Good news?

The debate to raise the federal government's debt ceiling has exposed, or shone a spotlight on what was already obvious, namely, the incompetence and ideological intransigence of Democrats, Republicans and the President. No one looks good, and the bad of it is that we the people are the ones suffering; these jerks get to keep their jobs – for now, at least. One idea that died quicker than ethics do in Washington was a grand bargain.


After all, who really wants a deal struck by one of the most inept bargainers-in-chief ever to live in the White House and a Republican leadership trapped by the ideological intransigence of right-wing extremists?

Obama looks awful. He would have a difficult time convincing a baseball player to spit. The Republican dog is wagged by the right-wing tail.

We don’t need a grand bargain — not now, or six months from now, or ever. What we need are responsible politicians who understand a little bit about economics and who are willing to work in the public interest day after day, year after year. Even a short-term debt-ceiling reprieve that kicks the can down the road would be preferable to an ill-advised grand bargain that locks in harmful spending cuts for a decade.

Obama has caved in to the right wing. The Republican party has caved in to the right wing. So we have the nation's politics dominated by a hundred right wing nuts who actually believe that it is better to have the nation lose its credit rating than to compromise.

any spectacle that sees McConnell and Reid emerge as the heroes is a sorry one, indeed. 

Indeed. Those two have to be some of the most mediocre politicians in modern US history. Where is Roman Hukstra when we need him?

it’s important to have no illusions going into an election year. Obama, as noted, has confirmed his reputation for ineptitude. Voters may choose to return him to office, but they will have to adjust their expectations downward.

What a disappointment, too. So much promise, so much hope, and so little done.

House Speaker John Boehner and Majority Leader Eric Cantor, meanwhile, can continue their internecine warfare, and congressional Republicans can bicker their way out of majority control of the House.

That used to seem exciting, but what would be the alternative? Democrats in control? They're as bad.

It would be sad if the Republicans, who have shown themselves willing to sacrifice the welfare of the American people in order to sabotage the Obama presidency, succeeded in their plan.

They will do everything to sabotage Obama, including screwing the country, arrogant in their belief they will get into power and fix things.

But Obama, who suffers from the hubris of thinking always he’s the smartest guy in the room, walked right into their trap in accepting the debt-ceiling debate on their terms instead of exercising leadership and keeping the focus on unemployment.

His idea of leadership is to wait, wait some more, and see what happens.

It would be a long shot for Bloomberg or anyone else to step up as a third-party candidate and a much longer shot for such a candidate to capture the White House. It’s never happened since our two-party system became the norm, but then the U.S. has never defaulted before, either. 

Bloomberg? I just don't see him appealing to enough voters. I think he's arrogant, self-centered, aloof, and convinced he is about as smart and effective a leader as is possible. But, hey, who knows?

It depends in the end on how severe the political backlash to this debacle will be. At present, regardless of the actual outcome of this nauseating debate, it looks like the public frustration and disgust with Washington that has been simmering for some years is ready to boil over.

It would be nice if there was some public anger, but it ain't gonna happen.

Washington swaps magic show for vaudeville

The Gang of Six, breathless reporters told us this week, has found a solution that tons of senators in both parties are willing to go along with. It will cut $3.7 trillion from the deficit over the next 10 years while lowering taxes. Wow! How did this group of Democratic and Republican senators do it? Well, for starters they’re going to save $500 billion just by changing the way inflation is calculated. And the rest will be put out to committee — you know, with six-month deadlines and specific targets and such.

Lower the deficit and cut taxes? Perfect. Except for the details: accounting sleight of hand generates half a trillion dollars, and the other three trillion? Figure that out later, of course.

The Gang of Six plan has now replaced the one proposed last week by Senate Republican leader Mitch McConnell to simply abdicate responsibility for the debt ceiling as the favored way for Republicans to get out of the corner they’d painted themselves into.

I considered that proposal unconstitutional: it would give the president the right to change the debt limit, a congressional constitutional duty, so the Congress could avoid having to vote on it. Why not just get rid of the debt limit? Why, that would take away the opportunity for congressional posturing and media performance.

We all know how important it is to keep cutting taxes, so that we have more of our own money to spend on the resulting higher costs for health care, education, personal security and all those other needs that most countries take care of by, well, paying taxes.

But, we couldn't do that ... that's, that's ... socialism, that's what that is.

Unbalanced and opinionated

Typical Wall Street Journal slant on the news.

BP PLC, under intense legal and political pressure from President Barack Obama, agreed Wednesday to put $20 billion into a fund to compensate victims of the Gulf oil spill, and said it would cancel shareholder dividends for the first three quarters of this year to offset that cost. BP said it would pay another $100 million to a separate fund to help oil-industry workers sidelined by the Obama administration's moratorium on deepwater drilling.

The payments far exceed the letter of U.S. law, which caps economic liabilities in oil spills at just $75 million. BP agreed to waive that limit. In a pact hammered out in a four-hour White House bargaining session, BP agreed to "set aside" $20 billion in U.S. assets as a guarantee that it would make good on the promised $20 billion in cash by 2013.

The deal is the latest in a series of interventions by the Obama administration in the operations of private businesses in crisis. Mr. Obama sent an emissary to demand that the then-head of General Motors Corp., Rick Wagoner, resign prior to the government-led rescue of GM. The administration has pressed Wall Street banks in the aftermath of the financial crisis, calling for sharp cuts in executive pay.

If GM was to receive taxpayer funds, the government had a legitimate right to write conditions on disbursing said funds. It is more than the Administration that has pressed for cuts in executive pay; Congress and the public have, too.

Turmoil drives Spain's rival parties together

The Greek disease in not merely Greek: Portugal and Spain, Ireland, and even the UK are suspected of being economically subject to troubles, if not calamity. Last week Spain's credit rating was cut one notch. As much of this is psychological, preventive action is important. An article in today's Journal adresses Spain: its two major political parties have joined in taking preventive action.

As wild fires in the financial markets licked at Spain's door, Prime Minister José Luis Rodríguez Zapatero huddled Wednesday with opposition leader Mariano Rajoy in an effort to stop the turmoil from further hitting the country.

Maybe we should send Mitch McConnell and Harry Reid to Madrid.

Messrs. Zapatero and Rajoy agreed Wednesday to push ailing savings banks into mergers with stronger peers by June 30. The agreement is important because many of Spain's unlisted savings banks are controlled by regional governments, which in turn are controlled by one of Spain's two main parties. But even this pact doesn't guarantee any bank mergers will happen.

So Spanish political parties own many of the nation's banks. What would US lefties say to that?

Like Watergate, on a shoestring

U.S. household wealth that evaporated during the financial crisis: $15 trillion.

Write-downs at the world's largest banks: $4 trillion.

Stock market value destroyed as measured by the Dow Jones Industrial Average: $2.3 trillion.

The price the nation is paying to understand what caused the whole mess: priceless, right?

Actually, just $8 million.

The Financial Crisis Inquiry Commission, headed by former California state Treasurer Phil Angelides, may have a broad mandate to investigate the causes of the financial collapse of 2008, but it has a small budget and short time frame.

The bipartisan commission and its 50-person staff has to come up with its report by mid-December.

"Not to whine or complain," Mr. Angelides said in a discussion hosted by The Wall Street Journal's editorial board Thursday, "But the Lehman examiner had a $38 million budget and 15 months to complete his report on one company."

Mr. Angelides and Vice Chairman Bill Thomas, a Republican former congressman, weren't exactly beating their chests about uncovering a bombshell.

"I believe we are doing a pretty decent job," Mr. Thomas said. "We are only looking at the tip of the iceberg."

Modeled after the commission that investigated the 9/11 terrorist attacks, the financial commission was set up by Congress with six members appointed by Democrats and four appointed by Republicans. (The 9/11 commission consisted of five Democrats and five Republicans, and had a budget of $15 million.) Mr. Angelides, a Democrat, said the goal is to have unanimous approval of the report by the time it is released. So far, there have been no big squabbles along partisan lines, he said.

Messrs. Angelides and Thomas agreed that, after interviewing about 200 people, the most surprising observation is how little bankers and regulators knew about the long-term consequences of their financial products. "Or they knew what would happen and they failed to act," Mr. Angelides said.

The commission can subpoena regulators and bankers, but hasn't used that power. "We've come close to the edge" in terms of issuing a subpoena, Mr. Thomas said. They also are relying on the increasing number of books that have been written about the crisis or people in the process of writing books.

Next up before the committee on Wednesday and Thursday is a session on subprime lending starring former Citigroup CEO Charles Prince and former Federal Reserve Chairman Alan Greenspan

When asked whether the commission would be digging into Fannie Mae and Freddie Mac's role into the subprime-lending calamity, Mr. Angelides said, "We are going to scrub them hard."

Will Goldman Sachs Group, whose CEO Mr. Angelides likened to a used-car salesman at the commission's first hearing in January, be making another appearance? On this, Mr. Angelides kept us in suspense.

By MICHAEL CORKERY

* DEAL JOURNAL
* APRIL 1, 2010, 8:31 P.M. ET

Breaking Insight From WSJ.com
Like Watergate, On a Shoestring
Panel Will Try to Explain Global Financial Crisis On an $8 Million Budget