“These [once-leading] regimes fell because they had used their nation’s resources poorly. Inefficient tax systems failed to capture a growing share of national wealth. … These persistent efforts by elites to resist or evade taxation, despite being massively undertaxed, led to excessive state debts and reduced the state’s ability to respond to domestic demands and foreign threats….

“In short a key difficulty faced by regimes in decline was selfish elites. Nations that were the richest countries in their day suffered fiscal crises because elites preferred to protect their private wealth, even at the expense of a deterioration of state finances, public services, and long-term international strength. By ‘selfish elites’ I do not mean, of course, simply elites’ aspirations to maintain disproportionate shares of wealth and power. That ambition is a universal constant. What I wish to emphasize is that in some eras in history, elites have identified their interests with the national state and the public weal, and they have been willing to tax themselves heavily to expand the influence and resources of their nation and their government. At other times, … elites have turned into competing factions, driven by self-enrichment at the expense of their rivals and opponents, even when that meant starving the national state of resources needed for public improvements and international competitiveness.”…

“Lack of consensus among U.S. elites has virtually immobilized efforts to deal with a persistent federal budget deficit, and has hamstrung state action in many foreign policy theaters and in much domestic policy planning. The only consensus that has prevailed in the last decade is precisely that which history tells us is the most disastrous, namely, the consensus that private consumption should take precedence over all public expenses, and that raising taxes to realistic levels to meet state obligations should be fiercely resisted. Hence the U.S. has been running a growing debt, sustained only by foreign borrowing.

“The result has been just what the history of earlier states who have been denied adequate taxation and relied on debt would lead us to expect: private individuals among the elite have become enormously richer, while basic public services that support the economy as a whole—primary and secondary education, airports, trains, roads, and bridges—are neglected, overburdened, and deteriorating.

I’m keeping an eye on the Super Congress. People are complaining about its constitutionality, but if it allows the commission to be free of Tea Party influence, it may have to remain independent. Perhaps a representative Democracy doesn’t work when “the people” are morons. If they’re unable to raise revenue even at this point then I may have to give up hope on the country. I’m not sure why I’m still optimistic.

(title via)

With the nation just days from a default, the chamber is at the mercy of a handful of people who believe they are on a mission from God.

“Where’s the chapel?” Rep. Tim Scott (R-S.C.) asked as he emerged from an arm-twisting session with Majority Leader Eric Cantor Thursday night. The freshman lawmaker explained that he wanted to “go to the divine source.”

In a room off the Capitol Rotunda, Scott joined a prayer session with fellow South Carolinian lawmakers. “I hope the Lord. . . gives men wisdom when they desperately need it,” Scott explained.

As it happens, the Lord gave Scott the wisdom to oppose Boehner. “I think divine inspiration already happened,” Scott said. “I was a ‘lean no’ and now I’m a ‘no.’” And he’s not much worried about default, saying: “I hope the Lord blesses our nation in a way that is measurable.”

My friend Philip Heying writes on Facebook:

Perhaps what we are seeing is a descent into the chaos that necessarily precedes an entirely new order. God knows we need an entirely new order. As the French say, “Chacun pour soi. Suave qui peut.”

Except the new order could be a theocracy. It’s the Egyptian revolution led by Michele Bachmann.

On the bright side, not all Christian leaders are this deluded:

Perhaps the most unusual debt ceiling meeting was one Obama had last week with a coalition of Christian religious leaders who urged him not to hammer the poor in trying to reduce the national debt.

It is, one participant said, “an unprecedented coalition,” including leaders from the Episcopal Church, the Salvation Army, the U.S. Conference of Catholic Bishops, the National Association of Evangelicals, the Evangelical Lutheran Church in America and the United Church of Christ.

The reason it’s unprecedented is because “we don’t agree on much else,” said John Carr of the Catholic Campaign for Human Development.

The coalition focuses on those Jesus called “the least of these” (Matthew 25:45), which speaks to obligations to look to the less fortunate. One goal it to get lawmakers to consider, “what would Jesus cut?” (Actually, to ask the question is probably to answer it.)

The religious media has covered the coalition, which is called the “Circle of Protection,” but the lamestream media generally hasn’t written much about its activities, which have included prayer vigils on the Hill and fasts. The group has been working the issue hard.

In Congress though, this is a minority position.  And this shouldn’t have to be broken down into two sides of a religious debate.  “Don’t make people suffer” doesn’t need a commandment.

This country seems as if it is beyond dysfunctional. It looks like a banana republic on the verge of economic collapse. Now that Nixon’s dream has come true and the GOP is fundamentally the party of the Confederacy, it was perhaps naive to think they could ever accept the legitimacy of this president, or treat him with respect or act as adults in the governing process.

But this is who they are. I longed for Obama to bridge this gulf in ideology. But he cannot bridge it alone, especially when the GOP is determined to burn the bridge entirely, even when presented with a deal so tilted to the right only true fanatics could possibly walk away from it. And so the very republic is being plunged into crisis and possible depression by a single, implacable, fanatical faction. Until they are defeated, the country remains in more peril than we know.

The party of anti-terrorism becomes the terrorists. But we knew this already. A reminder: Al-Qaeda’s strategy of low-level warfare, meant to drain the U.S. economically, will continue to pose an underestimated threat long after its leader’s death

Bin Laden’s strategy’s initial phase linked terrorist attacks directly to economic harm. A prime example of this is the September 11, 2001, attacks, in which a major economic target (the World Trade Center) was destroyed. It’s clear that Sept. 11 was intended to create a serious economic setback for the U.S. In a wide-ranging interview conducted by Al Jazeera’s Taysir Allouni in the month following the 9/11 attacks, bin Laden spoke at length about the extent of the economic damage the attacks had inflicted. “According to [the Americans'] own admissions,” he said, “the share of the losses on the Wall Street market reached 16%. They said that this number is a record.” His continued musings reveal how much thought he had devoted to the attack’s economic implications. “The gross amount that is traded in that market reaches $4 trillion,” he said. “So if we multiply 16% with $4 trillion to find out the loss that affected the stocks, it reaches $640 billion of losses.” He knew as well that the damage to America’s stock market was not the only economic impact. Factoring in building and construction losses, along with lost productivity, he concluded that the cost to the United States was “no less than $1 trillion.” Bin Laden was known for overestimating his group’s military prowess and ideological reach, but his overall damage estimates were accurate, and may in fact have been conservative.

Obama and the Democrats are fighting to get what the Republicans and the right-wing economic think tanks originally proposed they should do, and the GOP just keeps walking the goalposts to the right.

Granted, the Republican right is singularly terrible, but to suggest that the Democrats are “spineless” rather than letting the power shift naturally is as big a misread as “Obama is a socialist.” There is no mainstream liberalism anymore, as Hedges declares – it’s all corporatism.

Though I like hanging out on Daily Kos because there is some good debate on the issues, posts like this make me question that: Dems NOT Caving: Strategy Begins To Emerge

Hold on to your hats folks, looks like the dems are digging in and taking it to the Repubs and getting ready for the down and dirty trench warfare. Sen. Chuck Schumer launches the latest salvo.

Dems dig in: GOP trying to sabotage economy on purpose

In recent weeks, there’s been some question as to how far Dems are willing to go in making the explosive charge that Republicans are deliberately trying to sabotage the economy in order to improve their chances of defeating President Obama in 2012.

On a conference call just now with reporters, Senator Chuck Schumer made the most aggressive case we’ve heard yet along these lines, leaving little doubt that Dems are locking in behind this message as the deficit talks hit crunch time and as the 2012 campaign looms.

That’s great – but it’s rhetoric. Democrats don’t cave, they get what they want – it’s a conservative party, with some red meat rhetoric thrown around now and again. Which results in posts like this one, and then utter surprise when policy moves rightward. It’s the same type of rhetoric that the right throws to its base. If reality flies totally in the face of what was said in a speech or on a talk show, it’s time to start disbelieving the “tough talk.” It’s cathartic, maybe, but it’s useless, and perhaps even dangerous, as it makes people complacent that something’s getting done. All you really should do is look at the record, not the talk – as Chris Hedges mentions (which, admittedly, I wasn’t totally aware of): Obama’s record as senator was corporatist. His presidency isn’t much of a surprise.

It’s pretty depressing to stop believing that mainstream government isn’t going to accomplish anything. Plainly, political gamesmanship can be fun, but there has to come a point where mainstream Democrats take a look at the record of the party and realize it’s not just Republican light – it’s Republican. Unfortunately, the alternative party – the Christian fascist wing – is demonstrably worse. And if you think the Republican establishment wants to “crush Bachmann” I doubt it. With a Democratic presidency, they still get what they want, as the “middle” is still Republican policy. So long as terrifying politicians like Bachmann are part of the mainstream, policy can keep going further to the right. Bachmann scares people into voting Democrat. Democrats “compromise” with the far-right Republicans. End result: there’s no such thing as a Democrat any longer.

This is some bizarro-world shit we’re living in. What I still can’t get my head around is why so many at the top want to live in a privatized, ruined world, where children are literally starving. Are they just conscienceless? Lizards? What? Because Schumer is right – Republicans are actively trying to destroy the economy. But Democrats are complicit. I keep wanting to believe there’s a method to the madness. But maybe it’s just that money corrupts absolutely; maybe it’s just plain madness.

Mitt Romney says U.S. is “only inches away from ceasing to be a free market economy.”

The U.S. ranked ninth out of 179 nations on the list, with a score that placed it near the top of the “mostly free” category. The only nations to be considered more “free” than the U.S. were, in descending order, Hong Kong, Singapore, Australia, New Zealand, Switzerland, Canada, Ireland, and Denmark.

If the results of this study — which, we’ll remind readers, was produced by a staunchly conservative think tank — suggest that the U.S. is on the verge of socialism, then Lenin must be partying in his mauseoleum. For the U.S. to fall into the “mostly unfree” category, which is only the third-lowest category in the study, it would have to drop a whopping 83 slots, to a perch below such nations as Albania, Rwanda and Kazakhstan.

Four months after the Federal Communications Commission approved a hotly contested merger of Comcast and NBC Universal, one of the commissioners who voted for the deal said on Wednesday that she would soon join Comcast’s Washington lobbying office.

Meredith Attwell Baker, a former Commerce Department official who worked on telecommunications issues in George W. Bush’s administration, announced that she would leave the F.C.C. when her term expires at the end of June. At Comcast, she will serve as senior vice president for government affairs for NBC Universal, which Comcast acquired in January.

The announcement drew immediate criticism from some groups that had opposed the Comcast-NBC merger. They said the move was indicative of an ethically questionable revolving door between regulatory agencies and the companies they oversee.

So you need regulators for the regulators. And people wonder why the economy’s falling apart – must be socialism. Actually it’s fascism.

[I]t’s important to keep the costs of our post-9/11 wars in context. Even if you accept the highest estimates of the price tag (in which, for instance, Bin Laden gets some of the blame for the housing bubble, because it was enabled by post-9/11 interest rates), it’s still clear that the bulk of our current liabilities need to be laid, not at Al Qaeda’s door, but at our own. The War on Terror didn’t give us the financial crisis or the looming entitlement crunch, and if the first decade of the 21st century era gets remembered as the beginning of a long era of American decline, Washington, Wall Street and Main Street will all deserve much, much more blame than Osama Bin Laden deserves credit. He didn’t do this to us; we’ve done it to ourselves.

I don’t know if I buy this (my emphasis added).  There was a pervasive feeling of the world coming to an end in the years following 9-11.  Though the deregulation that led to the financial crisis began before 2001, it is not a stretch to say that perhaps there was so much hoarding of wealth during this period because of this feeling of dis-ease post 9-11. Life is short, who cares about sustainability when the world’s about to collapse. This is right: “He didn’t do this to us; we’ve done it to ourselves.” Who, then, are the criminals?

Rachel Maddow has a particularly telling piece on her show, showing how obsessed bin Laden was – not with death and destruction – but bringing down the American economy. Maddow comes as close as possible to saying that the execs that tanked the economy were practicing their own kind of terrorism, given that economic terrorism was a major point of 9-11. Wall St. succeeded where bin Laden didn’t. Whether it was intentional terrorism, or pathological carelessness, doesn’t entirely matter if the result was the same.

Visit msnbc.com for breaking news, world news, and news about the economy

Oil companies are making more money and less fuel

Gasoline prices are skyrocketing — and so are oil company profits.

Exxon Mobil Corp. earned nearly $11 billion in the first three months of the year, a rollicking 69% increase over its performance for the same period last year. That’s on sales of $114 billion.

It’s the same story for the other big oil companies. Royal Dutch Shell turned a profit of $6.3 billion in the first quarter, and BP — despite lingering costs from the Gulf Coast oil spill — made $7.1 billion.

Despite increasing demand, refiners are producing less gasoline and diesel in the U.S. than usual for this time of year….

“This is a page torn right out of the handbook of gouge-onomics,” said Charles Langley, senior gasoline analyst at the Utility Consumers’ Action Network in San Diego. “We call it the law of supply and demand: They supply less product and demand more money for it.”

Exhibit B (via):

How Goldman Sachs Created the Food Crisis

The result of Wall Street’s venture into grain and feed and livestock has been a shock to the global food production and delivery system. Not only does the world’s food supply have to contend with constricted supply and increased demand for real grain, but investment bankers have engineered an artificial upward pull on the price of grain futures. The result: Imaginary wheat dominates the price of real wheat, as speculators (traditionally one-fifth of the market) now outnumber bona-fide hedgers four-to-one.

Today, bankers and traders sit at the top of the food chain — the carnivores of the system, devouring everyone and everything below. Near the bottom toils the farmer. For him, the rising price of grain should have been a windfall, but speculation has also created spikes in everything the farmer must buy to grow his grain — from seed to fertilizer to diesel fuel. At the very bottom lies the consumer. The average American, who spends roughly 8 to 12 percent of her weekly paycheck on food, did not immediately feel the crunch of rising costs. But for the roughly 2-billion people across the world who spend more than 50 percent of their income on food, the effects have been staggering: 250 million people joined the ranks of the hungry in 2008, bringing the total of the world’s “food insecure” to a peak of 1 billion — a number never seen before.

The financial system poses an even greater risk to taxpayers than before the crisis, according to analysts at Standard & Poor’s. The next rescue could be about a trillion dollars costlier, the credit rating agency warned.

S&P put policymakers on notice, saying there’s “at least a one-in-three” chance that the U.S. government may lose its coveted AAA credit rating. Various risks could lead the agency to downgrade the Treasury’s credit worthiness, including policymakers’ penchant for rescuing bankers and traders from their failures.

“The potential for further extraordinary official assistance to large players in the U.S. financial sector poses a negative risk to the government’s credit rating,” S&P said in its Monday report.

But, the agency’s analysts warned, “we believe the risks from the U.S. financial sector are higher than we considered them to be before 2008.”

So this guy is right.

Meanwhile, Obama wanted S&P to not downgrade the U.S.’s rating. So: Obama wants the ratings agency that had everything to do with the financial crisis by giving AAA ratings to bad credit loans to do the same thing for the U.S. government. Though Obama said all the right things in his recent speech on the economy, it was a 2012 campaign speech, and he seems very much more concerned with political appearances than political action.

Meanwhile, the current bailout is corporate welfare, while the right complains incessantly about those who abuse the welfare system:

The history of the bailout era reads like one of those awful stories about what happens when a long-dormant criminal compulsion goes unchecked. The Peeping Tom next door stares through a few bathroom windows, doesn’t get caught, and decides to break in and steal a pair of panties. Next thing you know, he’s upgraded to homemade dungeons, tri-state serial rampages and throwing cheerleaders into a panel truck.

It was the same with the bailouts. They started out small, with the government throwing a few hundred billion in public money to prop up genuinely insolvent firms like Bear Stearns and AIG. Then came TARP and a few other programs that were designed to stave off bank failures and dispose of the toxic mortgage-backed securities that were a root cause of the financial crisis. But before long, the Fed began buying up every distressed investment on Wall Street, even those that were in no danger of widespread defaults: commercial real estate loans, credit- card loans, auto loans, student loans, even loans backed by the Small Business Administration. What started off as a targeted effort to stop the bleeding in a few specific trouble spots became a gigantic feeding frenzy. It was “free money for shit,” says Barry Ritholtz, author of Bailout Nation. “It turned into ‘Give us your crap that you can’t get rid of otherwise.’ “

It’s all Ayn Rand’s fault. I found this really disturbing:

It took a while for Greenspan and Rand to warm to one another. She nicknamed him “the undertaker,” owing to his dark clothes and mournful air, and he, a self-avowed logical positivist, required a certain amount of wooing on the philosophical side. But in time he became fiercely devoted to Rand, one of her most trusted confidants; he taught her something of the economics she shoehorned into Atlas Shrugged. He wrote for The Objectivist magazine, and stayed a close friend until her death in 1982.

Though the schemes of both these idealists crashed mightily and catastrophically to earth, both steadfastly refused ever to regret or repudiate the follies of Objectivism. The shocking thing is that despite all the evidence—which could not possibly be more damning—many on Wall Street and on the right continue to insist that Ayn Rand is a genius and that Objectivism is the answer to all mankind’s problems.

You think if they were truly Objectivists, they’d take a look at objective reality and see the countless examples of how deregulation doesn’t work. But people in the financial sector, and government, seem to be high-functioning lunatics who see black as white despite all available evidence. Though Rand was an “atheist,” Objectivism seems like a religion like any other, with the same degree of fundamentalist belief.