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Tomasky writes: "There are three fronts - gas prices, jobs, and the budget - on which we should keep our eyes open for signs that the Republicans are trying to achieve Mitch McConnell's No. 1 goal for America."

Speaker John Boehner (with Senate Minority Leader Mitch McConnell) has suggested Republicans may renege on last year's debt-ceiling deal. (photo: Win McNamee/Getty Images)
Speaker John Boehner (with Senate Minority Leader Mitch McConnell) has suggested Republicans may renege on last year's debt-ceiling deal. (photo: Win McNamee/Getty Images)



GOP Plans to Sink the Economy

By Michael Tomasky, The Daily Beast

13 March 12

 

Every month brings improved job news - and bleaker prospects for the Republicans in November. Which is why they're contemplating economic sabotage as their only hope.

e're just under eight months away from Election Day now, which means that the GOP is starting to run out of time to think up new ways to ruin the economy so that Barack Obama doesn't get reelected. The Republicans have to do this delicately, of course; they can't be open about it lest it become too obvious that harming the economy is their goal. But they have to be aggressive enough about it for their efforts to bear some actual (rotten) fruit. There are three fronts - gas prices, jobs, and the budget - on which we should keep our eyes open for signs that the Republicans are trying to achieve Mitch McConnell's No. 1 goal for America.

Let's take them in order. The Republicans received joyous news Monday in the form of the Washington Post poll that showed Obama's numbers sinking in inverse proportion to rising gas prices. The gas situation is perfect for the GOP for two reasons. First, there's very little a president can actually do about gas prices. Second, even though those prices don't really tell us much about the more general economy, most people have the impression that they do, so for the out-party, it's just a free whack.

No one can blame Republicans for using Obama as a piñata on the issue. But here's what they can be blamed for. What is causing these high prices? Not low supply and high demand, which is what they teach you in school. In fact, supply is high - domestic oil production is at its highest point in years, higher under this allegedly business-hating president than under oilmen Bush and Cheney. And demand has been low because of the economy, although it's now picking up.

No, experts blame a lot of the increase on fervid speculation in the oil markets, and a chief reason for a lot of that speculation is anxiety in those markets about a possible war with Iran. Said anxiety, in turn, is heightened every time a politician blusters about how we have no choice now but to go start that war. So this kind of rhetoric is a nice little two-fer for Republicans, who get to sound like tough guys and can also take comfort in knowing that the more they talk up attacking Iran, the more they're doing their small part to keep prices high.

Now let's look to jobs. As you may know, while we've been getting these hopeful job reports these last few months, there is one sector that's been lagging notably: the public sector. In fact, during 2011 the public sector across the country - state and local governments, in addition to the feds - laid off massive numbers of people. Public-sector job losses averaged 22,000 a month in 2011. State and municipal governments are laying people off mainly for two reasons: the economy, which means they're bringing in less revenue, and the drastic cuts in federal aid, which have forced the layoffs and firings of nearly half a million public-sector workers in the last two years.

True, Republicans want smaller budgets on ideological grounds. But they also know very well that the more domestic discretionary spending cuts they can force, and the more public employees they can make states and cities shave off their payrolls, the greater the negative effect on the overall employment picture. If those nearly half-million people were still working, what would the unemployment rate be? Maybe down to a flat 8 percent.

Lately, though, things are starting to look worrisome on that front for Republicans. In February, the public sector cut just 6,000 workers, well down from last year's average. This indicates that the party might not be able to count for long on the public-sector numbers dragging down the private-sector ones. Hmmm. What to do about that?

Interestingly and conveniently, exactly what the Republicans on Capitol Hill are doing right now! They have been signaling lately that the budget numbers they agreed to with Democrats last year in the debt deal need to be revisited, and the cuts must be even deeper. Speaker John Boehner is open about the possibility of reneging. He has sent some mixed signals - he's also talked about trying to get the House to accept a transportation bill that the Senate has already passed by the eye-poppingly bipartisan margin of 85–11. New York Democratic Sen. Chuck Schumer says the bill can create 3 million jobs. The House returns to Washington next Monday. Where would you put the odds that this House of Representatives will vote, less than eight months before the election, to support a bill that Chuck Schumer boasts can produce 3 million jobs?

Every out-party does a little discreet cheering for the economy to be weak. But the GOP has put itself in a unique position. By opposing everything Obama wanted with such ferocity; by saying all those thousands of times that he had no clue about the economy; by sending out a parade of presidential candidates, from the semi-serious to the clown posse, all of whose central criticism of Obama is that he killed the economy - in all of these ways the party has more invested in economic failure than any out-party I can remember in my lifetime. Its best hope for now is gas prices, but even they eventually get lower, usually by late summer. Beyond that, all the GOP has to rely on is Mitt Romney's unstoppable charisma.

 

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+63 # bluepilgrim 2012-03-13 22:16
"No one can blame Republicans for using Obama as a piñata on the issue."
Sure they can. I do. It's dirty and deceptive.

About the only thing Obama can do to influence gas prices without mouunting a major campaign to frezze prices like Nixon did is calm down the talk about attacking Iran, which he has done to an extent. In other words, there is nothing subtle he can do, adjusting this or that a little: he would need to unsheath a vorpal dragon slayer and decapitate many monsters, including the Republicans, the rich, and the jabberwocky of capitalism itself. Republicans had better be careful about what they say they wish for -- although if Obama actually did reify FDR we would all be better for it.

As for the Republicans sinking the economy, we should be very worried about that -- they have so much practice at it and have done it so well.
 
 
-2 # economicminor 2012-03-15 13:49
That isn't entirely true.

There are things Obama could have and can do. He could oppose any more QE in any of the forms it has been delivered. He could oppose the TBTF institutions and their using client funds or QE funds to gamble/speculat e with as this money is what has driven up the commodity prices. He could have E. Holder actually do his job and prosecute some of those in the banking cartel who have used fraud and fiduciary violations to profit from the rest of us.

The reason oil and commodity prices are up and rising is due to excessive liquidity which is going towards gaming the commodity sector after it left gaming the housing sector. But that would put a squeeze on speculation, which has become the real economy.

Obama won't do that because they are his biggest campaign supporters..
 
 
+13 # angelfish 2012-03-13 22:29
If they do this or TRY to do any kind of Sabotage to our Economy there MUST be consequences! This is SERIOUS SH*T and if they try to harm this Country in ANY way, shape or form they should be charged with TREASON! Surely the FBI and CIA are on tho them. If not, we are toast!
 
 
+9 # unclewags 2012-03-14 07:23
Quoting angelfish:
If they do this or TRY to do any kind of Sabotage to our Economy there MUST be consequences! This is SERIOUS SH*T and if they try to harm this Country in ANY way, shape or form they should be charged with TREASON! Surely the FBI and CIA are on tho them. If not, we are toast!

The well heeled repugnants do NOT give a rat's turd for the economy of our nation nor do they giver a fiddler's farthing for our military service personnel. The contemporary concern of modern day Repugnicans is a preoccupation with the power of the Powerful which they feed off of like the "bottom feeders"which they are. Double entendre intended.
 
 
0 # economicminor 2012-03-15 13:51
As if the backers of the Demogogues, the banking cartel, has any different agenda. Both only believe in quarterly balance sheets and bonuses.
 
 
+11 # Patriot 2012-03-13 22:37
Pardon my evidently abysmal ignorance, but why *shouldn't* (or can't) Obama institute a price freeze on fuel prices? I am baldly admitting that I have no idea what a freeze takes -- doesn't the President just issue an Executive Order? Some help for the dope over here, please?
 
 
+4 # Majikman 2012-03-13 23:55
Nixon was the last prez who did price controls. I think all Obama needs to do is threaten to open up the reserve supply for the speculators to panic and the prices to drop. (Someone correct me if I'm wrong)
 
 
-4 # lnason@umassd.edu 2012-03-14 10:50
Majikman

Carter did price controls which caused shortages and long lines at the pumps. He had said that we only had enough world oil supply to last 6-8 years....

We don't have enough oil in the reserves to have much effect on world prices. We do have enough oil (and natural gas and coal) in the ground however to take all the speculators off the market in a flash if Obama agreed to open resources for exploration and production. Obama probably won't do this because our available resources are all fossil fuels which produce greenhouse gasses.

Lee Nason
New Bedford, Massachusetts
 
 
+2 # Billy Bob 2012-03-14 16:28
I'm curious why you're so defensive about the repuglicans. You claim you're not a repug but a "libertarian". Why is it that a self-described "libertarian" is so defensive about the repugs? It doesn't take a maintenence supervisor posing as a professor to notice that there's something suspicious in that.

billy bob
USA, Earth
 
 
+1 # bluepilgrim 2012-03-14 00:23
Good question. Nixon did a wage and proce freeze, but I don't know if the rules have changed or if he needed some sort of approval. I would guess he has the authority to do it.

I'd like to see a scholar who knows these things weigh in.
A blurb here:
http://www.econreview.com/events/wageprice1971b.htm

The politics might get nasty -- but what the heck -- how much nastier could they get?

TW -- just saw this by retired Republican House and Senate staffer. Powerful writing.

http://www.truth-out.org/why-republicans-need-remedial-math-their-budget-plans-explode-deficit/1331573876

Tuesday 13 March 2012
by: Mike Lofgren, Truthout | News Analysis
 
 
+5 # Ralph Averill 2012-03-14 06:13
Patriot,
I'm not sure but I think the President has to declare a national emergency in order to freeze gas prices. He would need the cooperation of Congress which the Republicans assuredly would not give him. It would be a bad move politically for Obama anyway. The Republicans would scream about government interference in the "free" market instead of "drill, drill, drill!"
 
 
+7 # Granny Weatherwax 2012-03-14 08:18
Although it is actually a possibility to be considered, it would become the stick with which the GOP would beat the Obama piñata.
They would call it "socialism", deride how the guy's "out of touch with the realities of the market" etc. This could be a stiff political price to pay.
Leaving aside for now why (supposedly perfect) markets (i.e. competition / zero-sum games) are always considered better that (supposedly evil) socialism (i.e. cooperation / win-win games), this was easier for Nixon because at the time because of a few reasons:

(1) The major economic crisis of the time was all blamed on gas prices (conveniently forgetting the Mexican debt default in the public discourse) and therefore acting about petroleum made poitical sense.

(2) There was still a USSR and soft power was still part of the US arsenal: you didn't want capitalism to look too crude and some dose of "socialism" in the government was sound propaganda.

(3) For the same reason Nixon could extend a hand to China, he could act in a more socialistic way without being branded a traitor.
 
 
+2 # tinkertoodle 2012-03-14 17:44
Remember the gas lines freezing the price of gas caused. The oil companies will just shut down supply
 
 
+31 # grouchy 2012-03-13 22:43
I don't know how much of this will eventually be proved, but in the meantime why don't the Dems do some heavy spin on these Repub dirty stuff themes just to let the Repubs explain themselves to America? Of course, this would take a bit of aggressive action by the Dems which in most cases goes against their wimp nature so I'm not betting they will do it. But it would be fun to watch the Repubs respond!
 
 
+12 # Ralph Averill 2012-03-14 06:19
Agreed! In spades! I have been screaming this since year one of the Bush II administration. Please excuse the military metaphore but the Republicans supply such a target-rich environment yet the Democrats refuse to roll out the artillary.
 
 
+9 # jimyoung 2012-03-14 07:52
This shouldn't be a race to the bottom in political ethics. I left the Republican party (after 5 generations going back to the founders) when a fund raiser told us we had to fight dirtier than Democrats. I am fiercely independent now and will not support distorting or fabricating items for political advantage by anyone. Facts are hard enough to come by, context even harder. I expect both sides to provide the information that favors their side but insist on being able to listen to both/all sides. Right or wrong, I must admit to developing prejudices against those who consistently and knowingly distort or lie the most. My experience is more limited to Republicans' slide down an ethical drain since I knew them better for most of my 65+ years. I see myself as a Devil's Advocate in their case, troubled by the seeming multiple times lower that they are willing to stoop, and their very well funded think tank farm system and ALEC type "Long March" strategy. I would listen to them more if they weren't so secretive, and their summaries came close to rationally explaining some of their research (the Cato institute comes to mind in some cases, great research, but weird conclusions on occasion). I don't follow Democrats in detail, but sense they are mere amateurs compared to the Republican machine that twisted my old party into something the founders would be appalled at.
 
 
-16 # lnason@umassd.edu 2012-03-13 23:23
The assertion that the Republicans are trying to sabotage the economy is pretty far-fetched. If it were true, a huge conspiracy would be required and such a huge conspiracy could never be kept secret.

Look at gas prices. The increasing costs are due to 1) speculation about disruptions in supply, 2) devaluation of the dollar, and 3) worldwide demand which is increasing because of China and India.

The portion attributable to supply and demand, cannot be eliminated but it can be ameliorated by freeing up American turf to exploration and development -- something that Obama has been dragging his feet on presumably because he is concerned about global warming.

The portion attributable to the devalued dollar is not Obama's fault (both Rs and Ds have contributed to this problem over the years), but Obama could stop it today by issuing orders to the Fed. Perhaps he doesn't want to do that because of the fragile economic recovery.

The portion attributable to speculation is driven both by Republican frontrunners tough talk and Obama's tough talk. He sounded every bit as hawkish as any Republican, Ron Paul excepted, at the AIPAC meeting.

Obama simply doesn't want to address the gas price issue. Maybe his reasons are good and maybe not, but he is being disingenuous by claiming that he cannot do so. Where is the frankness and honesty that we all expected of him?

Lee Nason
New Bedford, Massachusetts
 
 
+7 # jimyoung 2012-03-14 09:28
The new Republicans are even more concerned with sabotaging the Obama administration, no matter how many American jobs they destroy, or what they do to damage the velocity of money within the economy of real productive output created by Americans "earning" their money instead of a relative few getting by tax advantaged investment income. That tax advantaged investment income has not produced the jobs implied and too much comes from a rigged gambling game.

At the very least, tax it at the same rate as that earned by people in the same income brackets.
 
 
0 # Granny Weatherwax 2012-03-15 09:50
Gas prices are mostly due to speculation on commodity futures and driven by fear over a confrontation with Iran and a subsequent shut down of the traffic through the straight or Ormuz.

When it comes to "Obama could stop it today by issuing orders to the Fed", hey, wake up. Ever heard of the "independence" of the "Central bank", which happens to be a cartel of private banks?
 
 
+14 # franselr 2012-03-14 00:15
Everytime I hear a republican complain the price of gas has doubled or tripled since 2008 and blame it on Obama, I am reminded that my home was worth $500,000 in 2007 and is valued at $250,000 in 2012. I have not heard any republican take credit for that travesty. Let us not forget who got us into this predicament. Never vote republican or any politican who protect the monied interests.
 
 
+4 # TrueAmericanPatriot 2012-03-14 10:21
Quoting franselr:
Everytime I hear a republican complain the price of gas has doubled or tripled since 2008 and blame it on Obama, I am reminded that my home was worth $500,000 in 2007 and is valued at $250,000 in 2012. I have not heard any republican take credit for that travesty. Let us not forget who got us into this predicament. Never vote republican or any politican who protect the monied interests.

Well said Franselr! My question is why do these evil incarnate bastards continue to refer to themselves as "Americans," when they continue to act like they HATE this nation? Truth of the matter is, THEY HAVE BECOME THE COMMUNISTS AT HEART, THAT THEY CLAIMED TO HAVE DESPISED. The Greedy One Percenters have taken jobs overseas, stashed cash in offshore accounts, send our sons and daughters into wars based on lies, have laws in place to keep their kids out of war zones, and practice inside-trading with few consequences & virtually NO JAIL TIME!! All this has happened while most of the nation slept; many are still asleep!

WAKE UP AMERICA AND VOTE IN 2012!! THEY HAVE MADE THEIR PLAN KNOWN, SO VOTE 'EM OUT! VOTE EARLY; VOTE ABSENTEE!! GIVE A SENIOR A RIDE TO THE POLLS OR BRING THEM BALLOTS. OUR FUTURE IS AT STAKE!!!
 
 
-12 # lnason@umassd.edu 2012-03-14 10:25
franselr

You are correct to call the housing bubble a travesty but you are incorrect to blame it on the republicans. Both republicans and democrats over several decades poured trillions of dollars into housing and fueled the bubble. The ONLY effort to curb this abuse of american homeowners and taxpayers was made by George W. Bush when he tried to limit subprime lending at Fannie and Freddie. Unfortunately, the Democrats thought that Bush was attacking poor people and protected the mortgage giants from reforms. My own congressman, Barney Frank, led the calls to reject reform telling us that Bush efforts were an attack homeownership and the poor and adding that Fannie and Freddie were in fine financial shape.

Lee Nason
New Bedford, Massachusetts
 
 
+4 # tapelt 2012-03-14 04:02
You forgot to mention that gas prices were over $4 a gallon when George W Bush was President.
 
 
-10 # lnason@umassd.edu 2012-03-14 10:19
tapelt:

You are correct but that fact does not affect my argument.

But now that you've raised the issue, the high gasoline prices came down quickly and precipitously as soon as Bush opened up a lot more oil leases for exploration and production. Obama may object to this strategy based on his concerns about global warming, but the Bush strategy was very effective in reducing gasoline prices. The markets are anticipatory and if they see that more oil is coming, speculators back off and prices decline well before any of the oil hits the consumer marketplace.

Lee Nason
New Bedford, Massachusetts
 
 
+7 # Progressive Patriot 2012-03-14 05:44
They've been sinking the economy for 30 years. So, what's new?
 
 
+6 # Progressive Patriot 2012-03-14 05:50
Obama needs to issue an executive order stopping all short term speculation transactions ... the ones where people hold a stock for a few hours and sell, with the idea that they're going to make a lot of money. Either a freeze on them, or a graduated transaction tax that charges more the less time you hold the stock.
 
 
+7 # Art947 2012-03-14 07:30
Patriot asks, "why shouldn't, or can't Obama institute a price freeze on fuel prices?"

Note that approximately 60 cents of the cost of every gallon of gasoline that we buy at the pump is the result of speculators. The actions of these individuals is NOT controlled by our President, although the regulators could put a stop to much of this by requiring higher margins (amount of money that they have to put up) than are presently required. Price freezes rarely work except to limit supply and discourage distribution of product.

Our Republican "buddies" keep touting the great "free-market" system. If the free market actually worked, then gasoline prices would be lower due to decreased demand and relatively abundant supply.

Like everything else these days, much of the problem has been manufactured to increase the wealth of the 1% and negatively affect the rest of us.
 
 
-9 # lnason@umassd.edu 2012-03-14 10:12
Obama shouldn't institute a price freeze because that would cause shortages ala the Carter years.

I don't know where you get the cost of speculation from (seems high to me since gas prices have increased very little when one considers the devaluation of the dollar over the last 20 years) but an easier to accomplish break for consumers might be to cut back on the 50 cent per gallon tax that is levied on gasoline. At least that seems more feasible than trying to institute a surtax on the roughly 7 cents per gallon in profits that the oil companies are able to pass on to their shareholders.

Lee Nason
New Bedford, Massachusetts
 
 
+7 # Barbara K 2012-03-14 07:54
The Republicans have been sinking our economy for the past 3 years. Why on Earth would we want to return any of them to any kind of power over us again? When Bush sent 17 MILLION DOLLARS to foreign countries right after Obamma was eledted, it was obvious that they wanted to leave no means for our country to get out of the hole they left us in. They don't like the normal Americans, that is obvious. They are for only the wealthy.
 
 
-12 # lnason@umassd.edu 2012-03-14 10:07
barbarak

Huh? The Republicans only control the House and have been unable to get much of anything done. The Democrats in the Senate usually refuse to consider anything proposed by the house (such as a budget).

As for overspending, Bush did indeed overspend but the Obama Administration has added more than 50% to our debt -- far more than Bush ever dreamed of. US debt went from $5.8T to $11.9T during Bush's eight years in office. During Obama's first three years in office, the debt has now risen to nearly $17T. And under Obama our annual deficits are far in excess of a trillion dollars a year so there is no end of debt growth in sight.

Lee Nason
New Bedford, Massachusetts
 
 
+5 # Regina 2012-03-14 11:40
"Unable"? The Republicans have become the party of spite, sabotage, and bratty obstructionism in both houses of Congress, by a numerical majority in the House and the continuous filibuster in the Senate. They're dedicated to getting nothing enacted in order to make Obama fail. So they take every opportunity to make the country fail. And what really exercises them??? Obama's "complexion." Instead of enacting programs to restore job opportunities, they have embarked on a vast crusade against women's rights wrapped in the cloak of religion. Women and sane men will remember in November.
 
 
+8 # Ellioth 2012-03-14 08:45
It's quite extraordinary. The R's are willing, able and excited to do whatever it takes to destroy Obama - including destroying our economy, job creation and raise gas prices, and more devilish doings. We know this is true - Mitch McConnell has 1 top priority, and it's not about creating jobs or a robust economy. Quite the opposite. So, the Rs are able to do their dirty work, lie about it and fool the American people.

Now - please tell me why the Ds are so lame about putting this (real) story together and telling it like it is while at the same time telling the story about how we can create jobs, grow the economy and lower gas prices for real and for the long term in the U.S. We must support massive national and regional energy and resource efficiency initiatives and reduce our voracious appetite to waste energy. We can easily reduce our use by 40-50% in 5-10 years, thereby reducing demand and increasing supply. That is well within our reach. While becoming far more productive in our use of diminishing resources, we build out (as in INVEST) the renewable energy infrastructure so that within 1 generation the sun, wind, oceans and other completely clean, safe, renewable resources provide us with very cheap and inexhaustible sources of energy, forever. Imagine - we will NEVER have to send our young men and women to war for oil or other energy sources, nor will we send our hard earned dollars overseas to buy oil.
 
 
+4 # reiverpacific 2012-03-14 10:58
Don't be naive enough to put anything past the Reactionary-pug s, including conspiracy (note how close to "piracy" that is) at which they are masters. I well remember that we never thought Reagan would be elected either and by hook and crook he was, including daddy Bush doing a deal with the Iranian hostage-keepers to hold them until Carter's defeat was assured.
And they've just gotten many times worse since then but the same forces are at work to combat anything progressive!
I would now categorize them as "Medievalists", especially well represented by the current crop of wannabes -but that's just me.
It is more and more obvious and verifiable that the current gas price spike can be laid at the feet of over-speculatio n -Wall Street again. I've listened to several economists stating this on the alternative radio stations here in Oregon, so why the Hell doesn't the owner media -and I include PBS in this category now, come right out and tell it like it is thereby getting the word out to the "Average" American, who is hard to move in any direction but whom this is hitting pdirectly, especially the big truck and SUV crowd. But then they are in the thrall of those whose ONLY objective is to unseat Obama.
If there was a realistic alternative out there fine but the true progressives don't have a chance and they know it, so far to the right has the US become.
If the truth makes us free, this might be a good place to start.
 
 
0 # giraffee2012 2012-03-14 23:43
I thought the worst politician was Cheney - but all the GOP politicians look like him - especially "the turtle" --

Vote DEM Vote OBAMA -- and get out there and VOTE 2012 (drag anyone who needs a ride and / or tell them to get absentee ballots to miss the crowds)
 

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