Matthew Yglesias » The Lame Duck

Nov 8th, 2008 at 6:07 am

The Lame Duck

Expect all kinds of mischief from the Bush administration between now and Inauguration Day. Today, for example, if you thought one of the leading injustices in the United States is that poor people have access to unduly good health care, Bush is ready to solve that problem.

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Filed under: Health care, Lame Duck,

36 Responses to “The Lame Duck”

rapier Says:
November 8th, 2008 at 7:56 am
There is a principal involved in this. Medicaid is a gigantic budget buster. $1.5 trillion lent to banks over the course of a few weeks in exchange for damaged and/or unpriceable assets, not so much.

Trying to staunch the bleeding in the budget by this means is something they understand so they do it. That the budget is spiraling totally out of control in other areas is so mind boggling that it isn’t even being dealt with on a policy or even an intellectual basis. Instead magical thinking is being used wherein all that borrowing from the Treasury, through the Fed, is thought will be paid back in full and home prices and other assets will suddenly just stop falling and start rising again then all will be well.

The chances of this are zero. The Fed and the US Treasury and their foreign counterparts are going to have to eat another $10 trillion or so in losses just to keep things from collapsing further and even then the former biggest source of systematic credit, Wall Street, is gone forever or a long long time.

http://www.prudentbear.com/index.php/commentary/creditbubblebulletin?art_id=10149

DEBT TRAP (scroll down page till you see that header to get Nolands current discussion)
EKR Says:
November 8th, 2008 at 8:43 am
Can somebody explain to me what the point of this kind of last minute thing is?

Since it’s not going to Congress, why can’t Obama just reverse all these decisions as soon as he gets into office?
Glaivester Says:
November 8th, 2008 at 8:51 am
Since it’s not going to Congress, why can’t Obama just reverse all these decisions as soon as he gets into office?

Presumably he can. Perhaps the goal is to be able to point it out as a spending increase if he does so as to provide evidence that he is a socialist.

In my opinion the problem with the Bush administration (and with the GOP generally) is that while they have preached free market, in practice they have been “free market for you, welfare for the CEOs and lots of spending for war.” The reason that the GOP got the boot is not, as many claim, because the free market failed or because people have rejected the free market, but because the GOP is only interested in “the free market” for the common people, not for their cronies.
strasmangelo jones Says:
November 8th, 2008 at 9:18 am
Since it’s not going to Congress, why can’t Obama just reverse all these decisions as soon as he gets into office?

Obama can reverse these rules, but it’s a difficult, time-consuming process, involving lengthy periods of legal review and public comment; it could take months or even years to undo all the last-minute damage Bush is doing right now. See here and here for more on what that damage entails.
strasmangelo jones Says:
November 8th, 2008 at 9:26 am
However, it does seem that Congress can overturn presidential regulations, which would appear to be a far easier route to take than the Obama White House trying to run all of this back through the regulatory process.
Mary Says:
November 8th, 2008 at 10:29 am
I’d like to see some op-eds on this kind of thing so that the people of the United States can clearly see what kind of venal rat b@stards we are getting rid of.
JonF Says:
November 8th, 2008 at 10:43 am
Re: The Fed and the US Treasury and their foreign counterparts are going to have to eat another $10 trillion or so in losses just to keep things from collapsing further

Nonsense. Nearly all of those “unpriceable assets” are backed by real estate in some form or other. Real estate is headed down (as it should) but it will not go to $0. In the end those assets will be backed by collateral that is worth something. Not what it was worth in 2006 to be sure, but worth what it was in, say, 2000 plus some inflation.
FRB Says:
November 8th, 2008 at 11:07 am
Why don’t they just go away.
rapier Says:
November 8th, 2008 at 11:29 am
In fact there is no way of knowing what collateral is being taken by the Fed or the Fed acting as agent for the Treasury in all their various special purpose lending facilities, or whatever you call them.

Bloomberg filed suit the other day to try and find out but of course they will lose that, since nobody has the guts to challenge the high priests of finance.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKr.oY2YKc2g

At any rate is is known that this is wrong. “Nearly all of those “unpriceable assets” are backed by real estate in some form or other.”
The biggest program of all, the CPR, to bail out the commercial paper market, and money markets have little real estate related assets to offer for collateral. Beyond that there are all manner of dodgy assets that the Fed is taking as collateral from banks and other entities.

Besides which I said the world, not just the US and there too, like the US, real estate is hardly the only asset class that is deflating and taking the credit based upon it down with it.
Charles Says:
November 8th, 2008 at 11:44 am
One thing I’m expecting from Bush as he’s walking out the door is a quiet pardon of everyone involved in anything approaching war crimes.
Becca Says:
November 8th, 2008 at 11:49 am
Boy, if Dickens was alive today…
Stephen Says:
November 8th, 2008 at 2:50 pm
Maybe the administration is misrepresenting the effect of this, but based on the article text, it seems that services are not being cut, but instead shifted out of hospitals. The specific services mentioned as examples are dental and vision. This seems entirely reasonable. When is the last time you went to a hospital for your dental or vision check-ups? Of course this results in less money going to the states because hospital services are more expensive than non-hospital services, but surely it’s not so imperative that we spend money on Medicaid that we need to pay higher prices for no reason. Am I missing something?
kid bitzer Says:
November 8th, 2008 at 5:12 pm
pardons.

why isn’t anyone talking about the pardons?

bush is going to try pardon all of his henchmen at the last minute.

the more it gets talked about now, the more politically costly we can make it for the republican party.

“president bush, do you pledge not to pardon members of your administration who may have committed criminal acts? if not, why not?”

“senator mccain, do you think that president bush should pardon members of his administration who may have committed criminal acts? if so, why?”

repeat for every republican with a face. yeah, he’ll do it anyway. but make it cost them.

talk about pardons now!
Glen Tomkins Says:
November 8th, 2008 at 8:16 pm
Completely predictable

This was an entirely predictable problem. We’ll be quite lucky if the damage Dubya does between now and 1/20/09 extends no further than similar nibbling at the edges, and he doesn’t try any actual major Constitutional confrontations.

All of this could have been prevented by the simple expedient of making this year’s continuing resolutions all renewable on a day-by-day basis if necessary, or all contingent on the funded agencies not making any new policy or regulations of any sort.

We don’t have the 2/3 of the Senate we need to get rid of the central problem, but a bare majority could use the power of the purse to get rid of, or threaten to get rid of, all of his minions, all of his means of executing any more vicious stupidity.
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Matt Yglesias

The Lame Duck

36 Responses to “The Lame Duck”

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