside and the outside of the power circle.

the feudal (concentration) model

Economically, the fact of human society was that there was not enough technology, enough resources, enough liberty, to deliver real comfort to most or all people. In fact, there was only the material wealth to deliver substantial comfort to about 1 in every 100 people. The model of concentration allowed those in that 1 percent to cling to comfort and fight off would-be attackers.

The only way into the circle in which power, means and comfort were concentrated was to pay the toll for access. That might be done by force of arms, or by handing over significant sums of wealth. Paying the toll perpetuated the model, and won significant privileges for those who helped to make sure that system remained viable.

This developed eventually into authoritarian empires and the medieval elevation of aristocracy. The logic of the model of concentration held: those inside the circle must remain there, and the society must be organized to keep them there. They were, it was presumed, worth more than other people, and so they were able to treat their privilege as if it were part of a life of service—maintaining law and order—to those with less.

the democracy (decentralization) model

Modern democracy posits an entirely different model: the model of decentralization. Modern democracy, according to the ideals of the American revolution and the French revolution, requires a comprehensive departure from the status quo of feudal dominance. It requires the engineering of a model for economic and political activity whereby power cannot be concentrated, and where excessive concentration of power brings disadvantage.

A creative prosperity agenda for public policy and economic renewal would put aside the bias of the old model, once and for all, asking enterprises large and small to join together in a fabric of imaginative competition, prioritizing localization, innovation and service value to the marketplace. It would help to recapture the energy of modern democracy, wherein monopolies and juggernauts sputter and trudge, slowed by their weight, and individuals and small businesses are better able to take the field, to effect positive change, to feed a generalized economic expansion.

The key to that model is the vibrancy of an expanding and upwardly mobile middle class. Achieving that means doing what the United States did so effectively in the 1950s and 1960s, decentralizing the levers for creating wealth, allowing more free people to participate not only as citizens but as leaders and entrepreneurs.

losing our former focus on creative (decentralized) prosperity

A period of intensive deregulation in key industries has led the United States’ economy into a period of prolonged slow growth, because it has led to the hyper-concentration of wealth and of access to the levers of wealth-creation generally. Average household income has dropped by about $2,500 since 2000, even as the gap between average pay and the earnings of the wealthiest has expanded to historic highs.

There is a problematic knock-on effect of this, which is that innovation is no longer a priority, as major conglomerates seek first of all to secure their position. Upstarts like Apple are not emerging at the rate they were during previous periods of economic expansion, and the most powerful, most concentrated interests—Apple now among them—are controlling the field of play.

recapturing momentum: how to build a creative prosperity agenda

There are a couple of key changes that need to take place to move toward a creative prosperity agenda:

1. Move from a bias favoring large conglomerates to one against them;
2. Move away from subsidies for high-polluting, low-yield fossil fuels;
3. Move toward clean energy technologies that favor rapid innovation, brainy startups, more robust job creation, and local economies;
4. Revive national commitment, public and private, to infrastructure redevelopment;
5. Provide direct tax credits for real job creation (payable on a per-job basis);
6. Establish sustainability incentives for municipalities (ref: Sustainable Jersey), states and businesses;
7. Establish an aggressive Renewable Portfolio Standard;
8. Prioritize higher education spending, including post-graduate studies incentives for businesses looking to sponsor their employees;
9. Introduce critical thinking, macroeconomic studies, engineering basics and public policy debate, to public high schools—judge these as more valuable than test scores;
10. Make sure tax reforms are not regressive; make sure they prioritize family and community-level “thriving”, i.e. asset-building, quality of life and spending power;
11. Tax derivative financial instruments at a higher rate than direct capital investments in enterprise, innovation and hiring;
12. Apply national policy to correct market distortions relating to fossil fuel costs.

The outcome of this process of reform would be:

• accelerated, more widespread innovation;
• entree for creative small business models;
• unprecedented opportunities for sustained hiring;
• more vibrant, resilient local economies;
• a consumer-centered smart electricity grid;
• cleaner air and water;
• a sustainable economy where growth is not tied to the promotion of vast negative externalities;
• more robust civic engagement from citizens, communities and creative thinkers…

The United States is perfectly capable of achieving this kind of virtuous cycle between democratization, decentralization, creative thinking, entrepreneurship and the expansion of the middle class. But substantive policy changes need to be made—to remove the incentive for corrosive activities that favor the unhealthy concentration of wealth and productive capacity and motivate the revival of generative activities that favor the healthy decentralization of assets and productive capacity.

A vibrant middle class—where the best ideas can come to the fore and be implemented and the dignity and worth of citizens and communities takes priority over the naked pursuit of profit—is better suited to fostering creative, sustainable prosperity. The first step is to recognize where we favor profit over people, and then work to change the prevailing model and free human creative talent to achieve that goal.

Critics express concern Perry is supporting groups that promote hate, seek a totalitarian theocracy to replace Constitutional system

There is dispute as to whether attendance at Gov. Perry’s prayer rally was 30,000, as organizers claim, or 15,000, as other news sources have estimated. Observers have expressed concern that the event featured radicals whose views oppose the constitutional order of the American political system, and who have called for the establishment of an absolutist theocratic regime.

The following report from Suite101 is indicative of the concerns being expressed by people across the political spectrum:

Possible 2012 GOP candidate Rick Perry was a hit with the 15,000 gathered for August 6, 2011 prayer meeting held in Houston.
Rick Perry, who is eyeing a run for the Presidency in 2012, may eventually have to distance himself from his more extremist Christian supporters. The trouble is that Perry needs the support of the American Family Association, which sponsored Perry’s allegedly non-political prayer meeting called The Response. An even more troubling possibility is that Perry may be in full agreement with their Reconstructionist plan to take down the Federal government and create a U.S. theocracy, under Biblical law.

Christian Extremists

The idea that Christians should physically overcome their enemies and rule in righteousness is not new in the United States, and the current thread of theocratic Christian Reconstructionists goes back at least to 1948. The movement has operated under various names such as the Latter Rain movement, Joel’s Army, the Manifest Sons of God, and now the Seven Mountain Mandate.

Conquer and Occupy Public Institutions

According to Chip Berlet, writing in the Huffington Post, “Christian Reconstructionism is a form of theocratic dominion theology…The core theme of dominion theology is that the Bible mandates Christians to take over and “occupy” secular institutions.” Dominionists and followers of the Seven Mountain Mandate came to public attention in 2005 when a video of Kenyan Pastor, Thomas Muthee anointing Sara Palin for leadership, was uploaded on Youtube.

One group participating, in particular, has been cited as an extremist organization, founded on the missionary promotion of intolerance and prejudice. According to People for the American Way, the so-called American Family Association has:

• held gays responsible for the Holocaust and likened them to domestic terrorists and Nazis who are intent on committing “virtual genocide” against the military, and asserts that “homosexuals should be disqualified from public office”;
• said “we have feminized the Medal of Honor” by awarding it to a soldier who saved his fellow combatants rather than killing enemies;
• demanded all immigrants “convert to Christianity” and renounce their religions;
• asserted that Muslims have “no fundamental First Amendment claims” and should be banned from building mosques and deported from the US, adding that Muslims are inherently stupid as a result of inbreeding;
• claimed African American women “rut like rabbits” due to welfare and that Native Americans are “morally disqualified” from living in America because they didn’t convert to Christianity and were consequently cursed by God with alcoholism and poverty;
• said that the anti-Muslim manifesto of the right-wing Christian terrorist who killed dozens in Norway was “accurate.”

The Dallas Morning News has reported that Perry’s affiliation with extremist organizations, and his radical policies, which have undermined overall economic progress for the population of his state, are driving Democratic party views that he is a deeply flawed candidate, too far out of the mainstream to be electable nationally. From today’s DMN:

As Rick Perry gears up for a presidential bid, Democrats also are making preparations — dusting off years of opposition research, sharpening attack points, designing anti-Perry websites and, for the most part, awaiting his entry with more eagerness than anxiety.

They’re not trying to tip the GOP primary. But in seeking to tar Perry as a flawed extremist, they want to ensure that as voters beyond Texas get to know him, he won’t be able to shake that image later.

“He has a pretty poor record as governor of Texas on a lot of measures — on wage growth, on job growth, on health care,” said Bill Burton, head of a new pro-Obama political action committee, Priorities USA, and until recently the deputy White House press secretary.

He called it “fairly amazing” that a quarter of Texas are uninsured, and that Perry wanted to opt out of Medicaid and “suggested secession as a remedy to the health care bill.”

The secessionist narrative is particularly disturbing to many in both the Republican and Democratic parties. Perry is seen as a wild-card that would not be likely to take responsible positions on the direction of national policy, and who might bring fringe ideas into the heart of the American government.

At a time of severe economic difficulty, there is concern Perry’s often rosy-eyed commitment to market-distorting deregulatory policies could deepen and prolong the years-long economic slowdown. His state has one of the nation’s most massive budget deficits, and no substantive plan to address it, other than cutting back on needed public services, and economists are now starting to look at whether the extreme positions and under-thought policy approaches might pervade his economic policy strategy.

The news today seems to indicate that while Rick Perry may have shored up a radical segment of the evangelical vote, he has succeeded in casting himself as an ally to extremists with little regard to the perils of programmatic intolerance and discrimination.

IndependentsOfPrinciple.com :: What’s wrong with the stock market, particularly the New York Stock Exchange and the Dow Jones Industrial Average? The most significant problem facing the stock market is really a confluence of two problems: 1) we have too little middle class wealth, and so too little consumer demand, and 2) we face an urgent need to accelerate the transition to a new economy, but we are focused on trying to revive an old economy.

On Thursday, August 4, the Dow Jones Industrial Average dropped almost 513 points, losing 4.3% of its total value, the worst one-day decline since December 2008, and an effective reversal of 8 months’ worth of gains. It happened two days after the United States avoided a default by raising the debt ceiling and cutting government spending by about $250 billion per year over the next 10 years.

Analysts differ over whether the massive stock sell-off is attributable to concerns about an impending default by Italy, or whether it indicates some sort of deep weakness suddenly revealed in the dealings of American banks. What is evident, however, is that with massive cuts in government spending planned, the nation’s leading industrial corporations may lose needed funding and/or incentives for new investment.

The Dow Jones Industrial Average measures the collective value of 30 leading publicly traded industrial corporations. It is rooted in a 19th-century industrial economic model, in which the value of these firms grows as the wider economy is developed. In a fully developed post-industrial economy, connected at countless points of contact to a global marketplace, and driven by consumer behavior, there are obstacles to modeling economic health in this way.

But beyond the power and relevance of the Dow Jones Industrial Average, stock indices in general are prone to certain inherent flaws that can incentivize the slowing or even reversal of trends that would be healthy for the overall economy. This is because they favor already powerful entities, and are often ill equipped to measure or reward activities that substantially disperse wealth creation.

Stock indices are at best an indirect measure of capital decentralization, because they measure its centralization, albeit in a way that could, if all other conditions are right, result in more people gaining access to the levers of capitalization and wealth creation. In other words, the best-case scenario is: if everyone gets in, and makes the same bets, and most people keep up, then maybe most people get richer. But that is not the point, and the indices don’t even attempt to tell that story.

When banks come to depend on the commonly held belief that they control wealth that does not in fact exist, the possibility of wealth being decentralized in a way that drives consumer spending is greatly reduced. It has to be, because to meet the demands of their own fictional wealth claims, banks must persuade others, i.e. many or most people, to take on unsustainable debt.

Ultimately, this practice drives the deployment of still more unsustainable debt, and deprives consumers of too great a portion of their wealth, cutting into economic output, slowing economic growth and impeding hiring. This is where we find ourselves, and the banks, investment firms and major industrial corporations, are sitting on massive real wealth, waiting for government to somehow force consumer spending higher.

But the summer of 2011 has seen two worrying trends that make it less likely government can motivate new growth: the United States has committed to removing $2.5 trillion in government spending from the economy, over ten years, and multiple eurozone countries appear closer to default than before the US debt ceiling debacle.

Austerity plans in the US and the EU now threaten to destabilize major western commercial markets, even as investors grapple with the shift toward more volatile consumer markets in Brazil, Russia, India and China, sometimes grouped together as the “BRIC” bloc. Much conventional industry is still heavily invested in mineral fuels, a dependency which could lead to cost swings so severe as to limit investment of even huge pools of cash in reserve.

So, what is wrong with the stock market? It is viscerally linked to trends that no longer support sustained unlimited expansion. The fabric of our global economy, and the technologies and innovations that make it work, have evolved so far as to work, in many ways, against the continued expansion of the specific values counted by the various stock indices, given the way they are counted.

We need a more astute, more precise, more direct and versatile way to read the economic landscape that offers up the best opportunities for investment. We need to consider and then to integrate into our planning and our value judgments real measures of generalized quality of life, corresponding to household autonomy, individual career choice, and opportunities for asset building and middle-class entrepreneurship. And then we need to find ways of measuring these indicators that actually drive the underlying economic reality to improve.

We need to remember that not everyone trades stocks and bonds for a living, not everyone is hoping banks and insurers can continue to reap major profits without providing consumer-centered service, real wealth expansion and a more resilient foundation for sustained prosperity, and not everyone is served by a system that focuses on concentrations of wealth near the top of the income ladder.

We need to stay global in our thinking, and make sure we are inspired by the aim of building a robust, democratic society; the middle class will thrive if we do.

The United States government, until Friday, had more than twice the AAA debt outstanding as any other category of AAA debt. According to Nomura, while the US had $11.2 trillion in AAA debt oustanding, agency mortgage backed securities account for over $5 trillion, and Germany and France follow with less than $2 trillion. Standard and Poors has now downgraded the credit worthiness of the United States government, though there was no default and no indication the government was in any way likely to default.

S&P has come under fire for reportedly having made a $2 trillion error in its calculations. Though its estimations are based on publicly available data, the ratings agency reportedly estimated $2 trillion more in government spending than actually exists. According to Reuters: “S&P was forced to remove the number from its analysis after Treasury officials discovered that the rating agency’s estimates of the government’s discretionary spending was $2 trillion too high, sources familiar with the discussions said.”

Though the underlying economic reasoning for the credit downgrade was the figure which was $2 trillion too high, and the difference between the debt ceiling deal and the $4 trillion demand made by S&P is less than $2 trillion, the ratings agency refused to forego the credit downgrade. S&P suffered a severe blow to its reputation, when it was revealed that the agency has maintained, with little to no evidence of merit, AAA ratings on subprime mortgage-backed securities, which eventually collapsed, and led to the 2007-2009 financial crisis.

Reuters also includes this detail in its report:

Ian Lyngen, a senior government bond strategist at CRT Capital Group in Connecticut, agreed S&P now had more than just a credibility problem.

“The fact that they have now downgraded the United States suggests to me that they are now going to be dealing with a relevance issue,” he said. “Because the fact of the matter is that 10-year (Treasury note) yields are near 2.5 percent, and that in no way suggests a lack of sponsorship for U.S. debt.”

Yields on U.S. 10-year notes US10YT=RR, a benchmark for borrowing rates throughout the economy, fell as far as 2.34 percent on Friday — their lowest since October 2010 and very low by historical standards.

The credit downgrade was expected to impose massive escalating costs on the entire US economy, the borrowing of the US government, and also competing sovereign debt products and commercial investment. The fear, then, would be that a credit downgrade on the entity whose bond products and currency support the entire global financial system could lead to a second great recession, possibly a global economic depression.

But Standard and Poors has possibly waded into quicksand, for six crucial reasons:

1. The United States did not, in fact, default;
2. The ratings agency in question made a $2 trillion error in its calculations;
3. Despite conceding that its chief calculations were erroneous, the agency insisted on the downgrade;
4. Treasury officials were told that S&P was using the downgrade to express its displeasure that a bigger debt package was not agreed;
5. Other ratings agencies have not seen fit to downgrade US Treasury bonds;
6. There does not appear to be a lag in investment in Treasury bonds…

Taken together, it would appear that while there is virtually no evidence to substantiate the downgrade, and with S&P’s only internal justification for the downgrade discredited, S&P representatives expressed a desire to downgrade Treasury bonds—with all the global economic fallout that might entail—in order to express displeasure that their will was not done on Capitol Hill. S&P may now lose relevance, even as its actions may motivate serious economic slowdown around the world.

There are reports that China will immediately seek to begin diversifying its bond holdings and reserves. The S&P downgrade could ultimately threaten the value of the US government’s lending and the Chinese government’s holdings, and undermine the legitimacy and security of the dollar as the world’s reserve currency. It now appears Treasury officials will be meeting with key players in the world’s financial markets, including major foreign bondholders, like China, to hold off interest rate increases, and possibly to marginalize the S&P finding.

Shoring up the US and the world financial markets is now crucial, as another financial collapse could leave the world economy with negative growth, and could destabilize governments in fractious regions and even do serious harm to the fiscal integrity of the European Union. The S&P downgrade will be less influential if it is limited to one rating agency, and could have massive unintended consequences, if it is not contained.

John Chambers, chair of S&P’s sovereign ratings committee, said today that “There are two things that we should emphasize. One is that the political discourse has diminished the credit standing of the United States. The other is a fiscal analysis.” This makes four distinct justifications given so far for the downgrade: the $2 trillion in (non-existent) extra spending; the structural problems that might materialize despite the $2 trillion error; the agency’s expression of “displeasure”; and the fact that “political discourse has diminished the credit standing of the United States.”

In April, a bipartisan Senate committee found that S&P, Moody’s and other rating agencies may actually have directly “triggered” the financial crisis:

In one of the most stark condemnations of the credit rating agencies, a Senate investigations panel said the agencies continued to give top ratings to mortgage-backed securities months after the housing market started to collapse.

The agencies then unleashed on the financial system a flood of downgrades in July 2007, the panel said.

“Perhaps more than any other single event, the sudden mass downgrades of (residential mortgage-backed securities) and (collateralized debt obligation) ratings were the immediate trigger for the financial crisis,” the staff for Senators Carl Levin and Tom Coburn wrote in their report.

Today, there are mounting questions about how S&P came to make direct policy demands on the United States Congress, under threat of a credit downgrade, and if the agency is now expressing displeasure, what is the actual ask? Numerous economists have taken issue with the S&P demand for $4 trillion in deficit reduction now, in the midst of a slow recovery, warning that draining that amount of capital from the economy could end the recovery and push the economy back into recession.

Gov. Rick Perry (R-TX), who is reportedly contemplating a run for the presidency, will be attending an evangelical prayer service on Saturday, labeled “The Response”. Perry has been heavily criticized for his participation, both by critics who say the event violates his constitutional oath to treat all Texans equally and by groups like the Anti-Defamation League, which is concerned about the hate-based policies of some of the event’s backers.

According to CBS News:

A number of controversial groups and individuals are linked to the event, including the American Family Association, which is providing financial backing; AFA representatives have called for a ban on Muslim immigrants and for gay men and women to “be disqualified from public office.” Others tied to the event have called for the government to be placed under Christian control and suggested Oprah Winfrey is setting the stage for the antichrist.

Some have suggested the event could link Perry to the religious fringes in a way that could hurt him both in states like New Hampshire and with the full electorate if he wins the GOP nomination, and have speculated that Perry may thus play down his involvement in the event he initiated. But Bearse, the spokesman for The Response, said that is not the case.

One preacher expected to participate has said Hitler was “God’s hunter” and another has allegedly called for armed defense of the white race. Perry himself was the event’s originator, but during the past week, he and his spokespeople have been attempting to suggest he is not the lead supporter and may not even speak at the event.

There has been widespread criticism of Mr. Perry, suggesting he is both out of touch and perilously aligned with extremist organizations. There has been criticism that Perry, now seen as a viable Republican presidential primary candidate could stain the party with the taint of racial hate, ideological extremism, and fundamentalist zealotry.

UPDATE, Sun., August 7, 2011: There is dispute as to whether attendance at Gov. Perry’s prayer rally was 30,000, as organizers claim, or 15,000, as other news sources have estimated. Observers have expressed concern that the event featured radicals whose views oppose the constitutional order of the American political system, and who have called for the establishment of an absolutist theocratic regime.

The following report from Suite101 is particularly telling:

Possible 2012 GOP candidate Rick Perry was a hit with the 15,000 gathered for August 6, 2011 prayer meeting held in Houston.

Rick Perry, who is eyeing a run for the Presidency in 2012, may eventually have to distance himself from his more extremist Christian supporters. The trouble is that Perry needs the support of the American Family Association, which sponsored Perry’s allegedly non-political prayer meeting called The Response. An even more troubling possibility is that Perry may be in full agreement with their Reconstructionist plan to take down the Federal government and create a U.S. theocracy, under Biblical law.

Christian Extremists

The idea that Christians should physically overcome their enemies and rule in righteousness is not new in the United States, and the current thread of theocratic Christian Reconstructionists goes back at least to 1948. The movement has operated under various names such as the Latter Rain movement, Joel’s Army, the Manifest Sons of God, and now the Seven Mountain Mandate.

Conquer and Occupy Public Institutions

According to Chip Berlet, writing in the Huffington Post, “Christian Reconstructionism is a form of theocratic dominion theology…The core theme of dominion theology is that the Bible mandates Christians to take over and “occupy” secular institutions.” Dominionists and followers of the Seven Mountain Mandate came to public attention in 2005 when a video of Kenyan Pastor, Thomas Muthee anointing Sara Palin for leadership, was uploaded on Youtube.

One group participating, in particular, has been cited as an extremist organization, founded on the missionary promotion of intolerance and prejudice. According to People for the American Way, the so-called American Family Association has:

• held gays responsible for the Holocaust and likened them to domestic terrorists and Nazis who are intent on committing “virtual genocide” against the military, and asserts that “homosexuals should be disqualified from public office”;
• said “we have feminized the Medal of Honor” by awarding it to a soldier who saved his fellow combatants rather than killing enemies;
• demanded all immigrants “convert to Christianity” and renounce their religions;
• asserted that Muslims have “no fundamental First Amendment claims” and should be banned from building mosques and deported from the US, adding that Muslims are inherently stupid as a result of inbreeding;
• claimed African American women “rut like rabbits” due to welfare and that Native Americans are “morally disqualified” from living in America because they didn’t convert to Christianity and were consequently cursed by God with alcoholism and poverty;
• said that the anti-Muslim manifesto of the right-wing Christian terrorist who killed dozens in Norway was “accurate.”

The Dallas Morning News has reported that Perry’s affiliation with extremist organizations, and his radical policies, which have undermined overall economic progress for the population of his state, are driving Democratic party views that he is a deeply flawed candidate, too far out of the mainstream to be electable nationally. From today’s DMN:

As Rick Perry gears up for a presidential bid, Democrats also are making preparations — dusting off years of opposition research, sharpening attack points, designing anti-Perry websites and, for the most part, awaiting his entry with more eagerness than anxiety.

They’re not trying to tip the GOP primary. But in seeking to tar Perry as a flawed extremist, they want to ensure that as voters beyond Texas get to know him, he won’t be able to shake that image later.

“He has a pretty poor record as governor of Texas on a lot of measures — on wage growth, on job growth, on health care,” said Bill Burton, head of a new pro-Obama political action committee, Priorities USA, and until recently the deputy White House press secretary.

He called it “fairly amazing” that a quarter of Texas are uninsured, and that Perry wanted to opt out of Medicaid and “suggested secession as a remedy to the health care bill.”

The secessionist narrative is particularly disturbing to many in both the Republican and Democratic parties. Perry is seen as a wild-card that would not be likely to take responsible positions on the direction of national policy, and who might bring fringe ideas into the heart of the American government.

At a time of severe economic difficulty, there is concern Perry’s often rosy-eyed commitment to market-distorting deregulatory policies could deepen and prolong the years-long economic slowdown. His state has one of the nation’s most massive budget deficits, and no substantive plan to address it, other than cutting back on needed public services, and economists are now starting to look at whether the extreme positions and under-thought policy approaches might pervade his economic policy strategy.

The news today seems to indicate that while Rick Perry may have shored up a radical segment of the evangelical vote, he has succeeded in casting himself as an ally to extremists with little regard to the perils of programmatic intolerance and discrimination.

Texas, the most energy-rich populous state in the country, with more oil, more wind, more sun, and a more developed energy sector, than any other state, is now undergoing rolling blackouts, in part because Gov. Rick Perry’s budget policy is bankrupting the state, ending incentives and cutting off supply. Under Perry, the state has run up a $28 billion deficit, and Chinese firms have been buying up major wind energy projects.

Perry’s ideological manipulation of state budget priorities has not only hampered the state’s development of cutting-edge clean energy sources, it has eroded the educational opportunity, targeted lower income families for reduced opportunity, and slowed job creation. The one thing propping up the state’s economic output is immigration, which has allowed new opportunity, new hiring and new capital flows, despite the governor’s attempts to shut them down.

When he named a top utility regulator to head the state’s railroad agency, he did so specifically proclaiming his appointee ”will continue to push back against the Obama Administration’s misguided energy policies which threaten Texas jobs and our nation’s energy security”.

Specifically, Perry meant he wanted to stop construction of high-speed railways—which would create tens of thousands of jobs—and slow, halt or even reverse the transition from costly fossil fuels to more efficient clean energy technologies. The reason? Fossil fuels produce a higher profit margin for the interests that back them, though clean energy technologies, high-speed rail and the smart grid would produce more generalized prosperity and a healthier economy for the state and the region.

Perry has consistently sought to stock the state’s regulatory authorities with industry-interested figures. He has complained that Texas, which emits a huge amount of carbon-dioxide and other pollutants, from fossil fuel-powered plants, should not be subject to the clean air rule that seeks to prevent contamination of one state’s air by activities in another state. He maintains that Texas is above federal law, and has been criticized for a ‘head-in-the-sand’ approach to energy.

Now, in the long, hot summer of 2011, Rick Perry’s Texas has run out of energy, and is experiencing rolling blackouts. The energy capital of the United States is out of energy, because the governor’s fiscal policies and manipulation of incentives has been reckless, ill-informed and biased, crimping the flow of investment and undermining the rate of innovation.

Though oil and gas are not producing the level of job creation of wind, solar, geothermal and renewables, Perry has sought to curtail investment in new technologies, privileging outdated fuel sources whose entrenched power is hampering the job creation potential of what has been Texas’ best opportunity for growth: wind and solar power.

While the nation has been moving toward, albeit at a painfully slow pace, a cleaner energy paradigm, for three decades, with technologies to achieve this accelerating in efficiency and productivity several fold in the last ten years alone, and while Texas is the nation’s wind-energy leader, he has sought to put fossil fuel interests first, to the detriment of the state’s immediate and long-term economic health and vibrancy.

Under Perry’s stewardship, the leading energy-rich state in the nation has been forced into its fifth “energy emergency” this year alone, and is now importing electricity from Mexico. According to a Texas Tribute report from earlier this week:

As scorching temperatures continued and Texas electricity use reached another all-time high, the state grid operator initiated the first step of emergency procedures today, seeking power from other grids, including Mexico.

About 20 power generation units, accounting for around 3,000 megawatts of capacity, were unavailable today during unplanned outages, adding to the strain on the grid. Today’s temperatures soared well past 100 degrees, and it’s not likely that the situation will get better Wednesday or Thursday unless some thunderstorms pass over a major metropolitan area, like Houston or Dallas, to lessen demand.

ERCOT—the Energy Reliability Council of Texas—has sought to implement these emergency procedures due to a combination of record electricity demand and inadequate supply. The unplanned outages were the most significant development, in that they suggest the grid itself has been underfunded and unprepared for the volume needed.

When Perry’s bad fiscal planning and ideological manipulation of taxes is combined with his loyalty to entrenched oil, gas and coal interests, it is clear the clean energy and smart grid industry is fending for itself, and doing very well, but not as well as Texas’ world leading electricity demand requires. His policies have, in fact, left his state with a massive and worsening budget deficit, with no serious plan for course correction, and with severe obstacles to improving the electricity generation crisis.

According to the New Republic:

The Lone Star State has a standing $10 billion shortfall every two-year budget cycle, thanks to a faulty tax system pushed by Perry that fails to balance the budget. Although the governor normally stays away from the state Legislature—sightings in either chamber are rare and exciting—Perry engineered a new business tax in 2006 to replace a prior one riddled with loopholes. Ostensibly a good idea, his new tax nonetheless suffered from the simple fact that it didn’t bring in enough revenue. Furthermore, it turned out to be incredibly complex, leaving many business owners scratching their heads. Those who figured it out, meanwhile, realized that, because the new tax was levied on gross margins as opposed to profits, companies could be losing money and still find themselves on the hook.

State legislators on both sides of the aisle have decried Perry’s ill-conceived fiscal planning. The chief Senate budget writer, Republican Steve Ogden, hasn’t been afraid to mince words about just how bad the business tax is. “None of us were elected to raise taxes on anybody,” he said the first day of the session. “But the margins tax is different. If we don’t fix the margins tax, local property taxes will definitely go up.” The regular legislative session came and went, however, without any real effort to fix the broken tax. The result is that the state is still operating with a structural deficit, and will very likely face more cuts the next time around.

Perry’s loyalty to old energy interests means the state’s cuts are hurting the more job-creation-intensive new energy sector. There has not been the funding available to develop the smart grid, or the major transmission lines, needed to maximize output from wind farms. So even as the Texas wind industry has seen a nation-leading boom in the last decade, its ability to adequately serve the marketplace has been slowed by outdated priorities and what some call overt political bias.

Due to its Renewable Portfolio Standard, which Perry supported, Texas has outpaced other states in wind energy sector development, but critics say too much of the profit is going to foreign companies, not enough Recovery Act funding was deployed to spur investment and too few incentives are in place for in-state start-ups to compete with big oil, coal and gas, and with the Chinese firms Perry is now relying on to fund wind development.

When the Texas wind industry was gearing up for what was likely to be one of the biggest investment booms the state, or the nation, for that matter, had seen in a long time, as a result of Congressional action to reduce carbon emissions and incentivize a transition to clean energy, Perry vehemently opposed the action. When the carbon pricing legislation failed, in the summer of 2010, the result was a swift reversal on the part of major investors, like oil tycoon Boone Pickens, who had been ready to devote record sums to the wind energy sector.

One year later, Texas is undergoing rolling blackouts, its fifth energy emergency in just 8 months, and is having to import electricity from Mexico, because the fiscal and regulatory management of Gov. Rick Perry is not designed to, and is not capable of providing for a more robust smart energy economy. The state has more demand than conventional energy sources can provide, and Gov. Perry has sought to prop up those power sources, to the detriment of innovation and job creation.

The most wind-rich state in the Union could be supplying more than half its electricity from advanced wind power systems, were the infrastructure in place to do so, and Perry’s budgetary mismanagement has diverted both public and private investment to wasteful spending on outmoded power sources, which are costing the state still more in terms of regulatory and public health adaptation, and in opportunity costs from jobs foregone, competition not stimulated, and infrastructure not built.

A wind-and-solar supplied smart grid would allow Texas’ hobbled fossil fuel economy to meet demand, and could, within just two years, reach the 20% clean energy threshold, using existing public-private investment incentives, were they directed where they need to be. The long-term plan should be for 50% wind and solar by 2020, something an adequately funded Texas clean energy sector could easily accomplish, with its abundance of wind, solar and land area.

There are also concerns that, as the focus has moved away from aggressive development of wind energy, Texas may now be experiencing a kind of energy market manipulation like what took place in California, right before the collapse of Enron, when power utilities and power-supply traders colluded to deprive the market of supply in order to force blackouts, during hot—deadly—summer months, and extract huge long-term price hikes from the state. Public policy in Texas has been steered toward subsidizing low consumer electricity prices, but now, the same suppliers that benefit from the resulting massive demand are crying poverty, producing too little and demanding higher prices.

They have hit the state electricity price cap of $3,000 per megawatt-hour, but despite that cap, and what should be the potential to rapidly ramp up clean energy output, the deregulated Texas energy sector leaves the state vulnerable to this kind of underfunded energy production, supply shortages and potential market pricing disruptions. It will be up to Rick Perry to figure out if the status quo is the best thing for Texas; we can only hope he sees that what Texas needs is a majority-renewable smart energy sector, sooner rather than later.

In order to win support from radical Tea Party freshmen, most of whom voted against the legislation anyway, Congressional leaders imposed stiff new tax penalties on radiate students across the country. Specifically, subsidized loans for grad students were cut—the government provides all student loans, so this effectively eliminates funding for post-graduate education—and a tax credit for borrowers who repay student loans on time for 12 consecutive months was eliminated.

The tax credit eliminated costs far less than the massive subsidies going to oil, natural gas, coal and nuclear power companies, yet the Tea Party freshmen, who have touted their opposition to any and every tax increase, did nothing to oppose the tax hikes on students. And while the tax credits may be much smaller than fossil fuel subsidies, or nuclear, eliminating them will cost far more.

Eliminating the on-time repayment credit will reduce the likelihood of on-time repayment significantly, potentially costing the government billions, over time, as well as subjecting more borrowers to fines and fees, depleting their personal economic footprint, and serving as a drag on growth.

The logic is simply astonishing: while the radical anti-tax Tea Partiers, backed by billionaire partisans, claim as an article of faith the absolute truth that any and all tax cuts incentivize the wealthy to create jobs—though we have ten years of evidence this is often not the case—, they reject the idea that a direct cash incentive for repayment will pay off—despite the evidence that it does.

In fact, the particular kind of tax increase the Tea Partiers have demanded and are supporting is more costly and will exacerbate not only budget shortfalls but also the negative economic trends whereby the American people are unnecessarily disadvantaged in the face of far more powerful economic forces.

Allegations that the so-called Tea Party caucus has degenerated into little more than a lobby for the wealthy interests that back them gain credibility when they support tax hikes on the vulnerable, and which will have a direct negative impact on the middle class. It should be well understood by all: the House Tea Party Republicans have pushed for and supported—the anti-student provisions in the failed Republican-only House bills were far worse—tax hikes that will make college more expensive and eat way at middle class wealth.

In a stunning move, the American Conservative Union (ACU), which runs the Conservative Political Action Conference (CPAC), has barred one of its former sponsors, a conservative gay rights group called GOProud. The ban comes just as moderate Republicans are calling on the party to embrace same-sex marriage and gay rights, put the culture wars behind them, and focus on conservative principles more in line with Constitutional freedoms and market economics, as their platform.

The decision was announced in a letter from Gregg Keller, national executive director for the ACU, which read, in part:

The American Conservative Union is preparing to open registration and announce sponsorship opportunities for our Conservative Political Action Conference (CPAC) 2012. As a courtesy to your organization, a previous co-sponsor of CPAC, this letter serves to inform you GOProud will not be invited to participate in a formal role for CPAC events scheduled during the 2012 election cycle.

The decision is certain to draw a new rift in the conservative movement, as libertarian conservatives continue to pressure the Republican party to graduate into the present day, honor the personal liberties enshrined in the Constitution, and put an end to the culture wars. It may also split the Republican primary field, as many now believe it will not be possible to continue anti-gay politics as a platform issue, without forfeiting national elections.

The Democratic party may see an opportunity here, to intensify its pressure on the GOP, which is increasingly being seen by voters—according to recent polling—as a party unwilling to cooperate in constructive governing, riven by ideological radicalism, and determined to attack seniors, the underprivileged, immigrants and other minorities.

Former New York City mayor Rudolph Giuliani said, after his state legalized same-sex marriage, with Republican support, said it was time for the Republican party to support same-sex marriage and ev0lve. Pres. Obama, who has said his own views on the subject are “evolving”, has consistently supported gay rights and the move towards full equality in civil marriage. In July, the Pentagon ended its “don’t ask, don’t tell” policy, ending centuries of discrimination against homosexual soldiers.

Fred Karger, the only openly gay Republican candidate for president, has reported being barred from conferences and debates, and has written a scathing indictment of the ACU, for the Guardian newspaper. In his piece, Karger writes:

Alberto “Al” Cardenas, the new head of the American Conservative Union (ACU), has taken bigotry and hypocrisy to new heights. I believe I was a victim of his organisation’s prejudice earlier this year when I wanted to purchase a booth at their annual CPAC gathering in Washington, DC. My credit card information was taken last December, and I was told that I was in. Then, mysteriously, three weeks later, I was told by phone that they had “sold out”. Funny, others were purchasing booths right up until the conference began in mid February.

As the first openly gay candidate to run for president of either party, I have hit some bumps in the road, but I have to say that my treatment by the American Conservative Union was the most hurtful and hateful to date.

Now they have taken it up a notch: they have just announced that the gay conservative Republican group GOProud is not allowed a booth at next winter’s CPAC conference (pdf). Cardenas is not saying to GOProud that CPAC has “sold out”; he is saying, simply, STAY OUT!

CPAC is holding an event in Florida, on September 23, and Karger says he was not invited to attend. He will be asking all of the other Republican presidential candidates to boycott the event, so long as the ACU maintains its ban on his participation or on GOProud participating in next year’s conference.

Two public opinion surveys released today are raising eyebrows among political analysts, as they show the sharp disapproval the American people feel toward the hardline elements in Congress that nearly drove the nation into default. A CNN/ORC poll found that 77% of those polled believe members of Congress involved in the debt negotiations behaved like “spoiled children”.

CNN also found:

The overall approval rating for Congress, now at 14 percent, is at an all-time low. Sixty-eight percent of respondents disapprove of how the Republican leaders in Congress handled the debt ceiling, 63 percent disapprove of Democratic leadership and 53 percent disapprove of President Obama’s role in the agreement.

A poll from the Washington Post and the Pew Research Center found a uniformly negative response from the public to how Congress managed the negotiation process. Among the most prominent words chosen were: “ridiculous”, “disgusting”, “stupid”, “childish”, “terrible”, “frustrating”, “scary”, “outrageous”, “chaos”, “disgrace” and “pathetic”.

Specifically, out of 1,001 respondents, the following numbers of people put the following descriptions at the top of the list:

1. Ridiculous — 66
2. Disgust/disgusting/disgusted — 42
3. Stupid/stupidity — 36
4. Frustrating/frustrated — 26
5. Poor/poorly — 25
6. Terrible — 25
7. Disappointing/disappointment/disappointed — 24
8. Childish — 23
9. Joke — 22
10. Mess/messy — 22

Rep. Charlie Rangel suggested today to MSNBC’s Martin Bashir that the Tea Party freshmen, many of them anti-tax radicals who vowed to drive the nation to default, come what may, have behaved like a “suicide cult”—Rangel provided the word “cult”, while Bashir inferred “suicide cult” from his analysis.

It is unclear how the ongoing debt and deficit reduction negotiations will play out, but it is certain that much of this public disgust and ire will be felt by members of Congress visiting their home districts throughout the August recess. This week may involve negotiations between the executive branch and ratings agencies and major banks, to ensure the US does not see its credit rating downgraded, while the new program of cuts is negotiated.

Pres. Barack Obama today addressed the nation from the White House Rose Garden, explaining how the grand compromise on debt and deficits will play out, as negotiations on new debt reduction continue. He spoke after the United States Senate passed the controversial debt deal, with the second significantly bipartisan vote in two days.

Obama said “the American people may have voted for divided government; they did not vote for dysfunctional government”. He called for cooperative bipartisan solutions, going forward, and noted that while “deficit reduction is part of the agenda, it is not the whole agenda.” He promised serious and sustained effort to incentivize job creation, balance revenues against spending cuts, and protect needed public services, like enforcement of the Clean Air and Clean Water Acts.

He called for investment from the private sector in construction and infrastructure development, and suggested a national infrastructure bank would allow private capital to begin to flow to those projects. Obama suggested that “Both parties share power in Washington, and both parties need to take responsibility for improving this economy,” and called for sustained and cooperative focus, whether or not there is the threat of national default.

The Senate voted 74 to 26 to pass the debt package. Both Democrats and Republicans opposed the measure and a broad coalition from both parties supported passage. This marks the second consecutive day that a broad bipartisan coalition voted to pass legislation that few liked, but all agreed was necessary to stave off potentially calamitous economic fallout.

The composition of the national debt is a complex history of policy decisions, governmental priorities and Congressional authorizations. Republican opponents of Pres. Obama have suggested that debt and deficits have “exploded” since he took office. They have sought to paint the president as a “tax and spend liberal”, because that accusation fits their standard campaign model.

But economists and budget analysts, including a top budget aide to Republican presidents Reagan and Bush, the elder, say Obama’s actual performance as president puts his budget policy in the “moderate conservative” segment of the fiscal policy spectrum. He has routinely demanded from Congress that major legislation be “paid for” or “deficit neutral”, and he has struggled mightily—putting aside his own policy priorities—to slow the expansion of deficits that stems from policies enacted by the previous administration.

Among these major policy drivers are the wars in Iraq and Afghanistan. The Bush administration simply never included either war in official budget projections, requiring Congress to fund both through “supplemental” spending agreements. The result was that two massive unfunded wars, each adding trillions to government spending, over a decade, were kept “off the books”.

Barack Obama—who voted to oppose raising the debt ceiling when he was a senator, in part because he believed the “off the books” accounting was going to bankrupt the government and pose a threat to the nation’s long term health and prosperity—viewed this as unethical and pledged to put the wars on the books, so the public, and the Congress, could more directly judge the costs and benefits of the wars and plan for the long term.

What is vitally important for all independent voters to understand is that while the debt debate has been laced-through with intense partisan rhetoric and vitriolic attacks, is that there are real drivers of the national debt, and they have little to do with socialism. The national debt is a product of patterns of borrowing that have soared over the last three decades, largely from one particular problem: the coincidence of relentless tax cutting with the need to fund existing programs and address real-world challenges.

In 1981, when Pres. Jimmy Carter left office, the national debt was under $1 trillion. By the time Pres. Ronald Reagan left office, in 1989, the national debt was close to $3 trillion. During Pres. George H.W. Bush’s first year in office, when the budget was Reagan’s last budget, the national debt broke $3 trillion.

The first Pres. Bush was a better debt manager than his immediate predecessor or his son; debt grew by roughly $1.4 trillion, during his 4 years in office. Pres. Clinton did a little better, adding about the same amount over 8 years. But Clinton achieved an important result: he left the government with projected budget surpluses exceeding the total national debt, over the coming decade.

Pres. George W. Bush took office in 2001 with those surpluses in place. His 2001 tax cut, however, reversed the entire surplus, and by the time of his reelection in 2004, he added to the (once again) growing debt another $1.7 trillion. By the time he left office in 2009, the national debt had escalated to over $10 trillion, and the debt ceiling was already primed for another $2 trillion in borrowing.

That extra $2 trillion in borrowing was necessary, to pay for spending already “in the pipeline”, already passed into law and on the federal books, either as part of the official budget or supplemental spending. By the end of 2009, with George W. Bush’s last annual budget playing out, the national debt was at $12 trillion. It would be mid 2010, before the active federal budget was “owned” by Obama.

As of this writing, the policies of George W. Bush have added fully $7 trillion to the national debt. Since then, Pres. Obama’s policies have added another $1.4 trillion, and already planned spending policy, historically low government tax revenues and the economic reality of tight credit, slow growth and lagging job creation, makes it very difficult for him for him to cut spending to a level where he would be able to match Pres. Bush, the elder and Pres. Clinton, in managing the national debt.

His record on budgets has been one of reformer: he has consistently favored institutional reforms that impose real cuts, and bend cost growth down to match or fall below inflation. But reducing spending can reduce national economic growth as well, further straining the national debt trend lines.

What Pres. George H.W. Bush and Pres. Clinton were able to manage was a cooperative Congressional environment, in which tough bargains were made with rivals in Congress. Pres. Obama has not had that luxury, and it may be he will not have it. There are growing tensions in the Republican party, resulting from real disagreement about whether budget and debt should be used for partisan strategy or whether they should be non-partisan policy items, with all voting in favor of the national interest.

Independent voters are looking for sanity. We are looking for reason and clarity. We are looking for long-term policy decisions that help steer the nation toward prosperity and sustainable, generalized economic wellbeing. We need a balanced standard for budget policy, where revenues increase to meet costs, so the United States remains the world’s leading fiscal policy driver and the dollar remains the world’s reserve currency.

There is opportunity in the budget policy negotiations, but the opportunity will be missed, if one or both sides refuse to use the negotiations to reach a constructive, well-designed, well-funded, rational policy on national community reinvestment, infrastructure upgrades, education and new revenues capable of meeting our needs and our aims.

In a triumphant and surprise return to the House of Representatives, Congresswoman Gabrielle Giffords received a 10-minute standing ovation from her colleagues, before casting her first vote since surviving an assassination attempt in January. Giffords voted for the debt-ceiling deal, effectively making her return to the House a show of leadership and a commitment to do the thing that is better for the country, even if it is a tough vote to take.

Throughout the day, there had been griping and sniping, and there was concern the forceful “no” votes might draw some moderates away from passage and sink the “grand compromise”. Giffords return, and her support for the measure, helped to “change the mood”, according to many in the chamber. Her example, as a principled, devoted public servant who illustrates what is sacred in the oath of office, remains a forceful example to her colleagues.

House minority leader Nancy Pelosi said there is no name that inspires as much love, or serves as such an example to the daughters of families across the nation, as that of Congresswoman Gabby Giffords. The debt ceiling negotiations have devastated the political reputations of nearly everyone involved, so Giffords’ arrival at the Capitol immediately elevated the profile and the purpose of the entire House of Representatives.

Tonight, Pres. Barack Obama announced to the nation and the world that he and the leaders of both parties, in both houses of Congress, have reached agreement on a plan to raise the nation’s debt ceiling through the 2012 election and into 2013. The deal immediately cuts $1 trillion, then relies on “triggers” to guarantee future spending cuts.

A bipartisan bicameral debt reduction committee will have to present a program of new, agreed cuts, by the end of this year, or the new law will make tough cuts that neither party favors automatic. The triggers allow all parties to sign on to a deal that will raise the debt ceiling until after the 2012 elections—importantly preventing an even more partisan, more contentious negotiation in 2012—without increasing overall borrowing.

The House and Senate are now laboring to rush the bill through, to win bipartisan support for passage, and to do so before tomorrow’s deadline for national default. There is tough opposition by members of both parties, and by radicals and moderates in both parties. And there is word, at this writing, that the Senate will not hold a vote until tomorrow, perilously close to the final hour.

Pres. Obama is facing intense criticism from his progressive base, many of whom are outraged that there was no agreement to roll back corporate subsidies and the Bush tax cuts for the wealthy. But Obama and Democratic leaders are saying the new bicameral committee, with equal representation from Republicans and Democrats, will have a very hard time dealing seriously with  future debt reduction, without raising new revenues, most likely through those kind of tax cuts—which have a very low rate of return on investment.

Tea Party activists are viewing the compromise bill as a capitulation by the Republican leadership, as they view the debt ceiling increase as a central policy aim of the Obama administration—however untrue that may be. Many of them appear to be—according to their public statements throughout the day—jockeying for position, in hopes of winning approval from leadership to vote no on a must-pass bill, the failure of which could sink the economy into a depression.

The House of Republicans is scheduled to vote this evening, and the coalition that is shaping up now looks increasingly to be the kind of broad, bipartisan coalition of unhappy souls that were always required to pass a debt ceiling increase in this political environment. There is, nevertheless, mounting suspense and spreading concern that hard-talking opponents among Tea Party Republicans and progressive Democrats may dissuade some moderates from supporting the deal.

The Republican House leadership today again reiterated the false claim that Democratic leaders and the president have been pushing for “job-killing tax increases”. It is obviously a deliberate rhetorical exaggeration, designed to make a case for tax cuts, in a mode of campaigning and fundraising. But it is also a lie: not one politician in either party has ever called for “job-killing tax increases”.

But there is substantial evidence that radical revenue shortfalls, owing to the unfunded Bush tax cuts of 2001 and 2003 are responsible for the lag in job-creation. The recipients of those cuts are not “job creators” if they are not creating jobs. They were creating jobs before those tax cuts, and wages were higher. Overall economic growth was bigger and the economy itself was growing at a sustainable pace.

The Bush tax cuts interrupted a trend of spreading middle-class affluence. More people were entering the middle class, and more people in the middle class were building broad bases of financial and property assets. While some Republicans continue to push campaign distortions with no foundation in reality as the sole argument about the American economy, the facts paint a very different picture:

In fact, it appears that the unfunded, unaffordable Bush tax cuts have had a corrosive impact on government revenues, a corrosive impact on job creation, and a corrosive impact on the job-creation potential of private wealth holdings. The Bush tax cuts have been intensely regressive—funneling far more money to the wealthy, and depriving most other Americans of comparable wealth gains.

Now that Republicans and Democrats both are griping about the unsavory taste of the bipartisan debt compromise, there is a return to false claims about Pres. Obama—the only president in US history to repeatedly demand that Congress “find the funds” and send him “deficit neutral” bills—wanting “a blank check” and about the Democratic party being devoted to a perverse conspiracy to “kill jobs”, and erode the middle class.

The arithmetic is simple: it is the policies of Pres. Barack Obama that have been designed precisely to benefit the middle class and hardworking wage earners; it is the policies of the House Republican caucus that have been designed to cut spending, cut taxes and steer still more of the American people’s household wealth to the already wealthy.

It is Pres. Obama who has been pushing policies designed to ensure that the United States fulfills its obligations; it is the Republican House caucus that has been pushing the idea that “we overpromised” to those under 55, and that Medicare is fundamentally unaffordable and should be reformed into nonexistence—Medicare is an insurance plan; the Ryan plan proposes replacing it with a coupon book but requiring seniors to buy costly private health insurance.

One of the worst and most insidious tricks of the Bush administration’s fiscal and economic policies is hard at work in the current radicalism of the Republican House caucus, and that is the giving of special favors—in the form of unfunded tax credits, lower rates and wide-open loopholes, to make businesses that have ceased to serve the market look as if they still do.

Specifically, instead of requiring—as did the Affordable Care Act—that insurers meet new standards, turn no one away and provide quality care at affordable rates, in exchange for tens of millions of new private sector clients, the Ryan Medicare plan would simply force tens of millions of seniors to give huge sums to the insurance industry, without demanding performance. In other words, it would take seniors’ money without requiring even similar quality of care to what Medicare now makes possible.

It is the job-killing unfunded tax cuts and wealth displacement of the Bush era that Democratic leaders and Pres. Obama are working to overturn, so that the nation can be restored to fiscal sanity and the interests that control most of the nation’s wealth can return to job creation. It is simple common sense: free money already received does not provide an incentives; the need to be enterprising in order to earn new wealth, does.

The following is a complete transcript of Pres. Obama’s remarks to the nation, announcing a bipartisan deal to raise the debt ceiling, agreed to today by the leadership of both parties…

Good evening. There are still some very important votes to be taken by members of Congress, but I want to announce that the leaders of both parties, in both chambers, have reached an agreement that will reduce the deficit and avoid default — a default that would have had a devastating effect on our economy.

The first part of this agreement will cut about $1 trillion in spending over the next 10 years — cuts that both parties had agreed to early on in this process. The result would be the lowest level of annual domestic spending since Dwight Eisenhower was President — but at a level that still allows us to make job-creating investments in things like education and research. We also made sure that these cuts wouldn’t happen so abruptly that they’d be a drag on a fragile economy.

Now, I’ve said from the beginning that the ultimate solution to our deficit problem must be balanced. Despite what some Republicans have argued, I believe that we have to ask the wealthiest Americans and biggest corporations to pay their fair share by giving up tax breaks and special deductions. Despite what some in my own party have argued, I believe that we need to make some modest adjustments to programs like Medicare to ensure that they’re still around for future generations.

That’s why the second part of this agreement is so important. It establishes a bipartisan committee of Congress to report back by November with a proposal to further reduce the deficit, which will then be put before the entire Congress for an up or down vote. In this stage, everything will be on the table. To hold us all accountable for making these reforms, tough cuts that both parties would find objectionable would automatically go into effect if we don’t act. And over the next few months, I’ll continue to make a detailed case to these lawmakers about why I believe a balanced approach is necessary to finish the job.

Now, is this the deal I would have preferred? No. I believe that we could have made the tough choices required — on entitlement reform and tax reform — right now, rather than through a special congressional committee process. But this compromise does make a serious down payment on the deficit reduction we need, and gives each party a strong incentive to get a balanced plan done before the end of the year.

Most importantly, it will allow us to avoid default and end the crisis that Washington imposed on the rest of America. It ensures also that we will not face this same kind of crisis again in six months, or eight months, or 12 months. And it will begin to lift the cloud of debt and the cloud of uncertainty that hangs over our economy.

Now, this process has been messy; it’s taken far too long. I’ve been concerned about the impact that it has had on business confidence and consumer confidence and the economy as a whole over the last month. Nevertheless, ultimately, the leaders of both parties have found their way toward compromise. And I want to thank them for that.

Most of all, I want to thank the American people. It’s been your voices — your letters, your emails, your tweets, your phone calls — that have compelled Washington to act in the final days. And the American people’s voice is a very, very powerful thing.

We’re not done yet. I want to urge members of both parties to do the right thing and support this deal with your votes over the next few days. It will allow us to avoid default. It will allow us to pay our bills. It will allow us to start reducing our deficit in a responsible way. And it will allow us to turn to the very important business of doing everything we can to create jobs, boost wages, and grow this economy faster than it’s currently growing.

That’s what the American people sent us here to do, and that’s what we should be devoting all of our time to accomplishing in the months ahead.

Thank you very much, everybody.

The Tea Party movement was a grassroots rebellion of discontented, disenfranchised, fiscally conservative working people. It was wage earners and small-town conservatives who wanted reason and rationality in government. It ballooned into a pro-Republican juggernaut, financed by billionaire partisans, and managed to maneuver itself into a position of seemingly dictatorial control over the Republican majority in the House of Representatives.

Tea Party luminaries have professed adoration for many details of the radical reform budget put forward by Rep. Paul Ryan (R-WI), but Republican party campaign coordinators continue to believe the self-professed Tea Party caucus leader Michelle Bachmann would not be viable as the party’s nominee for president. There are tensions, to be sure, but the chattering class in Washington seems to have missed a vitally important detail of the story:

The debt ceiling crisis has essentially sealed the demise of the true Tea Party movement within the Republican party, for one very simple reason. The Republican Tea Party radicals have demanded, above all other priorities, the absolute commitment to protecting tax breaks for the wealthiest of the wealthy, even where it would bring on default, force interest rates to soar, and put the nation in a still deeper fiscal mess.

The Tea Party cannot be a grassroots movement, emerging from no particular center of influence, spontaneously rising up to protest against unfair government tax policy, if it is co-opted wholesale by billionaire interests and committed entirely to protecting, maintaining and expanding, unfair government tax policy. This is not to say that most Tea Party backers are aware at how far from their demands the Tea Party caucus has veered; many may be confused about whether the radical pro-wealth tax policy of the current caucus will or will not benefit them.

But let’s look at a few key facts:

• The Bush tax cuts for the wealthy are costing trillions of dollars in added national debt;
• That debt is expected to be paid by all Americans, as the tax cuts for the wealthy are designed to reduce the burden on the wealthy, transferring it to the rest of the population;
• Added debt will drive the nation to default or a credit downgrade, if new revenues are not found;
• The Tea Party radicals in the House of Representatives have committed not to deficit or debt reduction, but to protecting tax breaks for the wealthy;
• The Tea Party radicals in the House of Representatives continue to push against a solution to raise the debt ceiling;
• Failure to raise the debt ceiling will impose massive across-the-board cost increases on most Americans, slowing economic growth, choking off capital to small businesses, accelerating joblessness, pricing many people out of their homes;
• Committed defense of unaffordably expensive tax credits to the ultrawealthy undermines the economic standing of the middle class and wage earners;

The Tea Party has been effectively eliminated by the billionaire-backed Club for Growth, and its quest to overrule American democracy and institute tax policies designed to deliver massive new unearned income to the ultra wealthy and to multinational corporations. The contradiction here cannot be overstated or overlooked.

Either the Tea Party is against unfair government tax policy that disadvantages most Americans, or it is not. At present, the real voice of the Tea Party in the Republican conference, in the House of Representatives has all but been erased by the interests that favor the permanent extension of the Bush tax cuts and a host of other regressive tax policies designed to establish funding streams that run from small businesses, families and working people, to the accounts of billionaires and multinationals.

Even as Democratic leaders secretly cheer what they view as the future electoral inviability of the radical Republican “hostage-takers” in the House of Representatives, the media and the political analysis of Washington, DC, seem to be missing the real ideological and strategic import of the moment: what is being touted as the apotheosis of the Tea Party is in many ways its demise.

Day after day, throughout the debt crisis, it has been possible to read or to witness interviews with Tea Party grassroots leaders and intellectual leaders, who insist that the movement is not about defending tax cuts for the rich. Yet their protests are falling on deaf ears, as the establishment in Washington continues to interpret the opposition to unfair tax policy as support for policies disadvantageous to most Americans, and observers conflate the Tea Party’s populism with the GOP’s committed defense of the theories of Milton Friedman.

Perhaps making the anomalous state of affairs in the House still more clear: facing the possibility of more than $4 trillion in long-term debt and deficit reduction, in a plan balanced between new cuts and new revenue, making it more viable, more sustainable, and more conducive to long-term fiscal health, Speaker of the House John Boehner rejected the plan, in favor of a much weaker plan that would do very little to solve the debt crisis and would likely saddle most Tea Party supporters with higher costs.

It now looks like the Tea Party’s goals for this Congress are unobtainable, as neither the Republican leadership nor the so-called Tea Party caucus support any follow through on policies that would make the tax code more fair. Indeed, at the present moment, the sole voice calling for comprehensive tax-code reform, to eliminate distortionary loopholes and special deals, is Pres. Obama, whom the Tea Party do not recognize as an ally.

So, what of the Tea Party’s great promise of pervasive influence? It always had to do with only one element of the Tea Party dynamic—the claim to represent the interests of ordinary Americans who work for a living and want common sense fiscal policy. The Tea Party caucus in the House has abandoned policies that would serve that base, to win the favor of big money backers.

A failure to do bigger, more sustainable debt and deficit reduction, to defend tax cuts for the wealthy and demand that cuts be paid for by seniors, students and the middle class, signals the demise of the Tea Party movement in this Congress.

List of Legislative Riders on H.R.2584, The Interior & Environment Approps bill for FY12
39 provisions in the bill specifically eliminate environmental protections in service of big polluters and GOP campaign donors

*In order as they appear in the bill, with section numbers cited.

Blocks Endangered Species Act Designations [Language on page 8]: Prohibits funding for Endangered Species Act listings or critical habitat designations.

Blocks NPS Boat Checks on Yukon River [Section 116]: Prohibits the National Park Service from carrying out boat inspection or safety checks on the Yukon River within the Yukon-Charley National Preserve in Alaska.

Blocks Agency Appeal of Grazing on Public Lands [Section 118]: Amends administrative appeal procedures for grazing on public lands to require parties to exhaust all administrative appeals before they may file suit in Federal Court.

Blocks Judicial Review of De-listing Wolves in Wyoming/Great Lakes [Section 119]: Protects from judicial review any decision of the Secretary of the Interior to de-list wolves in Wyoming or the Great Lakes region.

Blocks NEPA Review of Livestock Movement across Public Lands [Section 120]: Provides that for FY 2012 through FY 2014 the movement of livestock across public lands shall not be subject to NEPA review.

Requires BOEMRE Oil & Gas Permit Reporting [Section 121]: Requires Bureau of Ocean Energy Management, Regulation, and Enforcement to keep detailed records and provide quarterly reports on any oil and gas permit or plan that was not approved by the agency.

Blocks Wild Lands Secretarial Order [Section 124]: Prohibits funding for the Wild Lands Secretarial Order announced by Interior Secretary Salazar last December. Proponents of the Secretarial Order argue that the Order is a reiteration of the Federal Land Policy and Management Act of 1976 requirements for BLM management of federal lands with wilderness characteristics.

Allows for Export of Alaskan Western Cedar [Section 414]: Allows Alaskan western red cedar and yellow cedar to be sold for export. Current law requires such cedar to be used domestically.

Blocks NEPA Review of Extended Grazing Permits [Section 415]: Allows grazing permits to be extended without the required NEPA review in FY 2012 through FY 2016. In prior year’s appropriations, the extension of grazing permits was only for one year.

Extension of Forest Service Stewardship Program [Section 427]: Allows the Forest Service stewardship contracting program which under current law does not expire until September 30, 2013 to be extended through September 30, 2023.

Blocks Livestock Emissions Regulation [Section 428]: Prohibits funds for the promulgation or implementation of any regulation requiring a permit for emissions resulting from the biological processes of livestock production.

Blocks Greenhouse Gas Rule on Manure Management [Section 429]: Prohibits EPA from implementing a rule requiring reporting of greenhouse gases from manure management systems.

Blocks Greenhouse Gas Rule on Stationary Sources [Section 431]: Severely limits EPA’s ability to regulate greenhouse gases. For a one-year period EPA is prohibited from proposing or promulgating regulations to reduce greenhouse gas (GHG) emissions from stationary sources. The language also prevents civil tort or common law lawsuits during this one-year period. Furthermore the language states that any permit applied for during the one-year period shall not be federally enforceable.

Blocks Update to Mountaintop Removal Mining Rule [Section 432]: Prohibits the Office of Surface Mining (OSM) from updating the Stream Buffer Rule. This is for the benefit of companies engaged in Mountaintop Removal Mining.

Blocks Mountaintop Removal Mining Policy at Multiple Agencies [Sec. 433]: Prohibits EPA, the Corps of Engineers, and OSM from implementing or enforcing any policy or procedure contained in two specified documents on Mountaintop Removal Mining.

Blocks Coal Ash Regulation [Section 434]: Prohibits EPA from regulating Fossil Fuel Combustion Waste (coal ash) under the Solid Waste Disposal Act.

Blocks Modification of Clean Water Act [Sec. 435]: Prohibits EPA from changing or supplementing guidance or rules related to the scope of the Clean Water Act.

Blocks Clean Water Act Regulations on Cooling Water Intake Structures [Section 436]: Prohibits EPA from developing, finalizing, implementing, or enforcing rules for facilities with cooling water intake structures.

Limiting Public Appeals [Section 437]: Changes the general administrative appeal process for the Forest Service to the less rigorous one contained in the Healthy Forests Restoration Act of 2003.

Blocks Storm Water Discharge Regulations [Section 439]: Prohibits regulations or guidance that would expand the storm water discharge program under the Clean Water Act to post-construction commercial or residential properties until after the EPA administrator submits a study to the Appropriations and authorizing Committees. The study must include overall cost as well as a cost-benefit analysis for various options.

Financial Break for Big Mining Companies [Section 440]: Amends the 1993 law establishing the Hardrock Mining Claim Maintenance Fee to provide a financial break for placer claims held by an association of two or more persons.

Allows for Texas’ Cap-and-Trade System [Section 441]: Provides that the EPA shall take no action to disapprove or prevent implementation of any flexible air permitting program. This provision was for the benefit of the State of Texas.

Blocks Grazing Management of Bighorn Sheep [Section 442]: Provides that through FY 2016 no action can be taken to manage Bighorn Sheep if such action would result in a reduction in the number of livestock allowed to graze upon a parcel.

Waives Clean Air Act Requirements for Big Oil Companies [Section 443]: Amends the Clean Air Act to (1) preclude EPA from requiring offshore sources to demonstrate compliance with health-based air quality standards anywhere but in a single onshore area; (2) reduce the length of time during which exploration platforms and drill ships are considered emission sources under the CAA, thereby limiting the time when emissions would be controlled; (3) make it impossible to use the permitting program to set emission control requirements for service vessels associated with offshore sources; and (4) replace a relatively fast, inexpensive process for citizens to challenge government action with a longer, more expensive review process in the Court of Appeals for the D.C. Circuit. This legislation passed the House on June 22, 2011 by a vote of 253-166.

Blocks Arsenic Cancer Study & Formaldehyde Risk Assessments [Section 444]: New authorization language requiring EPA to improve its Integrated Risk Information System (IRIS) seeking to draw doubt to the program that highlights health implications from environmental contaminants. The language stops the release of draft or final risk assessments that are not based on improvements in IRIS based on a National Research Council assessment of formaldehyde. Further requires the National Academy of Science to review EPA’s changes to IRIS and review risk assessments undertaken by EPA. The language goes on to limit funds for any action that would lower exposure levels below or within background concentration levels in ambient air, drinking water, soil, or sediment. Report language directs EPA to take no further action to post its draft cancer assessment of inorganic arsenic until the completion of the NAS study.

Removes Protection of Grand Canyon from Uranium Mining Claims [Section 445]: Prohibits the Secretary of the Interior from implementing a land withdrawal to protect the Grand Canyon from new uranium mining claims.

Blocks Forest Service Travel Management: [Section 446]: Prohibits the Forest Service from implementing Travel Management Plans in California until completion of an assessment of unauthorized routes. It further limits the classification of certain forest roads.

Blocks EPA Opinions on Pesticides [Section 447]: Prevents the EPA from using biological opinions related to pesticides and the Endangered Species Act, with a focus on ESA-listed salmon.

Blocks Clean Air Act Regulations of Cement Industry [Section 448]: Prohibits funding for the EPA to implement Clean Air Act regulations on the manufacture of Portland cement.

Blocks EPA Enforcement of Florida Water Quality Standards [Section 452]: Prohibits funding for the EPA to implement or enforce numeric Florida Water Quality Standards even though the state receives millions in federal funds for water projects.

Blocks EPA Greenhouse Gas Standard for Automobiles [Section 453]: Prohibits funding for the EPA to develop or finalize a new greenhouse gas standard for automobiles after model year 2016.

Blocks Clean Air Act Regulations of Fine Particles/Soot [Section 454]: Prohibits funding for the EPA to regulate certain levels of particulate matter in the air under the Clean Air Act.

Blocks EPA Regulation of Hard Rock Mining Operations [Section 455]: Prohibits funding for the EPA to develop additional financial assurance requirements for hard rock mining operations.

Requires BLM Notification of Land Exchanges [Section 458]: Amends the Federal Land Policy and Management Act of 1976 to require BLM and the Forest Service to provide written notification of land exchanges to adjacent landowners.

Blocks EPA Funds to Great Lake States due to Ballast Water Requirements [Section 459]: Prohibits certain Great Lakes states from receiving any EPA funding if they have adopted ballast water requirements that are more stringent than Coast Guard requirements. The Coast Guard believes this will block at least four Great Lake States from receiving any EPA funds.

Blocks EPA Guidelines on Misleading Pesticide Labels [Section 460]: Prohibits funding for the EPA to finalize guidelines on misleading information provided on pesticide labels.

Blocks Fictitious EPA Action on Ammonia Emissions[Section 461]: Prohibits funding for the EPA to develop or implement regulations related to ammonia emissions under the secondary standard for NOx and SOx.   EPA has already stated that it has no intention of doing so.

Blocks Clean Air Rules for Power Plants and Requires a Study That Ignores Public Health Benefit of the Clean Air Act [Section 462]: Directs the EPA to do a cumulative assessment of the impacts of EPA regulations, and prohibits funding for the “Utility MACT” and “Transport” rules.

Blocks Permit Requirements for Pesticide Discharge in Waterways [Title V]: Amends the Federal Insecticide, Fungicide, and Rodenticide Act and the Clean Water Act to eliminate requirements for chemical companies and agriculture to obtain permits for pesticides entering waterways.

• From the Democratic minority of the House of Representatives’ Committee on Appropriations

Speaker of the House John Boehner has insisted on enforcing a strategy whereby his party dictates all federal budget policy, no matter the law, no matter the makeup of Congress, no matter the risks to the future of the United States of America. Now, after a wasted week of partisan isolationism and refusal to negotiate, he has passed a radical one-sided plan that will hurt most Americans, while doing little to solve the debt crisis or stave off a credit downgrade.

After the Bolshevik revolution swept away centuries of Russian imperial history, Vladimir Lenin’s regime adopted an attitude of benign demolition—the view that destruction was itself a creative force, allowing for positive change that could not otherwise happen. In today’s American political scene, a constitutional scholar, a moderate and a vocational negotiator now finds himself in pitched battle with a Republican House caucus that has adopted Lenin’s reckless approach to governing.

The new Tea Party freshmen in Congress have imposed on their party, on their speaker, on the American people, a politics of allegedly benign demolition. Claiming to be patriots who love austerity, they demand we burn the village—impoverish millions of Americans and slow down the economy for a generation—in order to save it. The argument seems to be that American democracy is wrong, negotiation is wrong, bipartisanship is wrong, and that the more severely the process of governing is obstructed, the better.

It is vitally important to note two key aspects of the bill that passed the House of Representatives on Friday:

1. It contained no constructive vision whatsoever for how to upgrade and sustain vital programs like Medicare and Social Security—only cuts;
2. It did not in fact meet the structural reform demands of most Republicans, but included steep cuts to programs that benefit citizens every day, including at least 39 different radical reversals to environmental protections…

In order to “motivate” the rogue element in the Republican caucus, Speaker of the House John Boehner played a clip from the Ben Affleck movie ‘The Town’, in which Affleck’s character says to a friend, in a somewhat desperate and ominous way: ”I need your help. I can’t tell you what it is. You can never ask me about it later. And we’re gonna hurt some people.”

The use of the clip was widely criticized as bizarre and reckless. The clip clearly suggested there could be value in doing harm to people. The use of the clip as a motivational tool clearly suggested there was a consensus view that hurting people could be a pleasurable bonding experience and a way to feel energized. In short, it seemed to many a shameless revelation of the leadership’s view that the radical first-years could only be brought on board with the promise that someone would be harmed.

Critics denounced the stunt as sadistic and out of bounds, a stain on the Congress. But the motif itself reflects a wider political strategy, by which deliberately harming and hampering the ability of the federal government to operate efficiently is seen as a constructive and patriotic act.

After three decades of one of the two parties committing its entire fiscal policy to the relentless and mounting reduction of taxes, revenues are now at an historic low, just over 14% of GDP—and that is with slow growth—budget policy has become about deprivation. Even in the face of extreme revenue shortfalls, at a time of grudging economic growth and facing a national default, the radicals who favor benign demolition remain convinced they are behaving in the interests of the same entity—the nation—they seek to save.

Under the pressure of pervasive consequence, however, the passion for forced austerity—coupled with a doctrine of oppose, obstruct and eliminate, at all costs—quickly degrades into uncontrolled heat and light, blinding those who argue that setting the building on fire will save it from collapse. In other words, the Republican House caucus has adopted Lenin’s reckless attitude of benign demolition, in which harming innocents is applauded as progress.

This is not news, at least not entirely. Mitch McConnell, who yesterday told Harry Reid on the floor of the Senate that he would not negotiate in any way with him, openly declared that he would dedicate his leadership of the Senate majority to the destruction of Barack Obama’s presidency. Since he made that declaration, it has become increasingly difficult to discern any substantive effort on his part to play a constructive role in economic stewardship.

It may seem extreme to suggest that the Republican party has committed itself to sabotaging the American economy in order to “destroy the Obama presidency” , but when there is little evidence to the contrary, the question has to be raised. And what is so dangerous, given that dynamic, is the train of thought that demands a brutal, painful rearrangement of priorities, and which favors the onset of calamity to make the pain seem like a sensible choice.

It is not in the tradition of American conservatism that the system should be driven to calamity in order to achieve narrow ideological goals that are harmful to the majority of people in material ways. It is not in the tradition of American democracy for one party to put the nation itself in jeopardy in order to get an edge over its opponents.

The House Republican caucus has an absolute moral obligation to abandon this slide into Leninist demolition tactics, and to propose constructive solutions that edify every vital program and protection the American people expect and deserve. Hurting people is not democracy; it is the absence of moral consideration.

Democracy requires service to, not sidelining of the people’s interest. The demolition of a century’s worth of progress toward fairness and personal security in the American economy is a departure from the ethical demands of legitimate government, and the people should be expected to judge such behavior harshly, at their next opportunity to express their will through the vote.

Less than two hours after the passage of House Republicans passed a hobbled version of “cut, cap and balance”, the Senate rejected the so-called Boehner plan. This now opens the field of negotiation for a weekend of heated, anxious, uncomfortable compromise debt plan negotiations, in both houses, as leaders attempt to cobble together broad bipartisan coalitions in both houses.

The fact that 59 senators voted against the Boehner plan is significant, because it reflects the analysis that has been building up throughout the debt negotiations, which is that in both houses, broad coalitions including members from both parties, in both cases a majority Democrats, will have to support legislation that Speaker Boehner and Leader Reid can both agree to and persuade Pres. Obama to sign.

Of the 59 votes against the Boehner plan, 6 were Republicans. If the Reid plan wins support from just 7 Republicans, it will be immune to filibuster and will become the must-pass plan for the House of Representatives. Boehner will have to persuade a majority of House members to vote for a bill that includes no new revenues—the demand of Democrats—and no balanced budget amendment—the demand of Tea Party Republican.

If Speaker Boehner were to join all of the Democrats and 22 of his fellow Republicans in voting for a compromise plan, they would have a majority, and the president could sign a bipartisan debt plan from both houses. Senate minority leader Mitch McConnell is allegedly refusing to speak to the majority leader, Harry Reid, and Speaker Boehner may have a hard time reversing course on a strategy that seems to be geared toward depriving Obama of his leadership role.

It has been suggested that former Speaker Nancy Pelosi might help Boehner muster the votes needed to pass a bipartisan plan. But there is no easy way to see how Mr. Boehner can maneuver out of the situation he is in. Just a week ago, amid news the Speaker was walking out of debt negotiations, the Senate rejected a proposal similar to, but more ambitious than the one rejected today. Boehner has, during that time, alienated much of his own party, and nearly every Democrat, and will likely have to make additional concessions to both sides to win a coalition vote.

There are now rumors of a challenge to his speakership from within the Republican party, and it remains unclear whether Mr. Boehner’s driving calculation has been to achieve a viable deal to raise the debt ceiling or to appear to do so while protecting his leadership position against more radical elements in his party.

One analysis suggests that Boehner might be well served to court Democratic support, and that he might even have gone as far to the right as he has in order to demonstrate the relevance of his leadership. Were Democrats to have to choose between Mr. Boehner and one of the Tea Party radicals, the might work to elevate and defend the speaker, to prevent further attacks on key Democratic priorities.

Another analysis suggests Democrats have outwitted the Republicans at the political maneuvering, driving a wedge through the heart of Republican party politics and sowing disarray and confusion among the House caucus. The relative calm of Senate Republicans, some say, is a sign they may see this dynamic playing out, and prefer to keep out of the fray.

By this analysis, Speaker Boehner is now caught between a Republican majority that no longer trusts his leadership and which fears the party may come apart and a Democratic minority that shares very few of his policy priorities, and which—led by the tough, experienced and effective Pelosi—might be ready to demand some serious concessions.

Even as Sen. McConnell and Speaker Boehner were accusing Democrats of watching from the sidelines, NPR reports the pressure was already back on Boehner for some sort of substantive compromise:

At the same time Reid appealed for bipartisanship, he and other party leaders accused Boehner of caving in to extremists in the GOP ranks — “the last holdouts of the Tea Party,” Sen. Richard Durbin of Illinois called them.

Republicans conceded that the overnight delay had weakened Boehner’s hand in the endgame with Obama and Senate Democrats.

But Politico reports the House Republicans are planning to propose Sen. Reid’s measure in the House on Saturday, one to two days before it is expected to pass the Senate, in hopes of voting it down, effectively killing the two alternative legislative plans that remain available. Politico also reports there is expected to be little Republican support in the House for the Reid plan, though nearly every element of the plan is more in line with Republican than Democratic priorities. Democrats are expected to support it.

Should the Reid plan fail on Saturday, in the House, it would effectively call the president to action. He has said he will not allow the nation to default and he will not accept a plan that does not extend the debt ceiling far enough to prevent a credit downgrade, but he has not yet said he will invoke the 14th Amendment to prevent default or downgrade.

White House spokesman Jay Carney has said, over the last two days, that the grand bargain framework Speaker Boehner walked out on a week ago is still “on the table”. That measure included at least $800 billion in new revenues and as much as $4 trillion in deficit reduction and was expected to have support from both parties. Whether it would win a majority in either house is not yet clear.

After nearly two months of intense, relentless, high-pressure negotiations over whether and how to raise the ceiling for government borrowing, Speaker John Boehner’s debt-reduction plan passed the House of Representatives, with 218 Republican votes in favor, and 22 Republicans voting with all of the Democrats to oppose it. The measure is expected to fail, this evening, in the Senate.

Since Speaker Boehner walked out of talks last week, Sen. Reid, the leader of the Democratic majority in the Senate, has consistently said the limited “cut, cap and balance” model Boehner was trying to pass in the House would not get through the Senate. Yet after a week of corralling and cajoling his membership, Speaker Boehner passed precisely the plan neither Reid nor Pres. Obama intend to support.

The Senate plan is not yet ready for a floor vote, but Sen. Reid says he hopes to have it through the Senate by Sunday. This, however, leaves the entire world waiting as the foundation of the international financial system—the American Treasury bond—looks about to see its value sharply decreased by a national sovereign debt default and credit downgrade.

Rep. Boehner shouted angrily, as he spoke after the bill’s passage, that the fate of the nation was now in the hands of Pres. Obama and Leader Reid. Some expressed concern and surprise at his hostile tone, but given the opposition to his plan and the likelihood that he will be forced to endure even more withering attacks from all sides, before a final deal is reached, some say it is to be expected.

There is no report at this hour as to whether Rep. Pelosi, the House minority leader, and Speaker Boehner, have been discussing the necessary preparations for a complicated coalition vote, which will likely require both of them to make painful concessions that will anger some in their base. There is, however, mounting speculation that Pres. Obama may need to invoke the 14th Amendment ban on questioning outstanding debt, and institute a unilateral debt ceiling increase.

We will know more about what the weekend might look like, after the Senate has voted tonight.