or the MAGA extremists start receiving indictments for their role in J6, the radical GOP accelerationists get purged and bi-partisan isn't a dirty word.
McCarthy losing is bad for equity and debt mkts
- Thread starter destriero
- Start date
or the MAGA extremists start receiving indictments for their role in J6, the radical GOP accelerationists get purged and bi-partisan isn't a dirty word.
%%
MIGHT\ might not. Not sure I would blame a conservative speaker for a SPY bear killing OCT. But on a funny note he did work for Pres Bush+ he likes tax cuts also. Not that I blame President Bush for thatLOL
October 4, 2023 (Wednesday)
Yesterday, eight extremist members of the Republican congressional conference demonstrated that they could stop their party, and the government, from functioning. Indeed, that’s about all those members have ever managed to do. Political scientist Lindsey Cormack noted on social media that Representatives Andy Biggs (R-AZ) and Nancy Mace (R-SC) have managed only to name a single facility each; Representatives Ken Buck (R-CO), Tim Burchett (R-TN), Eli Crane (R-AZ), Matt Gaetz (R-FL), and Matt Rosendale (R-MT) have each sponsored no successful bills; and Bob Good (R-VA) has sent one thing to the president, who vetoed it.
They are not interested in governing; they are interested in stopping the government, apparently working with right-wing agitator Steve Bannon to sink the speakership of Kevin McCarthy (R-CA). Indeed, the only two significant legislative achievements the Republicans have made since they took control of the House in January 2023 were raising the debt ceiling and passing a continuing resolution to fund the government for 45 days. In both of those cases, the measures passed because Democrats provided more votes for them than the Republicans did.
The former House speaker was one of many Republicans who tried to turn this internal party debacle into the fault of the Democrats, although he apparently offered them no reason to come to his support and made it clear he would continue to boost the extremists.
Josh Marshall of Talking Points Memo commented: “The idea that D[emocrat]s should have bailed out McCarthy is a codicil of the larger logic of DC punditry in which R[epublican] bad behavior/destruction is assumed, a baseline like weather, and D[emocrat]s managing the consequences of that behavior is a given.” Journalist James Fallows agreed that this understanding “is so deeply engrained in mainstream coverage and ‘framing’ of DC that it doesn’t need to be said out loud.”
Aaron Fritschner, the deputy chief of staff for Representative Don Beyer (D-VA), was more specific, calling the idea the Democrats were refusing to support McCarthy out of spite “silly nonsense.” He noted that on Saturday, the House was preparing to shut down when McCarthy sprung on the Democrats a vote on the continuing resolution the Democrats had never seen. “My immediate read was he wanted and expected us to vote against [it] so we would be blamed for a shutdown,” Fritschner wrote. The Democrats instead lined up behind it.
Then, after it passed, McCarthy said to a reporter that the Democrats were to blame for the threatened shutdown in the first place. “People want us to give the guy credit for stopping a shutdown but it is still not clear to me right now sitting here writing this that he *intended* to do that,” Fritschner wrote.
Meanwhile, Fritschner continued, McCarthy was making it clear that he would “steer us directly back into the crazy cuts and abortion restrictions, the Freedom Caucus setting the agenda, breaking his deal with Biden, and driving us towards a shutdown in November,” refusing to make any reassurances that he would try to work with Democrats. As Jake Sherman of Punchbowl News reported: “McCarthy’s allies say they will NOT negotiate with Democrats. Even as some house Dems privately say they want to help the California Republican.”
“This came down to trust, and that's the word I saw and heard from House Democrats more than any other word. We did not trust Kevin McCarthy and he gave us no reason to. He could have done so (and I suspect saved his gavel) through fairly simple actions. He chose not to do that,” Fritschner wrote.
Adam Cancryn, Jennifer Haberkorn, Lara Seligman, and Sam Stein of Politico confirmed that both McCarthy’s allies and opponents found him untrustworthy, noting that when negotiating with President Joe Biden on “a particularly sensitive matter,” the speaker privately told allies that he found the president “sharp and substantive in their conversations” while in public he made fun of Biden’s age and mental abilities. That contradiction “left a deep impression on the White House,” the reporters said.
But who will now be able to get the votes necessary to become House speaker?
It seems reasonable to believe that the Democrats will continue to vote as a bloc for Minority Leader Hakeem Jeffries (D-NY), leaving the Republicans back where they were in January, when it took them 15 ballots to agree on McCarthy. Now, though, they are even angrier at each other than they were then. "Frankly, one has to wonder whether the House is governable at all," Representative Dusty Johnson (R-SD) told Andrew Solender of Axios.
Two Republicans have thrown their hats into the ring: Representatives Jim Jordan of Ohio and Steve Scalise of Louisiana. Both are significantly to the right of McCarthy, and both carry significant baggage. Jordan was involved in a major college molestation scandal and refused to answer a subpoena concerning his participation in the attempts to overturn the results of the 2020 presidential election. Scalise has described himself as like Ku Klux Klan leader David Duke “but without the baggage.”
Republicans from less extreme districts, including the 18 who represent districts Biden won in 2020, are not going to want to go before voters in 2024 with the kinds of voting records Jordan or Scalise would force on them.
The fight over the speakership is unlikely to be quick, and there is urgent business to be done. Congress must fund the government—the continuing resolution that made Gaetz call for McCarthy’s ouster runs out shortly before Thanksgiving. Even more immediate is funding for Ukraine to help its military defend the country against Russia’s invasion. That funding is very popular with members of both parties in both the House and Senate, but Jordan has said he is against moving forward with that funding, believing the extremists’ wish list is more pressing.
Today news broke that Ukrainian attacks have forced Russia to withdraw most of its Black Sea Fleet from occupied Crimea. This is a serious blow to Vladimir Putin’s ongoing invasion of Ukraine. It is an unfortunate time for the U.S. to back away from Ukraine funding, and legislators are urging the House to pass that funding quickly.
—-
From Heather Cox Richardson
Fritschner‘s thread on twitter went into more detail of the game mechanics
Yesterday, eight extremist members of the Republican congressional conference demonstrated that they could stop their party, and the government, from functioning. Indeed, that’s about all those members have ever managed to do. Political scientist Lindsey Cormack noted on social media that Representatives Andy Biggs (R-AZ) and Nancy Mace (R-SC) have managed only to name a single facility each; Representatives Ken Buck (R-CO), Tim Burchett (R-TN), Eli Crane (R-AZ), Matt Gaetz (R-FL), and Matt Rosendale (R-MT) have each sponsored no successful bills; and Bob Good (R-VA) has sent one thing to the president, who vetoed it.
They are not interested in governing; they are interested in stopping the government, apparently working with right-wing agitator Steve Bannon to sink the speakership of Kevin McCarthy (R-CA). Indeed, the only two significant legislative achievements the Republicans have made since they took control of the House in January 2023 were raising the debt ceiling and passing a continuing resolution to fund the government for 45 days. In both of those cases, the measures passed because Democrats provided more votes for them than the Republicans did.
The former House speaker was one of many Republicans who tried to turn this internal party debacle into the fault of the Democrats, although he apparently offered them no reason to come to his support and made it clear he would continue to boost the extremists.
Josh Marshall of Talking Points Memo commented: “The idea that D[emocrat]s should have bailed out McCarthy is a codicil of the larger logic of DC punditry in which R[epublican] bad behavior/destruction is assumed, a baseline like weather, and D[emocrat]s managing the consequences of that behavior is a given.” Journalist James Fallows agreed that this understanding “is so deeply engrained in mainstream coverage and ‘framing’ of DC that it doesn’t need to be said out loud.”
Aaron Fritschner, the deputy chief of staff for Representative Don Beyer (D-VA), was more specific, calling the idea the Democrats were refusing to support McCarthy out of spite “silly nonsense.” He noted that on Saturday, the House was preparing to shut down when McCarthy sprung on the Democrats a vote on the continuing resolution the Democrats had never seen. “My immediate read was he wanted and expected us to vote against [it] so we would be blamed for a shutdown,” Fritschner wrote. The Democrats instead lined up behind it.
Then, after it passed, McCarthy said to a reporter that the Democrats were to blame for the threatened shutdown in the first place. “People want us to give the guy credit for stopping a shutdown but it is still not clear to me right now sitting here writing this that he *intended* to do that,” Fritschner wrote.
Meanwhile, Fritschner continued, McCarthy was making it clear that he would “steer us directly back into the crazy cuts and abortion restrictions, the Freedom Caucus setting the agenda, breaking his deal with Biden, and driving us towards a shutdown in November,” refusing to make any reassurances that he would try to work with Democrats. As Jake Sherman of Punchbowl News reported: “McCarthy’s allies say they will NOT negotiate with Democrats. Even as some house Dems privately say they want to help the California Republican.”
“This came down to trust, and that's the word I saw and heard from House Democrats more than any other word. We did not trust Kevin McCarthy and he gave us no reason to. He could have done so (and I suspect saved his gavel) through fairly simple actions. He chose not to do that,” Fritschner wrote.
Adam Cancryn, Jennifer Haberkorn, Lara Seligman, and Sam Stein of Politico confirmed that both McCarthy’s allies and opponents found him untrustworthy, noting that when negotiating with President Joe Biden on “a particularly sensitive matter,” the speaker privately told allies that he found the president “sharp and substantive in their conversations” while in public he made fun of Biden’s age and mental abilities. That contradiction “left a deep impression on the White House,” the reporters said.
But who will now be able to get the votes necessary to become House speaker?
It seems reasonable to believe that the Democrats will continue to vote as a bloc for Minority Leader Hakeem Jeffries (D-NY), leaving the Republicans back where they were in January, when it took them 15 ballots to agree on McCarthy. Now, though, they are even angrier at each other than they were then. "Frankly, one has to wonder whether the House is governable at all," Representative Dusty Johnson (R-SD) told Andrew Solender of Axios.
Two Republicans have thrown their hats into the ring: Representatives Jim Jordan of Ohio and Steve Scalise of Louisiana. Both are significantly to the right of McCarthy, and both carry significant baggage. Jordan was involved in a major college molestation scandal and refused to answer a subpoena concerning his participation in the attempts to overturn the results of the 2020 presidential election. Scalise has described himself as like Ku Klux Klan leader David Duke “but without the baggage.”
Republicans from less extreme districts, including the 18 who represent districts Biden won in 2020, are not going to want to go before voters in 2024 with the kinds of voting records Jordan or Scalise would force on them.
The fight over the speakership is unlikely to be quick, and there is urgent business to be done. Congress must fund the government—the continuing resolution that made Gaetz call for McCarthy’s ouster runs out shortly before Thanksgiving. Even more immediate is funding for Ukraine to help its military defend the country against Russia’s invasion. That funding is very popular with members of both parties in both the House and Senate, but Jordan has said he is against moving forward with that funding, believing the extremists’ wish list is more pressing.
Today news broke that Ukrainian attacks have forced Russia to withdraw most of its Black Sea Fleet from occupied Crimea. This is a serious blow to Vladimir Putin’s ongoing invasion of Ukraine. It is an unfortunate time for the U.S. to back away from Ukraine funding, and legislators are urging the House to pass that funding quickly.
—-
From Heather Cox Richardson
Fritschner‘s thread on twitter went into more detail of the game mechanics
%%
SPY benchmark still closing down\weekly\
SPYG closing up/ weekly/
QQQ closing up weekly/
SPXU up weekly/spxs up weekly........................................................looks like the private sector is glad to see McCarthy go+ likes his replacement.
Or Stock/ETF traders like Stock Traders Almanac OCT poem on buy techLOL
SPY benchmark still closing down\weekly\
SPYG closing up/ weekly/
QQQ closing up weekly/
SPXU up weekly/spxs up weekly........................................................looks like the private sector is glad to see McCarthy go+ likes his replacement.
Or Stock/ETF traders like Stock Traders Almanac OCT poem on buy techLOL
Less pressure on the credit markets, perhaps.
Are you are thinking? : larger budgets --> greater deficits --> more borrowing from private sector --> more pressure on credit markets?
Yes. I suspect a more in-depth examination will be forthcoming…
Yes, it will be, and what you are thinking isn't quite right. Haven't the time at the moment but I'll come back and explain.
If you look at older literature you will find discussions of how government borrowing might compete with private sector borrowing, "crowding out" the private sector, as it were, and driving up interest rates. This thinking however was predicated on a misunderstanding of what we call "government borrowing", which, as we now know, is not really borrowing in the same sense at all as private sector borrowing. In fact, it is not borrowing at all! The United States has no such thing as a "national debt." The annual circus about raising the debt limit that the mostly Republican ignoramuses in Congress create would be hilarious were it not for the damage that could be done if ever these fools succeeded in causing the U.S. to default on its payments.
What the government actually does is put money into bank reserve accounts first and then convert that money into U.S. securities, via subsequent Treasury sales. In other words, when the government sells Treasuries to the private sector it is simply taking back out money it previously spent into the private sector. The net of this process is that reserves do not change so much as a penny, while private sector goods and services are, in effect, converted into private sector holdings of Treasuries. Private sector savings increase by the amount of the deficit. The Fed has long understood that, in this specific operation, they don't want to take out reserves before first increasing reserves by the amount that will be taken out. (To us in the private sector, it doesn't matter if it is the Fed or the Treasury putting the money in or taking it out. All we care about is what happens to reserves and savings, do they go up, down, or remain unchanged.)
Or said another way, in deficit spending, money flows into the economy before it is withdrawn by the Treasury's selling securities into the economy in matching amount. This causes a net change of zero in reserves. Therefore there can be no possibility of the government's deficit spending decreasing the amount of money available for bank lending in the private sector. Nor, and this should be obvious, is their any real, government borrowing going on. Furthermore, deficit spending has no direct affect on interest rates, which are determined by Fed vote.
Bank credit is limited by private sector demand and not the supply of bank reserves. Banks that want to make a loan to a credit worthy borrower can always do so regardless of their reserve position. No bank manager ever looks at their reserve balance before making a loan. They know if they have a credit worthy borrower, and their bank is solvent, they can always obtain the money to lend.
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Several thoughts on the above:
1. Increased government borrowing and spending has a stimulating effect on the economy, correct?
2. This apparent stimulating effect may increase inflation rates, correct?
3. Increased inflation will reduce inflation adjusted returns on fixed income, other things equal.
4. Reduced real returns can create upward pressure on interest rates through reduced investor demand.
5. Does reserve status of the US dollar give us more monetary flexibility in the way you describe versus a country that does not enjoy reserve status? Notably, many smaller countries have relatively high interest rates compared to developed countries. What is the situation there compared to ours?