TIMOTHY NOAH SEPTEMBER 15, 2011
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From House Speaker John Boehner's jobs speech today at the Economic Club of Washington:
"[If] you talk to anybody outside of Washington who has to meet a payroll, they’ll tell you that out-of-control spending in Washington is one of the things that concerns them the most about our future.
"In New York City back in May, I warned that if we don’t take action soon, the markets will do it for us.
"Last month, the markets took action, in the form of a downgrade and the possibility of future downgrades that caused the markets to tumble."
It's a neat construct, but the stock market tumbled on Aug. 4. The Standard & Poor's downgrade of U.S. Treasury bonds (from AAA to AA+) happened on the evening of Aug. 5. If you want to argue that rumors of the impending downgrade crashed the market, you'll have to explain why, after the crash, investors rushed to buy Treasuries. If they were worrying about the S&P downgrade, investors would have rushed to sell Treasuries.
In fact, investors were mostly freaking out about economic turmoil in the Eurozone. To the extent they were freaking out about anything happening in Washington, it was about the terrifying game of chicken that Boehner and his fellow House and Senate Republicans had just finished playing with the debt ceiling.
Update: Dean Baker, I just noticed, wrote about this bit of Republican mythology on TNR's Web site last month.
11 comments
The Republican game plan is to cause economic disasters and then blame the Obama administration. Simple, disgraceful, treasonous.
- roidubouloi
September 15, 2011 at 4:47pm
this gives new meaning to self-fulfilling prophecy. I (Boehner) will make a prophecy, and then I will fulfill it. (to the extent that the markets responded to the game of chicken)
- wilburuva3
September 15, 2011 at 4:54pm
True that, Roid. If it works, can I make plans to meet you on November 3, 2013 at a lamppost-to-be-determined for the public stringing up of John Boehner and President Perry by torch-wielding mobs of desperate, unemployed sansculottes?
- wildboy
September 15, 2011 at 5:04pm
I'll bring the rope.
- ballston
September 15, 2011 at 5:19pm
Golly Gee, John, when you aren't being a corporate robot, country club golf pimp, have you noticed you are Speaker of the U.S. House of Represenatives? Do you think you might be part of "Washington?" This is one of the silliest political talking points in America.
- MikeB.
September 15, 2011 at 5:56pm
What next Tim? "It is clear that the repeal of DADT has led to increased 'uncertainty' among businesses that the US will be able to repel terrorist attacks. Therefore we must shut the government down until DADT is placed back on the books."
- MikeB.
September 15, 2011 at 5:59pm
The bitter roid is back. He was absent when Jonathan announced he was leaving and many TNR commenters lined up to praise him and to see him off. R's absence speaks volumes.
- liberalref
September 15, 2011 at 8:56pm
When Republicans talk to businesses they always say that the business owners are worried about too much spending, regulation and uncertainty with taxes and the ACA. These businesses don't think about unemployment, or foreclosures, or business closings, or layoffs, the recession, or any of the things that bother the people I know; and especially by people who have lost their income in the current recession. Well, that settles it. We need more businesses who are worried about taxes, the ACA and regulation. At least they have the luxury to worry about such things.
- Nusholtz
September 15, 2011 at 9:59pm
The main thing that I'm worried about along with most other small business owners is THE LACK of CONSUMER DEMAND . Other items would be overhead factors like rent and utility costs. Sure there are regulatory issues for firms with employees and that are in businesses that can effect the environment , but when customers are buying , you won't hear too many complaints. Interesting how the health care industry is still adding jobs all these months after the ACA is law . Any firm that wants to lower their tax burden can do so by hiring workers and making capital investments . They can both be directly written off income . As usual , the Speaker fails to mention Standard & Poors own text in citing reasons for the downgrade : Republican intransigence in failing to consider increased revenues as a response to our budget deficits . How well is austerity working in Europe ?
- alanwilkov
September 15, 2011 at 11:03pm
alanwilkov: Of course that's the main problem. And the answer to it is to get more money into people's hands by whatever means so they can start spending again. Then, as consumer demand goes up, companies can start hiring. But the Republicans have proclaimed that it's "uncertainty" that's hampering U.S. companies, and the way to solve that is to gut necessary regulations. Eliminating regulations across the board and giving another huge tax cut to the rich, now relabeled as "job creators," will usher in a new golden age. This is absolute nonsense, of course, but the Republicans are convinced that with sufficient repetition, "It'll play in Peoria."
- DAVIDDREIER@EARTHLINK.NET-old
September 16, 2011 at 9:39am
I think the real uncertainty that frightens small business owners is not the ACA (that was addressed at the beginning of the year with adjustments in insurance rates), it is the indeed the lack of demand, but in the professional services sector it is getting clients to pay on time or at all. I won't even get into the "uncertainty" one feels in not knowing if the GOP are going to go complete bat-shit crazy and destroy the economy from within or just go bat-shit crazy and destroy the economy from within.
- singlspeed
September 16, 2011 at 10:08am