October 12, 2013 archive

Cross posted from The Stars Hollow Gazette

There are a few fools in the House and Senate who don’t understand the consequences of the US defaulting on its debt payments. Flirting with default is not an option to solve a budget impasse. It’s a recipe for global financial disaster.

The right’s antics could cause a Depression: The terrifying default aftermath

by David Dayen, Salon

Normally with a financial crisis, there’s at least agreement on the need for a response. Not with these lunatics

The biggest threat from the twin calamities of the government shutdown and the debt limit breach is not actually the real-world effect; it’s what happens the next day, and the day after that. In other words, the most frightening thing about default, which is much more problematic than the shutdown, is what happens afterward. [..]

And all of these outcomes pale in comparison to what would happen if the government defaulted on any of its debts. Put the misguided statements of debt limit denialist Republicans aside. Based on current cash on hand at the Treasury Department, roughly 32 percent of the funds owed (pdf) between Oct. 18 and Nov. 15 would have to go unpaid. That’s a massive reduction in federal spending, and would cause a significant hit to Gross Domestic Product. Prioritization of payments, which may be unconstitutional, would certainly be a logistical nightmare, forcing Treasury to rewire its payment system (pdf) and pick and choose between up to 100 million monthly invoices.

If one of the missed payments is to a holder of U.S. debt, then you have a default event that could cause credit markets to freeze, the U.S. dollar to plummet, and financial institutions to struggle to secure short-term lending on which they rely. With the dollar and the U.S. Treasury bond serving as a benchmark for world markets, Businessweek says that the resulting global apocalypse would dwarf the implosion of Lehman Brothers that precipitated the 2008 financial crisis. And it would injure the perceived stability of U.S. debt maybe forever, raising our borrowing rates as investors decide a country that threatens to default for no good reason isn’t worth putting their money into. [..]

Armed with the knowledge that Congress won’t meaningfully help recover the economy, the White House needs to think very hard about forsaking the various options they could use to try and avert a debt default. It’s not just that the alternative is a disaster; it’s a prolonged disaster.

IMF piles pressure on US to reconcile differences and prevent debt default

by Larry Elliot and Jill Treanor, The Guardian

Shares and oil prices rise in hope of six-week extension as OECD warns US deadlock threatens world economy

The International Monetary Fund and the Organisation for Economic Cooperation and Development both issued sharply worded warnings to Republicans and Democrats amid signs that America’s Asian creditors were becoming alarmed at the potential consequences of the impasse. [..]

Speculation about a deal emerged after Jack Lew, the US Treasury secretary said there would be chaos if the US defaulted – a message rammed home by the IMF’s Christine Lagarde and the OECD’s secretary general Angel Gurría.

Lagarde, the IMF’s managing director, said there would be very dangerous consequences for the US economy and very dangerous consequences outside the US economy if the default was not prevented.

She distanced herself from the infighting in Washington, noting: “The IMF does not make recommendations about how, politically, this can be resolved. We don’t take a political view. We just look at the economic consequences.

“When it affects the largest economy in the world, we are bound not only to look at the immediate domestic consequences but at what happens elsewhere, so that we can have a dialogue with our members to help them prepare. I hope we will be able to look back in a few weeks and say what a waste of time that was. But we have to look at the risks no matter how unlikely they are to materialise.”

On Wednesday, Massachusetts Senator Elizabeth Warren addressed the Senate warning that “this is no time to act out dangerous fantasies.”

“We’re in this position for one reason, and one reason only: because Congress told the government to spend more money than we have – and Congress told the Treasury to run up our debt to pay for it – but now Congress is threatening to run out on the bill,” Senator Warren said.  “…The idea that we can somehow renege on our debts without paying a huge price is a fantasy-and a very dangerous one.” [..]

“This fight is about financial responsibility. Financially responsible people don’t charge thousands on their credit cards and then tear up the bill when it arrives. Financially responsible nations don’t either….If we default on our debt, we could bring on a worldwide recession-a recession that would pummel hard-working middle class people, people who lost homes and jobs and retirement savings and who are barely getting back on their feet,” said Warren.

Talks between White House and Republicans fail to end US shutdown

by Dan Roberts, The Guardian

Hopes that a deal might be in sight disappear as Barack Obama and House speaker John Boehner fail to see eye to eye

Discussions between Barack Obama and House speaker John Boehner broke up after 90 minutes with little apparent progress, although there was a marked change in tone on both sides that suggests a deal could still be close. [..]

But the Republicans refused to lift a separate threat to spending authorisation, which has led to a partial shutdown of the government since 1 October.

Obama had insisted on at least a temporary reprieve from both threats before he would agree to negotiate over Republican demands to repeal his healthcare reforms and cut spending.

On Thursday night, it appeared the president had chosen to stand his ground and may have initially refused to accept the partial climbdown from Boehner.

The game continues and no one is hitting the brake.

Cross posted from The Stars Hollow Gazette

“This is the most closed, control-freak administration I’ve ever covered.“

That is what David E. Sanger, the chief Washington correspondent for the New York Times, told former Washington Post executive editor Leonard Downie. Sanger was one of 30 journalists Downie interviewed for a report on the Obama administration’s efforts to control leaks. Downie, who was one of the editors involved in the Post’s Watergate investigation, called the administration’s “war on leaks” the most aggressive since the Nixon administration.

The Obama Administration and the Press

by Leonard Downie Jr. with reporting by Sara Rafsky, Committee to Protect Journalists

Leak investigations and surveillance in post-9/11 America

U.S. President Barack Obama came into office pledging open government, but he has fallen short of his promise. Journalists and transparency advocates say the White House curbs routine disclosure of information and deploys its own media to evade scrutiny by the press. Aggressive prosecution of leakers of classified information and broad electronic surveillance programs deter government sources from speaking to journalists.

Compounding the concerns of journalists and the government officials they contact, news stories based on classified documents obtained from Snowden have revealed extensive surveillance of Americans’ telephone and e-mail traffic by the National Security Agency. Numerous Washington-based journalists told me that officials are reluctant to discuss even unclassified information with them because they fear that leak investigations and government surveillance make it more difficult for reporters to protect them as sources. “I worry now about calling somebody because the contact can be found out through a check of phone records or e-mails,” said veteran national security journalist R. Jeffrey Smith of the Center for Public Integrity, an influential nonprofit government accountability news organization in Washington. “It leaves a digital trail that makes it easier for the government to monitor those contacts,” he said.

“I think we have a real problem,” said New York Times national security reporter Scott Shane. “Most people are deterred by those leaks prosecutions. They’re scared to death. There’s a gray zone between classified and unclassified information, and most sources were in that gray zone. Sources are now afraid to enter that gray zone. It’s having a deterrent effect. If we consider aggressive press coverage of government activities being at the core of American democracy, this tips the balance heavily in favor of the government.”

At the same time, the journalists told me, designated administration spokesmen are often unresponsive or hostile to press inquiries, even when reporters have been sent to them by officials who won’t talk on their own. Despite President Barack Obama’s repeated promise that his administration would be the most open and transparent in American history, reporters and government transparency advocates said they are disappointed by its performance in improving access to the information they need.

In an interview with Amy Goodman on Democracy Now!, Leonard Downey discusses freedom of the press and the Obama administration.

I found that these leaks investigations and a program called the Insider Threat Program, instituted since the Bradley Manning leaks, that requires government employees to monitor each other to make sure that they’re not leaking information to anyone, including journalists, to have really frightened government officials. Many, many reporters that I interviewed here in Washington say that government officials are afraid to talk to them. They’re afraid that their telephone conversations and their email exchanges would be monitored. That is to say that investigators could come in later, as they did in several leaks investigations, and use their telephone and email records in order to find the contacts between government officials and reporters. So they’re simply scared to talk to reporters.

And this, this is not good, because-I just heard the president saying that he was concerned about the safety of our troops and our intelligence officers. It’s important that responsible, knowledgeable government officials be able to talk to reporters about these matters, so that, among other things, they can alert reporters to information that might be harmful to national security or harmful to human life, in which case no responsible news organization would publish those.

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

October 12 is the 285th day of the year (286th in leap years) in the Gregorian calendar. There are 80 days remaining until the end of the year.

On this day in 1810, Bavarian Crown Prince Louis, later King Louis I of Bavaria, marries Princess Therese von Sachsen-Hildburghausen.

The Bavarian royalty invited the citizens of Munich to attend the festivities, held on the fields in front of the city gates. These famous public fields were named Theresienwiese-“Therese’s fields”-in honor of the crown princess; although locals have since abbreviated the name simply to the “Wies’n.” Horse races in the presence of the royal family concluded the popular event, celebrated in varying forms all across Bavaria.

Oktoberfest is a 16-18 day festival held each year in Munich, Bavaria, Germany, running from late September to the first weekend in October. It is one of the most famous events in Germany and the world’s largest fair, with more than 5 million people attending every year. The Oktoberfest is an important part of Bavarian culture. Other cities across the world also hold Oktoberfest celebrations, modelled after the Munich event.

The Munich Oktoberfest, traditionally, takes place during the sixteen days up to and including the first Sunday in October. In 1994, the schedule was modified in response to German reunification so that if the first Sunday in October falls on the 1st or 2nd, then the festival will go on until October 3 (German Unity Day). Thus, the festival is now 17 days when the first Sunday is October 2 and 18 days when it is October 1. In 2010, the festival lasts until the first Monday in October, to mark the 200-year anniversary of the event. The festival is held in an area named the Theresienwiese (field, or meadow, of Therese), often called Wiesn for short, located near Munich’s centre.

Visitors eat huge amounts of traditional hearty fare such as Hendl (chicken), Schweinsbraten (roast pork), Schweinshaxe (ham hock), Steckerlfisch (grilled fish on a stick), Würstl (sausages) along with Brezn (Pretzel), Knödel (potato or bread dumplings), Kasspatzn (cheese noodles), Reiberdatschi (potato pancakes), Sauerkraut or Blaukraut (red cabbage) along with such Bavarian delicacies as Obatzda (a spiced cheese-butter spread) and Weisswurst (a white sausage).

First hundred years

In the year 1811, an agricultural show was added to boost Bavarian agriculture. The horse race persisted until 1960, the agricultural show still exists and it is held every four years on the southern part of the festival grounds. In 1816, carnival booths appeared; the main prizes were silver, porcelain, and jewelry. The founding citizens of Munich assumed responsibility for festival management in 1819, and it was agreed that the Oktoberfest would become an annual event. Later, it was lengthened and the date pushed forward, the reason being that days are longer and warmer at the end of September.

To honour the marriage of King Ludwig I and Therese of Bavaria, a parade took place for the first time in 1835. Since 1850, this has become a yearly event and an important component of the Oktoberfest. 8,000 people-mostly from Bavaria-in traditional costumes walk from Maximilian Street, through the centre of Munich, to the Oktoberfest. The march is led by the Münchner Kindl.

Since 1850, the statue of Bavaria has watched the Oktoberfest. This worldly Bavarian patron was first sketched by Leo von Klenze in a classic style and Ludwig Michael Schwanthaler romanticised and “Germanised” the draft; it was constructed by Johann Baptist Stiglmaier and Ferdinand von Miller.

In 1853, the Bavarian Ruhmeshalle was finished. In 1854, 3,000 residents of Munich succumbed to an epidemic of cholera, so the festival was cancelled. Also, in the year 1866, there was no Oktoberfest as Bavaria fought in the Austro-Prussian War. In 1870, the Franco-Prussian war was the reason for cancellation of the festival. In 1873, the festival was once more cancelled due to a cholera epidemic. In 1880, the electric light illuminated over 400 booths and tents (Albert Einstein helped install light bulbs in the Schottenhamel tent as an apprentice in his uncle’s electricity business in 1896). In 1881, booths selling bratwursts opened. Beer was first served in glass mugs in 1892.

At the end of the 19th century, a re-organization took place. Until then, there were games of skittles, large dance floors, and trees for climbing in the beer booths. They wanted more room for guests and musicians. The booths became beer halls.

In 1887, the Entry of the Oktoberfest Staff and Breweries took place for the first time. This event showcases the splendidly decorated horse teams of the breweries and the bands that play in the festival tents. This event always takes place on the first Saturday of the Oktoberfest and symbolises the official prelude to the Oktoberfest celebration

In the year 1910, Oktoberfest celebrated its 100th birthday. 120,000 litres of beer were poured. In 1913, the Braurosl was founded, which was the largest Oktoberfest beer tent of all time, with room for about 12,000 guests.

I have very fond memories of Oktoberfest. If you ever have the opportunity to visit Europe, do it in late September because this is a must see and experience.