John Podhoretz notes that Obama is trying to talk the markets into a panic as part of Obama’s political strategy (emphasis mine):
An enraged Barack Obama just took to the nation’s airwaves to announce his effort to strike a deal with Republican Speaker of the House John Boehner has fallen apart. Perhaps for the first time in American history, this president is literally using this press conference to create a financial panic over the weekend about the opening of the markets on Monday. He is warning of disaster on Monday. Clearly, he wants to use this as leverage to frighten the GOP into passing the plan proposed by Senate Minority Leader Mitch McConnell, which will push the debt ceiling problem into 2013, but it’s still an entirely new and astonishingly reckless gambit.
I agree with the analysis with one big exception, the use of the terms “first time” and “entirely new.”
In fact, talking down the markets and creating a sense of panic is one of the few things Obama has done well.
Recall February 2009, when Obama wanted to push through the Stimulus Plan and created a near panic in the markets which caused even the last bull to capitulate:
There’s an old saying on Wall Street that a bear market has not bottomed out until the last bull capitulates. News flash. The last bull has capitulated. Me.
…. For the first time in my adult life, I am convinced that we have a President who sees capitalism and markets as the enemy. There is no other explanation for the hyperbolic rhetoric Obama has used to create a sense of economic crisis far in excess of reality….
Obama seems to be wishing so hard for a depression, he might actually get it. Obama is well along in the process of creating a self-fulfilling prophecy in which he so talks down the economy, and so shakes markets, that people are paralyzed with fear allowing Obama to push his political agenda of creating a command economy.
So Obama’s friday afternoon press statement was not the first time and it will not be the last time. Crisis and panic are, in the words of Rahm Emanuel, just opportunities.
And in other news, the absolute, drop-dead, we default if the debt ceiling is not raised by August 2, uh, um, may not be August 2:
For months, markets have been girding themselves against the possibility that the U.S. will reach the limits of its borrowing ability on August 2 and default on its debts. But researchers at Barclays Capital think the real deadline may not be until a week later.
No one could have seen that coming.
Update: Jeff Dobbs has some more examples of Democratic doomsaying from 2008.
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Professor, did you expect anything less? Obama was trained in the Saul Alinsky/Cloward and Piven method of government.
Dems take a long weekend…
#Senate adjourns until 2 p.m. on Monday. Vote at 5:30 on confirmation of a judicial nomination.
RWrasse,Twitter
I get the feeling that Obama thought he could PWN the weekend talk shows by doing his “let’s start a financial panic” act on Friday afternoon. Unfortunately for him, the gore in Norway will steal the weekend .. and his message.
So, his Poppa’s dream was for his son to be the leader of a 3rd or 4th rate country and Obama’s close to achieving that goal? Just simply wonderful. Heck, Obama told us much about his goals for changing this country and now that those ends are in sight, we’re surprised at what he’s doing?
Ah, at least we can hope we’ll be able to change back to what we used to be before Obama! At least that’s my goal now!
No grace before the fall, please!
I think Obama really didn’t understand the nature of companies and capitalism and is frustrated with how resilient they are even as the economy continues to founder.
Corporations are not static enterprises like government entities who depend completely on government funding. They are managed by very intelligent, creative and determined people who adapt to changing environments and do what they have to do to survive and turn a profit.
Obama seems to have expected that he could squeeze them into submission. Yes, like Bush before him, he has his favorite crony companies like Government Motors, Government Electric, and Government Sachs, but even they are creating more jobs oversees than at home. He can’t seem to accept that they can flee the country or manage their affairs so that they are less exposed his destructive influence.
It has been a constant source of astonishment to me that a president can continue a war against what made it possible for the modern world exist: cheap, abundant oil. What is even more astonishing is how the media and “cultural elites” are alright with that. It’s a sick cultural suicide. Allowing ourselves to be stabbed in the heart with everyone cheering. And it is a bipartisan problem too. The enablers are everywhere.
We are in uncharted territory and have been for quite a while now so who knows what these computer-traded markets driven by proprietary algorithms nobody understands will do. But if they collapse, it’s not like there’s another America out there to save us. We should all be preparing on some level for the possibility of another world war in our time. Millions of people died between the collapse of the British Sterling as the reserve currency and the
The enablers are indeed everywhere, and they seem to have more enthusiasm and energy than most enablers. It is a case of the morally blind leading a multitude blind to history, science, and logic.
Phil, As I see it, ‘Crisis’ has been a byword for the Obama administrator since the beginning. “Don’t let a good crisis go to waste” was in the fabric of the Obama crew.
All these things from health care, cap and trade, carbon credits, debt increase, etc. are for one goal, create the mother of all crises. Obama and his crew and a good amount of Democrats, favor a giant govt and Obama was taught crisis was the way to do it.
Now don’t get me wrong, I don’t believe Obama is smart, I think he is of normal intelligence but surrounded by smart people of the same thinking as him. I think most would believe Obama to be narcissistic (most politians are) but am starting to truly believe him to be a sociopath.
I can’t remember where I heard it, but the best explanation of the debt ceiling deadline I’ve come across went something like “There is no concrete deadline, only increasing ambiguity of the legality of measures taken to stave off the inevitable”.
Sorry, accidentally hit “enter”.
Well over a hundred million of people died between the collapse of the British Sterling as the reserve currency and its replacement by the US Dollar. And we were compatible economic systems. Who knows what happens after the dollar is replaced in a totalitarian world. There will be a big war to settle that. Count on it.
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How the Obama-Boehner debt talks collapsed
Both sides seemed to think an accord was close. Then everything collapsed. Insiders describe what they think happened.
LA Times
I expect the Dems joker is the 14th Amendment ploy and I fully expect them to use it. Slick Willy said as much and there have been hints in other quarters.
ABC News
The 14th amendment gimmick may not work. I’ve already seen commentary that some traders of governmet debt will avoid dealing in those cusips. Nobody wants to be stuck with paper that the courts could deem to be illegitimate because it wasn’t authorized by Congress.
There is that argument. Will it stop Obama from exercising the 14th Amendment argument to rally his base? People who act ruthlessly often obtain surprisingly favorable results.
It also is a very useful club to beat the GOP into submission.
They already have the successful violation of the War Powers Resolution of 1973 to show how it will work.
There don’t have to be any buyers of US debt in order for them to let and sell more. Remember the last few rounds of “Quantitative Easing” consisted of the Federal Reserve buying US Treasuries.
Very little stops them from simply doing that again.
This ‘crisis’ can be solved in 2 seconds – vote a debt ceiling increase.
The markets know this is all a charade, which is why they haven’t panicked.
I don’t think stock markets will panic on Monday, but they might start getting nervous and selling off if this insanity goes on. Especially foreign markets that think we’re nuts. The bond market doesn’t even care, if the government shuts down, they will still get interest, no bonds issued, Grandma’s social security will get cut off first, economy and inflation expectations will tank, all good for bonds.
These ridiculous headlines just show is who is trying to blame whom with which constituency. OMG Obama hates business, he demands $800b in revenue in exchange for $3t in cost cuts! (all in a faux crisis created by the GOP)
It just shows the GOP doesn’t care about deficits, they only care about tax cuts for their most generous constituents, and of course who gets the blame.
Grandma’s SS check will only get cut off if the Democrats and President Obama and cut it off.
The only businesses Obama likes are the business that channel him money, join the corporatist club and echo his talking points. GE being the best example.
Gee, “tax cuts for the rich” the oldest, mangiest, tiredest progressive Dem talking point in existence.
The failure of the talks was caused by a revolt among the progressive Democrats. It echos what we have seen in Wisconsin, Minnesota, Indiana, and Ohio. The Dems don’t like democratic elections when they lose.
“CNN’s pollsters said the continuing downward spiral for the president was “driven in part by growing dissatisfaction on the left with the president’s track record in office.”
The news organization did not publish it anywhere on its CNN home page. It was buried on a separate web site at its specialized CNN Politics page.
CNN Polling Director Keating Holland explained that one major source of the dissatisfaction are reports that the president will concede to Republicans on entitlements: “It’s likely that this is a reaction to some of Obama’s recent actions, including his willingness to discuss major changes in Social Security and Medicare as part of the debt ceiling negotiations,” he concluded.
The president’s retreat means he is throwing the dice that public opinion will support the White House if there is no deal.
No one still knows what kind of plan will emerge. But if Democratic insiders who have an ear into the White House are clanging alarm bells, it’s possible Obama, hoping for a second term, may have been close to securing a Grand Bargain with congressional Republicans.
But it was not to be. Apparently he believes that it is more important to secure his own base rather than continue to see the continued slide in popularity among his supporters.”
Richard Pollock is the Washington, D.C., editor for Pajamas Media/?singlepage=true”>Richard Pollock is the Washington, D.C., editor for Pajamas Media
“I expect the Dems joker is the 14th Amendment ploy”
Tim Geithner has already dismissed this ploy, so if Obama decides to try it, Geithner, his other personal faults aside, won’t hesitate see his way to the door.
Here is Geithner threatening with the 14th Amendment. He even has a copy of the Constitution in his pocket with the 14th Amendment paper clipped.
I’m going to force the United States to default….it’s not going to happen,” Geithner insisted, as he held a copy of the Constitution open to the 14th Amendment.
Huffington Post
[…] help prepare you for the next Obama update post-meeting, I thought I’d share this little blast from the past just for a some perspective […]
[…] (Legal Insurrection) adds an interesting new dimension on the debt ceiling saga from yesterday: Obama may be trying to create a market panic on Monday for so the Republicans are forced to cave and give him even more power under the McConnell plan: I […]
The United States is in no position to participate in a world war generated by a financial crisis, because our president and commander in chief would not want us to “win.”
I hadn’t considered this angle before, and I think you are quite correct. Obama’s CLINTON dreams in a HOOVER world.
Obama vs. Boehner: Tax battle again plagues debt ceiling tax
by James Pethokoukis
“Boehner says they had an agreement on $800 billion in revenue, but then Obama asked for $400 billion post Gang of Six report. The “goal posts” were moved. That extra $400 billion would come from higher tax rates. That is an absolute, no-go, red-zone issue for Republicans. Where would the original $800 billion have come from? First, extra revenue from more economic growth generated by tax reform efficiencies. Second, and this is a pretty good guess based on what Boehner said, better tax enforcement. Here is Boehner describing where the money came from ” … and a tax system that was more efficient in collecting the taxes that were due the federal government>”
That is a classic item on the liberal agenda, and I can easily see Obama pushing it.”
“Despite what WH briefers may be saying, any new revenue in the framework would NOT have been generated by letting the current tax rates expire. That is simply false. Under the framework discussed, a CEILING was agreed upon that could generate $800 billion in new revenue over ten years. This would be done through comprehensive tax reform that would clear out deductions, credits, and loopholes in the system – and spur economic growth. After the gang of six plan came out, the White House moved the goal posts and insisted on $400 billion more in higher taxes – a 50% increase in revenue – and wanted that to be the FLOOR instead of the ceiling. The President acknowledged this in his remarks tonight. “Letting tax cuts expire” was never part of the tax reform agreed to.”
<a href="http://blogs.reuters.com/james-pethokoukis/2011/07/23/obama-vs-boehner-tax-battle-again-plagues-debt-ceiling-tax/"James Pethokoukis, Reuters
[…] Prof. Jacobson: “If nothing else, Obama does ‘panic’ well.” “Obama’s Friday afternoon press statement was not the first time and it will not be the […]
Thank goodness for put options.
Of course he does “panic” well, it’s third gear in his four-gear transmission. Take Credit, Pass Blame, Blow Smoke, Play Golf.
Obama is deliberately attempting to influence the markets in order to depress the par values on Treasuries and other bond instruments. Hey, SEC, stop looking at the porn on your computers, pay attention to George Soros, Obama’s main campaign contributor. Soros will make billions from the move after the debt ceiling issue is settled as par values return. Obama may not be the incompetent boob he appears to be, he is a crook seeking to fleece the entire country. Look at what he did with the Gulf of Mexico drilling permit ban, who did it benefit???? George Soros. Hello, wake up SEC, wake up…
I think dscott is right in that our president is taking orders, but I also believe that he would be doing this even if he weren’t.
It sounds like a fair number of ’08 BHO voters don’t plan to vote for him next time. I wonder how many who voted against him will change to voting for him? He hasn’t gone out of his way to reach past his base, in fact he seems committed to alienating those outside he usual circle. Time will tell.
Perhaps Obama will get over the delusions of economic schizophrenia that keep the Democrats believing that they can continue to spend at current levels merely by taxing the rich. First, the rich aren’t that rich and second, the federal government spending currently is that out of control. There isn’t an endless supply of money out there, even if they tax everybody.
The federal government has achieved the economic “Bridge Too Far” and will eminently lose all those programs that they complain about having to “give up” if they don’t come to grips with reality.
Even perennial liberal short-list-for-SCOTUS Harvard Law prof Lawrence Tribe has dismissed the 14th Amendment gambit as a non-starter. Since the quoted paragraph doesn’t repeal the clear language of Article I granting Congress the power, it is clearly referring to the then-controversial Civil War debt, and not changing the power to authorize debt.
Obama seeks panic as a diversion. He still hasn’t presented anything specific the public can consider. We’re less than two weeks away from his “drop-dead” date, and he’s given us NO proposal at all!
He must be required to be specific. Hiding behind generalities is all that’s keeping his petulant and incompetent hide at the giddy level of 42% job approval.
[…] guy who’d rather see it all burn down if he can’t have his way. In fact, he’ll spread the gasoline and light the match to get it […]