Because reality right now is telling us that austerity is not only painful but wholly counterproductive. Here's an excellent report from the Wall Street Journal on the wide social unrest that austerity has caused in Greece:

Greece shook global markets, intensifying fears of a default, as tens of thousands of demonstrators protested a new round of budget-cutting plans and its prime minister offered to step down to try to preserve them.

Protests across the capital sometimes turned violent as Prime Minister George Papandreou sought an agreement with opposition parties on austerity measures demanded as the price of a new bailout by euro-zone nations and the International Monetary Fund.

The report also notes that austerity has actually exacerbated the sovereign debt crisis and hasn't made bond holders any more willing to buy Greek bonds at lower interest rates:

Yields on Greek government bonds leapt to new highs, with two-year paper yielding 29%. Bond yields on other troubled euro-zone economies like Portugal and Ireland also moved higher, and stock markets in the U.S. and Europe sank as fears of contagion picked up. The euro plunged 1.9% against the dollar.

Needless to say, it's not only the wacky anarchist college kids who are pissed off about all this. Mama and Papa Greece are none too pleased either:

John Petru, 41 years old, said he had come to block parliamentarians from arriving to debate the budget cuts. "We do not trust them," he said of the politicians. The recession has eaten badly into his cleaning-service business. "Business is down, and prices are up, and we are not sure about anything," he said.

Greeks have already suffered multiple rounds of budget cuts since last year, but they have failed to build confidence in the economy. The budget deficit has turned out to be wider than projected then, with the government failing to cut spending or raise revenues as much as promised. But the biggest gap in its finances has opened up because private investors have refused to buy new Greek government bonds at interest rates the government can afford.

Many protesters said they had gone along with previous budget cuts and wage reductions on the belief that those sacrifices would be enough to right Greece's fortunes. "They have asked us to reduce our wages, to live another standard of life," said Angeliki Kachrimani, a 42-year-old worker for Greece's postal service. She accepted a 15% wage cut; her husband, a history teacher, is unemployed.

And look, this is all pretty simple to understand: Greece is in this mess right now both because its government lied for years about its budget deficits (with an assist from everyone's favorite investment bank Goldman Sachs) and because its monetary policy options are limited by the European Central Bank. In other words, investors know Greece can't print its own money and thus will never be able to pay them back. The problem is exacerbated by the austerity measures that result in cuts to government jobs, cuts to wages and a drop in overall demand. These things aren't exactly making investors feel good about Greece's future economic prospects either.

"Why should I give a damn about this?" you ask. Well, it's pretty obvious that America's own austerity backers, led by Paul Ryan, have similar plans for us as well. And it would behoove us to point to the examples of Greece and Ireland and the U.K. and shout at the top of our lungs, "AUSTERITY DOESN'T WORK, YOU TOOLS!!!!!" Because frankly, I'm not looking forward to widespread social unrest. God forbid the streets of America come to resemble third-world hellhole streets like those of Vancouver.

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They gave us a republic: OK Mr. Holder...what's the excuse going to be this time?

Climate Progress: Climate Change is the next security threat

Earlier this week the California Secretary of State gave the green light to Republican Michael Erickson to begin gathering signatures for his version of the Arizona immigration law that targets ethnic groups for heightened scrutiny by law enforcement officers. Erickson is the former head of the California Republican Party, current chairman of Republicans for the National Interest and the Support Federal Immigration Law Committee (full bio here). He also appears to be a xenophobic Tea Party bigot cast in the mold of Jan Brewer, Russell Pearce and Kris Kobach.

From the press release:

“Californians are under attack from a growing wave of drug related, gang violence. Now that Arizona courageously has resolved to crack down on the drug cartels in their state, we may presume that the murderous warlords will seek a safe haven in our state,” continued Erickson. “Frankly, under the circumstances, we no longer have the time for the phony political posturing and fence sitting that substitutes for real leadership on this issue.”

Noting that illegal immigration costs the state of California “tens of billions annually in education, health care, and incarceration,” Erickson scolded politicians as not being serious about solving our fiscal crisis when they “refuse to provide anything other than safe, poll driven clichés on this issue.”

It's so easy to make claims like this without substantiation. In fact, California's crime rate has been steadily decreasing, with 2009 seeing a 6.6% drop in violent crime over 2008. That drop isn't an anomaly either. Crime rates in California have been decreasing since 1992 at a steady rate, even as California's population has increased.

In order to get this initiative on the ballot, Erickson will need to gather about 434,000 signatures between now and 2012. He will surely employ the usual professional petition-gatherers, mobilize Tea Party supporters, and rely on conservative strongholds like Orange and Riverside counties to gain traction. As usual, the initiative and surrounding PR campaign have been crafted with some lip service to the exploitation of immigrant workers in order to fool people into signing the petition. Here's an overview:

Initiative supporters must gather at least 433,971 signatures of registered voters by April 21, 2011, to qualify for an election. Erickson said he'd aim to put the measure before voters during the 2012 election cycle.

The effort will rely largely on volunteers from California's Tea Party network, Erickson said.

The California proposal would make it a state crime for undocumented persons to seek work while hiding their immigration status, and a state crime for employers to "intentionally or negligently" hire an illegal immigrant.

The measure would also require all highway patrol, police, sheriff's deputies and other officers to investigate a person's immigration status if they are "reasonably suspicious" that a person who they stopped is in the country illegally.

The difference with Arizona's law, Erickson said, is that officers would have to contact federal immigration authorities and conduct such a check within a "timely manner" and could not hold a person for a long period of time.

Just like the Arizona law, it targets people of color and Latinos in particular, because after all, who would "reasonably suspect" a white person with a Canadian or Australian accent from being here illegally. Right?

There are two ways this can go, assuming he's able to gather the required signatures. If it lands on the 2012 June primary ballot, Erickson and his group are counting on a similar turnout to the 2010 midterms, giving it a greater chance of passage. If it lands on the 2012 general election ballot, chances will diminish for passage because of the higher turnout and more engaged electorate. I think he underestimates the clout of the Latino vote in California.

Let's hope it never makes it to the ballot, but if it does, I predict a solid rejection at the polls..

Immelt said angry political rhetoric is not helpful and headlines are too focused on finding negative indicators. He said business at GE, one of the world's largest companies, is improving.

Immelt was one of Obama's big business cheerleaders in 2008, but presumably fell into the disaffected CEO category earlier this year, as evidenced by his remarks in early July (which he walked back right away):

Mr Immelt also had harsh words for Barack Obama, US president, lamenting what he called a “terrible” national mood and expressing concern that over-regulation in response to the global financial crisis would damp a “tepid” US economic recovery. Business did not like the US president, and the president did not like business, he said, making a point of praising Angela Merkel, Germany’s chancellor, for her defence of German industry.

Despite the denials and claims of being quoted out of context, Immelt's remarks were remarkably similar to off-the-record complaints by top CEOs about how "let down" they felt by Obama. And now, just two months later, we have Steve Ballmer and Warren Buffett waxing optimist, practically singing "Happy Days Are Here Again". Why?

Immelt's remarks in a letter to shareholders lock the puzzle pieces in place when placed against his remarks at the Baucus conference. Here is a little more of what he said:

Immelt said the country is going to need to adjust, though. The economy since the 1970s has been driven by consumer credit and a misguided notion in building a "lazy" service economy, he said, and manufacturing, with an aim to reduce the trade deficit, is the key.

"It was just wrong. It was stupid. It was insane," Immelt said of the push for a service-based economy. "The future of the economy has to be as an exporter."

Of course, in order to be an exporter, we have to be willing to trade on a global market. This is the point Immelt made in his shareholder letter:

General Electric's CEO, Jeffrey Immelt, offered a clear-eyed appraisal of the stakes in a letter to shareholders this year: "When citizens distrust big business, governments will follow suit," he said. "We can find ourselves in a sort of 'dark cycle,' where the people who can make our economy better are considered its worst enemies. The rallying cry becomes, 'Why can't you clowns just create some jobs?'…I fear that if we don't improve the mood in our country, populism will turn to protectionism, to the great detriment of us all.''

He's right. This isn't an apologetic to big business, but facts are facts. We have to make things to pull the economy out of the ditch. When we make things, the service pieces of the economy will revive too, because people will spend for services they've cut back or foregone.

When looked at as a whole, these remarks by CEOs are purely self-serving and not particularly political other than this: The campaign of fear and loathing waged on this country by teabaggers and stoked up by corporate media looking for the clicks and eyeballs not only affects our mood, it affects our economy in deep and scarring ways.

Strangely enough, the way out of this recession requires some optimism, which the Baucus group was certainly willing to provide. Unfortunately, their optimism may not be infectious if they continue to sit on big piles of cash while the unemployment rate stays high.

If I were to have a conversation with Jeff Immelt, I'd tell him that optimism is best served with a job offer or two. If he needs any evidence of that, he should consider what the Gallup polls have to say about big business these days:

The Gallup Poll last year found that 82% of Americans have a great deal or quite a lot of confidence in the military. For small business, it was 67%. For churches, 59%. For newspapers, 25%. For Congress, 17%. And for big business, 16%, lower than at any time since Gallup began posing the question in 1973.

When Americans' confidence level in big biz sinks below Congressional disapproval ratings, it's definitely in their best interests to start looking for some silver linings.

As you might have noticed, Krugman is exceedingly anxious this days, and his column reflects it. After all, the Dems are about to get hit with a right-wing tsunami if the Republicans take control of the House, and yet, Obama's still trying to hit the ball down the Moderate Middle. It's like watching a train wreck in slow motion.

I just can't imagine Hillary Clinton sitting back and letting the Republicans get away with this crap all over again. Can you?

So what will happen if, as expected, Republicans win control of the House? We already know part of the answer: Politico reports that they’re gearing up for a repeat performance of the 1990s, with a “wave of committee investigations” — several of them over supposed scandals that we already know are completely phony. We can expect the G.O.P. to play chicken over the federal budget, too; I’d put even odds on a 1995-type government shutdown sometime over the next couple of years.

It will be an ugly scene, and it will be dangerous, too. The 1990s were a time of peace and prosperity; this is a time of neither. In particular, we’re still suffering the after-effects of the worst economic crisis since the 1930s, and we can’t afford to have a federal government paralyzed by an opposition with no interest in helping the president govern. But that’s what we’re likely to get.

If I were President Obama, I’d be doing all I could to head off this prospect, offering some major new initiatives on the economic front in particular, if only to shake up the political dynamic. But my guess is that the president will continue to play it safe, all the way into catastrophe.

President Obama sought to reassure Americans last night that his administration has made progress in reviving the economy and said his $3.6 trillion budget is "inseparable from this recovery." After sprinting through his first months in office, Obama is now facing heightened criticism from Republicans, who have called his blueprint irresponsible, and from skeptical Democrats who have already set about trimming back his top budget priorities. Obama came into office amid lofty expectations and the worst economic crisis in generations, and he succeeded in pushing through a $787 billion stimulus and launching expensive plans to revive the banking system. Last night, against a backdrop of a broad national anxiety that the economy may still be failing, he attempted to recalibrate the high hopes to more closely fit the challenges he said lie ahead. Although he spoke sharply once in response to Republican criticism, Obama struck a tone of common purpose throughout his second prime-time news conference, urging the country to be patient as he works on issues as divergent as the Israeli-Palestinian conflict and the malign impact of lobbying in Washington. "We haven't immediately eliminated the influence of lobbyists in Washington," he said from the East Room of the White House. "We have not immediately eliminated wasteful pork projects. And we're not immediately going to get Middle East peace. We've been in office now a little over 60 days. "What I am confident about is that we're moving in the right direction." [...] Responding with his most partisan comment of the evening, Obama said his Republican critics should look to their own history with the federal budget, accusing them of having "a short memory" when it comes to deficits. "As I recall, I'm inheriting a $1.3 trillion annual deficit from them," he said.

Congressional Democrats decided they didn't have the months it would take to renegotiate the aid formulas, which resulted in some real disparities between districts:

RANDOLPH, Utah — Dale Lamborn, the superintendent of a somewhat threadbare rural school district, feels the pain of Utah’s economic crisis every day as he tinkers with his shrinking budget, struggling to avoid laying off teachers or cutting classes like welding or calculus.

Just across the border in Wyoming, a state awash in oil and gas money, James Bailey runs a wealthier district. It has a new elementary school and gives every child an Apple laptop.

But under the Obama administration’s education stimulus package, Mr. Lamborn, who needs every penny he can get, will receive hundreds of dollars less per student than will Dr. Bailey, who says he does not need the extra money.

“For us, this is just a windfall,” Dr. Bailey said.

In pouring rivers of cash into states and school districts, Washington is using a tangle of well-worn federal formulas, some of which benefit states that spend more per pupil, while others help states with large concentrations of poor students or simply channel money based on population. Combined, the formulas seem to take little account of who needs the money most.

As a result, some districts that are well off will find themselves swimming in cash, while some that are struggling may get too little to avoid cutbacks.

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The tab coming out of the Senate stands at $838 billion:

President Barack Obama's economic recovery plan has passed the Senate and is on its way to difficult House-Senate negotiations.

Just three Republicans helped pass the plan on a 61-37 vote and they're already signaling they'll play hardball to preserve more than $108 billion in spending cuts made last week in Senate dealmaking. Obama wants to restore cuts in funds for school construction jobs and help for cash-starved states.

Those cuts are among the major differences between the $819 billion House version of Obama's plan and a Senate bill costing $838 billion. Obama has warned of a deepening economic crisis if Congress fails to act. He wants a bill completed by the weekend.

Sweet Jesus, this guy makes me hate him more and more...

Think Progress:

On Fox News today, Sen. Joe Lieberman (I-CT) discussed the downturn in Sen. John McCain's presidential prospects, saying McCain "is behind now because of the economy." Lieberman then said that he hopes the House passes bailout legislation tomorrow because "it will be good for our country."

"But frankly, it will be good for John McCain too," added Lieberman, explaining that "it will get people back to comparing the two candidates free of a sense of crisis that may make them want to turn against Republicans."

I don't think he talked to the McCain campaign before doing the interview, because at the same time, here's John McCain on Morning Joe:

Singer pointed out a couple odd McCain moments from the last couple days, and I'd like to add one more from today's Morning Joe (via Joe at AMERICAblog):

"This bill is putting us on the brink of economic disaster."

McCain voted for it...less than 24 hours ago.

Bloomberg:

The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.

The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.

The Fed's expansion of liquidity, the biggest since credit markets seized up last year, came hours before the U.S. House of Representatives rejected a $700 billion bailout for the financial industry. The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks over the past two days alone. Read on...

I'm not an expert on the economy or Wall St., but this sure looks like an end-around by the Bush administration to give away hundreds of billions of dollars without the approval of Congress.