Relevant and even prescient commentary on news, politics and the economy.

Why did the Clinton campaign say earlier this month that Trump’s statement that he plans to partially default on the national debt could work? (And, yes, that, as the NYT mentions today, is what the Clinton campaign said.)

Debates have broken out in Mrs. Clinton’s Brooklyn headquarters over the best approach to take. Some advisers worry that by running against Mr. Trump as she would a traditional Republican candidate, Mrs. Clinton is actually making the reality­ television star appear more legitimate.

This month, when Mr. Trump suggested he would reduce the national debt by negotiating with creditors to accept something less than full payment, economists dismissed the idea as fanciful. Hours later, the Clinton campaign sent out a news release about Mr. Trump’s “risky” idea of defaulting on the national debt with a response from Gene Sperling, formerly a senior economic adviser to both President Obama and Mr. Clinton, condemning the idea. The seriousness of the campaign’s response seemed to elevate a nonsensical proposal.

The seriousness of the campaign’s response seemed to elevate a nonsensical proposal. “That is a danger,” said Dan Pfeiffer, a former senior adviser to Mr. Obama. “You have to take the threat of Trump becoming president seriously, but you shouldn’t treat him as a serious person.”

Hillary Clinton Struggles to Find Footing in Unusual Race, Amy Chozick, Alexander Burns and Jonathan Martin, New York Times, today

Oh.  Brother.  The Clinton campaign characterized Trump’s statement that he wants to partially default on the national debt as “risky.” In other words, they said that, yeah, this would be a big risk, but there’s also the possibility that it could work!

Actually, when I read that sentence this morning in the Times I did remember reading an article about that response by the Clinton campaign shortly after it was made.  I remember thinking, “Risky?  Seriously?  Risky?  Not absurd?  Not a guarantee of global economic collapse and immediate major increase in the Treasury debt needed to pay off current debt that Trump was agreeing to pay off immediately in this refinance scheme?  No, merely risky?”

I also remember reading the Sperling response, which was concise, very good and easily understandable, I thought.  But, why the borderline-comical characterization of this proposal as risky?  Why not say it would be certain to cause global economic collapse and, by its own terms as a refinancing scheme, would require the borrowing of the money to pay the debt at far higher interest rates than the current full-faith-and-credit debt is borrowed at?

And, why wasn’t the candidate herself on television, immediately, saying these things?

What Trump actually said was that he was going to renegotiate with creditors.  It took me—me, a complete novice in anything resembling high finance—only a few hours after Trump’s comments hit he internet for me to post what I thought (okay, probably incorrectly, but it did make the point) was a hilarious parody of Trump sitting across the negotiating table from all the owners, worldwide, of Treasury securities, their lawyers and financial advisors in tow, negotiating reduced interest rates on these securities.

Okay, I posted this on an economics blog.  But the points on all of this could be made—and were made, by Sperling and many others—clearly, understandably, and easily.

The Times article quotes Clinton campaign official Jennifer Palmieri as telling one of the reporters on this article “Each tactic we use is designed for a particular purpose to either engage the press or reach a certain audience.”  The article summarized Palmieri’s explanation, paraphrasing her as saying that “[a]ny aggressive approach by Mrs. Clinton is potentially dangerous, however, because recent polls show she is viewed negatively by a majority of the electorate.”

What Palmieri apparently didn’t explain (at least it’s not reported) is why a response to Trump’s outlandish proposal as merely risky was expected possibly to engage the press, presumably because it was not.  It was instead, I guess, intended to reach a certain audience: the audience that political consultants for both parties long have been telling their clients respond negatively to candidates who seem “risky” or to policy proposals that seem (and may well be) risky.  “Risky” is one of the buzzwords that focus groups show should be used as often as possible to characterize the opponent or a policy proposal of the opponent.

And since the Clinton campaign limits its responses and campaign rhetoric to focus-grouped buzzwords and clichés, and “risky” seemed the most apropos of the words and phrases on the be-sure-to-use list, “risky” it was.

Good grace. Any aggressive approach by Mrs. Clinton is potentially dangerous, because recent polls show she is viewed negatively by a majority of the electorate?  Any aggressive approach by Mrs. Clinton is potentially dangerous, because recent polls show she is viewed negatively by a majority of the electorate?  Explaining to the public how ludicrous Trump’s partial-default proposal is, and how stupefyingly ignorant he is of even basic public-finance and economics mechanisms, is potentially dangerous, because recent polls show she is viewed negatively by a majority of the electorate?

Educating the public about Trump’s actual fiscal-policy proposals and matching them with Romney’s and Paul Ryan’s would be potentially dangerous, because recent polls show she is viewed negatively by a majority of the electorate?

If so, then Clinton should throw in the towel.  She and Sanders could ask their delegates to come together to nominate Warren, or something.  ‘Cuz this ain’t working, folks.

Looks Like It’s All Over But the Shouting.*

The New York Times’ report today by Maggie Haberman and Jonathan Martin on Clinton’s, Sanders’s and O’Malley’s speeches last night at the annual Iowa Democratic Party Jefferson-Jackson Dinner includes this:

“I’ve been told to stop shouting to end gun violence,” [Clinton] said, repeating a line she has begun using since Mr. Sanders said in the debate that “all the shouting in the world” would not keep guns out of the wrong hands. “I haven’t been shouting, but sometimes when a woman speaks out, some people think it’s shouting.”

I guess she’ll keep this up until Sanders or the mainstream media asks whether Clinton actually can’t recognize figurative speech and can’t distinguish between a statement to her about only her and one about groups of people that include members of both sexes.

Sanders’s comment was clear.  If she misunderstood it, that doesn’t speak well for her level of skill in understanding statements by people that presidents need to communicate with.  If instead she understood Sanders perfectly well but thinks the public has forgotten, and won’t be reminded of, what Sanders actually said, she’s mistaken.

The NYT article also mentions that by the time Clinton spoke, many of Sanders’s supporters already had left the hall in order to catch chartered buses or to party (or both).  That’s too bad, because I doubt that had they remained and heard that comment they would not have cared much for it.  In any event, I don’t see how this helps a candidate whose Achilles heel is a perception that she is somewhat dishonest by nature.

I don’t want to beat a dead horse, but I don’t think this horse is even nearly dead.  Sanders needs to recognize that apparently Clinton plans throughout the campaign to misrepresent his statements by selecting a clause or phrase and misrepresenting its context.  Sleights of hand will be a primary tool in her campaign.  He needs to respond to these quickly.



Sanders on Sunday laughed at her suggestion that his remarks were about gender.

“All that I can say is I am very proud of my record on women’s issues. I certainly do not have a problem with women speaking out — and I think what the secretary is doing there is taking words and misapplying them,” Sanders told [CNN’s Jake] Tapper. [Boldface added.]

“What I would say is if we are going to make some progress in dealing with these horrific massacres that we’re seeing, is that people have got to start all over this country talking to each other,” he said. “It’s not Hillary Clinton. You have some people who are shouting at other people all across this country. You know that. This nation is divided on this issue.”

Indeed. I think Clinton will find that this type of campaign tactic is very much out of tune with large swaths of Democratic voters right now.

Updated 10/25 at 12:22 p.m.


SECOND UPDATE: The New York Times’s Thomas Kaplan wrote on the Times’ political blog First Draft:

Hillary Rodham Clinton has seized on remarks Senator Bernie Sanders made in the first Democratic debate that “all the shouting in the world” would not keep guns out of the wrong hands, suggesting that Mr. Sanders used those words because of Mrs. Clinton’s gender.

“I haven’t been shouting, but sometimes when a woman speaks out, some people think it’s shouting,” she said at the Jefferson­-Jackson dinner in Des Moines, Iowa, on Saturday.

But Mr. Sanders’s past comments about gun control suggest that his “shouting” line is just that – a favored turn of phrase that he has used regularly in the past few months, long before Mrs. Clinton released her plan to address gun violence.

In July, Mr. Sanders, senator of Vermont, said that people needed to “stop shouting at each other” on the issue of guns. In August, he said that “people shouting at each other” about gun control “is not doing anybody any good.” And on Oct. 1, reacting to the mass shooting at a community college in Oregon, he said that the nation needed to “get beyond the shouting” on the issue.

Mrs. Clinton, the former secretary of state, announced her proposals to curb gun violence on Oct. 5, and in recent weeks she has been particularly vocal on the issue of gun control, a subject on which Mr. Sanders has a mixed.

Looks like this controversy is all over but the shouting.  Or is about to be.  And like her ‘Denmark’ sleight of hand, it’s not a plus for Clinton.

I think it’s a concern for Democrats that Clinton, who remains the party’s frontrunner, has an apparent compulsion to campaign in this way.  In this instance, she managed to trivialize sexism by claiming it so obviously falsely—the woman who cried wolf—and cheapen the very process of campaigning.  Why does she keep doing this kind of thing?


*The original title of this post was “Update to: “Hillary Clinton Says the NRA’s Leadership is Comprised Entirely of Women.  Seriously.”

Marco Rubio Needs to Travel More. Seriously. [Updated and lightly edited.]

Mr. President, I still live in the same working-class neighborhood I grew up in. My neighbors aren’t millionaires. They’re retirees who depend on Social Security and Medicare. They’re workers who have to get up early tomorrow morning and go to work to pay the bills. They’re immigrants, who came here because they were stuck in poverty in countries where the government dominated the economy.
— Marco Rubio, last night.

I lifted that quote from a Politico article by Jonathan Martin that went on to say that Rubio left school with more than $100,000 in student-loan debt, which he finished paying off only a few months ago. Presumably, those loans were government-sponsored.  Although maybe at the age of 18, he had some collateral to offer the bank.

Rubio’s parents, like so many of his working-class neighbors now, emigrated from Cuba before 2001, when the first of the two sets of Bush tax cuts were passed.  Apparently, he hasn’t checked the federal income tax rates on individuals and corporations when his parents and his neighbors came here because they were stuck in poverty in countries where the government dominated the economy.  Because, best as I can tell, that comment about immigrants from countries where the government dominated the economy was intended as a warning about Obama’s and the congressional Democrats’ plans to have the government dominate the economy.  

So I’d like some specifics.  What policies and programs, current and proposed, does he have in mind?  Exactly?  Maybe next time he’s interviewed by some high-profile journalist, he’ll be asked that.  And maybe he’ll answer.  But I doubt it.

Anyway, for now, I’m left to speculate that he means raising tax rates to Clinton-era tax levels for people with non-investment incomes above $250,000 a year, and on corporations, and on investment income.  He also might mean Obamacare, but that’s questionable unless he thinks that only people who qualify for Medicare get cancer or other serious illnesses, because he also said this last night:

[Medicare] provided my father the care he needed to battle cancer and ultimately die with dignity.  And it pays for the care my mother receives now.

But the title of this post suggests that Rubio travel more.  Both within this country and outside of it. First he should visit communities where immigrants from, say, Pakistan and Central America live.  People who came here to escape poverty but whose homeland governments did not, and do not, dominate the economy.*  

Then, if he has a passport, he might consider traveling outside the United States.  Maybe to Canada, or Germany, or Sweden, or Holland, or Australia.  Or France. Or, for that matter, Singapore.  Or Taiwan.  Or he could save the plane fare and just use the Internet to check the rates of poverty in those countries, the tax rates there, the social safety nets there, the education systems there, the healthcare systems there.

I didn’t watch the Rubio Show last night, so I missed the reaching-for-a-water-bottle-but-wishing-it-were-a-Vodka-bottle-instead moment.  I wish I’d watched, but I didn’t.  So I’m relying on tidbits reported by others.  And Paul Krugman provides one that, unlike the quotes above, have not garnered much attention.  It’s this:

This idea – that our problems were caused by a government that was too small – it’s just not true. In fact, a major cause of our recent downturn was a housing crisis created by reckless government policies.

Krugman points out that numerous studies, as well as observation by, say, ordinary folks, dispel that claim. Specifically, Krugman writes:

OK, leave on one side the caricature of Obama, with the usual mirror-image fallacy (we want smaller government, therefore liberals just want bigger government, never mind what it does); there we go with the “Barney Frank did it” story. Deregulation, the explosive growth of virtually unregulated shadow banking, lax lending standards by loan originators who sold their loans off as soon as they were made, had nothing to do with it — it was all the Community Reinvestment Act, Fannie, and Freddie.
Look, this is one of the most thoroughly researched topics out there, and every piece of the government-did-it thesis has been refuted; see Mike Konczal for a summary. No, the CRA wasn’t responsible for the epidemic of bad lending; no, Fannie and Freddie didn’t cause the housing bubble; no, the “high-risk” loans of the GSEs weren’t remotely as risky as subprime.

So I guess I was wrong when I said above that Rubio must have had only tax rates and Obamacare in mind.  He apparently also had finance-industry regulation in mind, too. And on this he was specific.

But on this too, I suggest some overseas travel–either physically, or virtually, on the Internet. He’d learn that Spain, Ireland and Iceland must have had a Fannie Mae and a Freddie Mac. Not to mention a Barney Frank. Because those countries’ current and recent fiscal and economic woes were caused entirely by a housing bubbles virtually identical to, or worse than, ours, spurred by Deregulation, the explosive growth of virtually unregulated shadow banking, lax lending standards by loan originators who sold their loans off as soon as they were made.

Then Rubio might consider returning to Canada and Germany, physically or virtually, and checking out why those countries had little or no such bubble.  And before he leaves, or after he returns, he should travel to Texas.  Yes, Texas, of all states.  It had almost no housing bubble.  Something to do with government involvement in the economy, i.e., legislation regulating the mortgage industry, post-savings-and-loan debacle, circa 1989.  State government, in this case.

What is the national debt of Canada and Germany?  And the poverty levels and standards of living in those countries?  

The Politico article, by the way, is called “Marco Rubio as the anti-Romney.”  The title of Krugman’s post indicates disagreement with that assessment. It’s called “Marco Rubio Has Learned Nothing.”  

But a majority of Americans, I think, have.  They’ve learned that you can’t judge a book by it’s jacket cover. And that ideology can’t substitute for fact.

UPDATE:  Oh, dear. As I said, I didn’t watch Rubio last night.  I also haven’t read a transcript of his speech.  And I didn’t know until just now, when I read Jazzbumpa’s post below, that Rubio said that proposals to deal with climate change, including trying to slow its progression, are attempts to have the government “control the weather.”

Um.  Yeah.  That’s the idea.  


Why do I think Chris Christie is the happiest person in America today?

UPDATE II: I’m getting the strong feeling that there are a lot of people who are downright dumbfounded by that speech last night–that this guy who’s being touted as the Republican savior went on national television and established himself as stunningly stupid.

We’re going to elect a global warming denier as president in 2016?  We’re going to elect as president someone who is unaware of such things as financial derivatives, and the role they played in the financial meltdown?  We’re going to elect as president someone who seems not to know that student loans and Medicare are government programs–or at least what it means that they are?  We’re going to elect as president someone who thinks Clinton-era tax rates are a government-dominated economy?

I’ll certainly agree that he’s no Romney.  Romney isn’t stupid, by any stretch.  He just pretended to be.  With Rubio, it’s apparently no act.

*Paragraph edited for clarity. 2/14. (I figured that since this post is getting a decent number of “hits” and Google+ links, it should be edited so that typos and such are corrected.)