New York Times
This story in yesterday's New York Times by Binyamin Appelbaum about how Federal Reserve Board Chairman Ben Bernanke now plans to hold regular press conferences about Fed policies and projections is actually far more interesting and important than is reported.
My sources in the Fed told me almost a year ago that, in the wake of the criticism the Fed was receiving about its handling of the financial crisis, Bernanke had made a decision to speak publicly more often and to a much wider audience than either the Fed or he had ever done before. I was told that Bernanke had decided that he was going to have to talk to the public one way or another and, rather than wait for a problem to occur and then have to defend his actions to an audience that hadn't heard much from him directly, he preferred for the Fed to establish a rapport and talk proactively.
The New York Times ran an editorial yesterday -- "Holding Firm on the Budget" -- that essentially tells the White House and congressional Democrats not to be afraid of a shutdown. It's a remarkable piece in the sense that it says a compromise that goes too far toward hurting the economy isn't a good idea. It also tells congressional Republicans that they will be blamed if a shutdown occurs.
What the editorial shows is that, less than a week after the two-week extension of the continuing resolution was enacted, the positions towards a shutdown may very well be hardening.
Here's the whole editorial.
Holding Firm on the Budget
The latest New York Times/CBS News poll once again shows that feelings about reducing the federal deficit are anything but rational. As Bruce and I have discussed here at CG&G many times over the years, Americans resoundingly don't want taxes raised but, with rare exceptions that typically won't have much of a positive impact on the problem, also don't want spending cut. Over at Economix, David Leonhardt has a good story explaining the budget ins and outs of the poll.
The poll once again confirms that, although "federal spending" is very unpopular in theory, the services the federal government provides with that spending are at least or more popular in reality. That's why the notion that eliminating "waste, fraud, and abuse" will reduce the deficit works so well: It offers the hope that spending can be reduced without the government doing anything less than it is currently doing.
Over at The Caucus blog at the New York Times, Carl Hulse yesterday posted about a letter from Reps. Barney Frank (D-MA) and Norm Dicks (D-WA) to Defense Secretary Robert Gates asking him "to explain the military impact of putting the government into default," that is, what would happen if Republicans in Congress refuse to increase the federal debt ceiling when it's reached later this year. Here's the money quote from Hulse's post:
More specifically, they asked the secretary what the effect would be on combat operations and military personnel in Afghanistan and Iraq “if Congress were to fail to raise the debt limit and a government shutdown occurred.”
“Would the troops in the field be imperiled if we reached a point where for however long the Pentagon was unable to spend money?” they wrote.
Even if you put the close-to-impossible politics aside, any budget wonk would have told the GOP that for purely technical reasons it was going to be almost impossible to deliver on the promise it made in its Pledge to America to cut $100 billion from the federal budget this year.
That's why it was anything but a surprise when, as Jackie Calmes noted in yesterday's New York Times, on the first day they formally took control of the House of Representatives Republicans did what every fiscal technician knew was inevitable: They announced that they were not going to cut domestic discretionary spending to 2008 levels as they repeatedly said they would do.
