Der Krugman says the Grand Bargain game is on:

So, is my timing good or not? Right after I warn about the risk that Democrats, including the president, might betray the mandate they seem likely to get for preserving the safety net, we learn that Senate leaders are at work on a plan based around, well, you guessed it:

If those efforts failed, another plan would take effect, probably a close derivative of the proposal by President Obama’s fiscal commission led by Erskine B. Bowles, the Clinton White House chief of staff, and former Senator Alan K. Simpson of Wyoming, a Republican. Those recommendations included changes to Social Security, broad cuts in federal programs and actions that would lower tax rates over all but eliminate or pare enough deductions and credits to yield as much as $2 trillion in additional revenue.

Just to say, this would be politically stupid as well as a betrayal of the electorate. If you don’t think Republicans would turn around and accuse Democrats of cutting Social Security — probably even before the ink was dry — you’ve been living under a rock.

As David Atkins points out:

There is no reason for Democrats to cooperate with this. Since Republicans or some version of them will inevitably win the White House about half the time in our binary system, let the Republicans take responsibility for cutting the popular stuff. They're the ones who "starved the beast" in the first place. It's not our job to clean up their mess. Let them embrace Simpson-Bowles and the rest of the lemmings, and we can do things the Keynesian way.

And Digby, who's skeptical the austerians will be able to pull it off anyway, says:

Considering the circumstances and political environment, the best result of all this deficit fulminating we can hope for would be to postpone the tax hikes and postpone the spending cuts. And that's because the "fiscal house" is still on fire and if anyone has any sense at all they'll stop this talking about how much it's going to take to rebuild it and put the blaze out first. Or at the very least stop putting gasoline on the fire. That's pretty weak considering what really needs to be done but at least there's some basic Keynesian logic to it.

I don't know if that's what will happen. It all depends on whether the Democrats agree to take any kind of chump change the Republicans throw out there as a victory and whether the Republicans wise up and see how that would advance their own agenda. If they stay stuck, then postponing both tax hikes and spending cuts would be far better for the economy than anything else that's on the menu. It's not much, but I'd take it.

Here's hoping Digby is right and they can't pull it off. We can only pray.

Remember, this is the same guy who was widely rumored to be next in line after Tim Geithner leaves Treasury. Boy, they really do live in a bubble, don't they? I think we all know how badly they want to get their manicured little fingers on our Social Security:

Jamie Dimon did his thing, and people liked it. The chairman and CEO of what many consider to be the best bank in the U.S. came out guns blazing and touched on every issue related to regulation and banking.

Dimon was speaking his mind Thursday at a a conference put on by the Simon School at the University of Rochester, where he received the “Executive Of The Year” award. The head of JPMorgan Chase expressed support for the Simpson-Bowles bipartisan budget plan, echoing earlier remarks at the event on the latter point made by General Electric chief Jeff Immelt. Dimon also called the persecution of oil price speculators “ridiculous,” asking the Obama Administration, Republicans, and everybody to unite and “get [things] done.”

After acknowledging the severity of the European sovereign debt crisis, and the only temporary effect of the ECB’s LTRO liquidity programs, Dimon said “the U.S. is the opposite of Europe, we know the way, it’s called Bowles-Simpson.”

“Our problem is that we don’t have the will,” explained Dimon. The problem in the U.S. is political, he explained, as Democrats and Republicans have pushed each other so far apart that they’ve created unnecessary problems, such as the debt ceiling crisis, that aren’t structural but political in nature.

“Why the hell are we so depressed,” he said, adding “we have the best military in the planet, the best universities and the best businesses incredible innovation, from Steve Jobs to the factory floor.”

Sure, as long as you're a gazillionaire who can afford all those things! God, what a piece of work.

There was a moment to talk about Occupy Wall Street as well, only a few days after massive protests in the contexts of May Day. OWS has targeted Dimon in the past, but the banker still said he agreed with some of their points. “The average American [can] look at the institutions of America and [say] they’ve let me down: these are Washington and Wall Street,” said Dimon. “A lot of people made a lot of money [going into the crisis], [then] their company blew up, and they [still] walked out with a lot of money,” he explained, acknowledging he didn’t like that either.

The banker, though, said the Occupy movement has put every banker, every CEO and one-percenter in the same bag. “That’s ridiculous, it’s another form of discrimination,” he said. At one point, Dimon did what many in the crowd equated to criticizing President Obama, saying “when things go wrong, finance gets blamed, just like this ridiculous stuff of blaming speculators for oil prices.” Dimon noted that markets are a very powerful force, allocating capital whether regulators want it or not. The secret, he explained, is getting “good” regulation.

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I'm not sure if Nancy Pelosi is playing smart politics or she's lost her mind. I'd like to think it's the former.

It's true, the Simpson-Bowles commission report has turned into something larger than a failed effort at deficit reduction. It has attracted a cult following among DC insiders, like Rep. Jim Cooper, who has lionized it as That Thing That Should Have Passed But Didn't, as if they actually agreed on the recommendations.

So Nancy Pelosi does an interview with Charlie Rose, who has apparently joined The Cult of B-S (Bowles-Simpson), and Rose pushes her all over the place on the Grand Bargain during the debt ceiling debacle, before pushing her hard on The Great B-S report, and after endorsing it as having "good bones," she says this:

The Republicans and Democrats -- it was bipartisan -- brought a version of Simpson-Bowles to the floor last week, but it was more of a caricature of Simpson-Bowles and that's why it didn't pass. If it were actually Simpson-Bowles I would have voted for it.

Really? She would have voted for something that touched Social Security even though Social Security isn't even a budget or deficit problem? Why? She would have raised the Medicare age because why?

Here's something I learned from David Corn's new book, Showdown: Senate Democrats were told at an early 2011 strategy session that voters were focused on deficit reduction and they'd better be too.

But the lawmakers had left Washington not to relax but to cogitate on the issues they would confront in the coming year. One session that would stick the most with many of them was not led by a policy expert but by Democratic pollster Geoff Garin, who had one major point to impart: you have to be serious about deficit reduction or the voters will not listen to you.

Garin based this warning on polls and focus groups, that showed voters supporting deficit reduction as the major pathway to job creation. We can thank right-wing message muddling for that misunderstanding, but nevertheless, there it is. As Corn put it:

They had imbibed the GOP message: the problem with the economy was governmental red ink.

And that message led to the bottom line:

But Garin measured voter perceptions, not whether voters were correct. And he told the senators that voters would not listen to what the Democrats -- including the president -- had to say about jobs and investments if they did not sense that the Democrats were willing to wrestle the debt monster to the ground.

Clearly the Senators heard this, as did the White House, which is why there was the laser-like focus on the deficit. Not that it made a difference, since in the long run, it just doesn't matter what Democrats do. If they're for it, Republicans will oppose. In everyday life, we call that "oppositional defiant disorder." In politics, it's just standard operating procedure.

So when you hear Nancy Pelosi talking about the Grand Bargain in these terms, think in that context, and then think about her conclusion:

"It was a way to say we are serious about this, we can govern. And they walked away from that."

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In the aftermath of Friday's budget agreement, it's no longer a question of whether the U.S. is going to slash spending, but where, when and by how much. On the heels of the $38.5 billion in cuts to discretionary, non-defense spending Obama adviser David Plouffe deemed "draconian", President Obama on Wednesday will lay out his vision for long-term deficit reduction, one likely to include the deeply flawed recommendations of the Simpson-Bowles Commission. And with Republicans promising more budgetary blackmail over the debt ceiling and 2012 spending, austerity is the word of the day.

Judging by the grim experience in the UK, that is a very, very bad thing.

The British headlines tell the tale. This week, the BBC reported "UK economy faces 'worrying' times." Meanwhile, the Guardian warned David Cameron's Tory government:

Some of the UK's most prominent business leaders, including individuals who gave their personal stamp of approval to the chancellor's aggressive spending cuts, have said they have growing concerns about the state of the economy, warning of weak growth and rising inflation ahead.

They have good reason to be worried. While U.S. gross domestic product jumped by 3.2% in the fourth quarter of 2010, the British economy contracted by half a point. If that dismal performance could be attributed in part to even more dismal weather, the future looks bleak as well.

Last week, the OECD predicted continued sluggish growth for the UK, cutting back its forecasts for the quarter and the year:

In a survey of the G7 economies, the OECD estimated that UK gross domestic product would expand at an annualised rate of 1% in the second quarter.

This compared with an OECD forecast in November of 1.3%.

The OECD said the US economy was expected to expand by 3.4%, followed by France at 2.8% and Germany at 2.3%.

While the UK GDP numbers for the first quarter of 2011 aren't due until April 27, the picture painted by British Chamber of Commerce survey wasn't a pretty one:

"The upturn in Q1 is likely to have been only slightly larger than the decline of 0.5% seen in Q4 2010", when the severe weather caused disruptions, it said.

That would mean output levels were only "marginally higher" than they were before the weather took its toll, it added.

If their economic prospects are diverging, the policy prescriptions of the Democratic Obama administration and the conservative Cameron government have been even more so. Following the $787 billion stimulus program in early 2009, the Carnegie Endowment noted that "U.S. leaders agreed last December to extend tax cuts and enact a payroll-tax holiday that the Congressional Budget Office (CBO) projects will cost 6 percent of 2010 GDP over the next five years." In sharp contrast:

In one of the great surprises of 2010, a new British government announced plans to cut public investment and reduce social spending by £80.5 billion ($131 billion) and enact tax hikes of an additional £29.8 billion ($49 billion) through 2015. The planned reduction in Britain's cyclically adjusted fiscal deficit--nearly 8 percent of GDP from 2010 through 2015--is in line with that of Greece's draconian austerity program and larger than the planned reductions in Ireland (6 percent of GDP), Portugal (6 percent), Spain (3.5 percent), and Italy (1.5 percent) over the same period.

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