STOCK MARKET WATCH -- Thursday, 21 February 2013

[Demeter]

14. A Game of Chicken By CHARLES M. BLOW

http://www.nytimes.com/2013/02/21/opinion/blow-a-game-of-chicken.html

Well, here we go again. Another season, another manufactured, self-inflicted, completely preventable crisis of government. This time it’s the sequester. We may as well put these things in the Farmers’ Almanac...Now we’re engaged in a finger-wagging blame game of who proposed it, who supported it and who is opposed to preventing it.

Let’s lay out some of the facts of this disaster.

The sequester’s origin is quite muddy. President Obama, responding to Mitt Romney in an October presidential debate, said: “First of all, the sequester is not something that I’ve proposed. It is something that Congress has proposed. It will not happen.” John Boehner, on the other hand, now says that the sequester is Obama’s baby. In a speech on the House floor this month, Boehner said: “The president first proposed this ‘sequester’ in 2011 and insisted it be part of the debt-limit agreement.” In an opinion piece published Wednesday in The Wall Street Journal, Boehner wrote, “Having first proposed and demanded the sequester, it would make sense that the president lead the effort to replace it.”

PolitiFact rated Obama’s claim that the sequester was proposed by Congress as “mostly false” saying:

“It was Obama’s negotiating team that came up with the idea for defense cuts in 2011, though they were intended to prod Congress to come up with a better deal for reining in the deficit, not as an effort to make those cuts reality. Meanwhile, members of both parties in Congress voted for the legislation that set up the possibility of sequestration. Obama’s position is that Congress should now act to avoid those across-the-board cuts. Obama can’t rightly say the sequester isn’t his, but he did need cooperation from Congress to get to this point.”

PolitiFact bases its assessment largely on assertions in the new book “The Price of Politics,” by the renowned Washington Post reporter Bob Woodward. The Web site does, however, point out that there are dissenting views, including that of Christopher Preble at the libertarian Cato Institute. PolitiFact quotes Preble as saying, “I do not believe it accurate to refer to the cuts that will occur in both defense and nondefense discretionary spending under sequestration as ‘Obama’s cuts.’ ” And John Avlon, a senior columnist for The Daily Beast, wrote Wednesday that he “happened to come across an old e-mail that throws cold water on House Republicans’ attempts to call this ‘Obama’s Sequester.’ ”

According to Avlon:

“It’s a PowerPoint presentation that Boehner’s office developed with the Republican Policy Committee and sent out to the Capitol Hill GOP on July 31, 2011. Intended to explain the outline of the proposed debt deal, the presentation is titled, ‘Two Step Approach to Hold President Obama Accountable.’ It’s essentially an internal sales document from the old dealmaker Boehner to his unruly and often unreasonable Tea Party cohort. But it’s clear as day in the presentation that ‘sequestration’ was considered a cudgel to guarantee a reduction in federal spending — the conservatives’ necessary condition for not having America default on its obligations. The presentation lays out the deal in clear terms, describing the spending backstop as “automatic across-the-board cuts (‘sequestration’). Same mechanism used in 1997 Balanced Budget Agreement.”

So, there’s that.

But I’m not sure where all this you- are-the-father origination blame game gets us. The bill got bipartisan support in the House and at the time Boehner bragged: “When you look at this final agreement that we came to with the White House, I got 98 percent of what I wanted. I’m pretty happy.” And President Obama signed it...So once again the American people are caught in the middle of a game of chicken between Democrats, who rightly warn that the sky could fall, and Republicans, who want to burn the coop....