Republican Sabotage Is Taking Its Toll

According to Bloomberg, investors pulled more money out of mutual funds invested in U.S. government securities last week than in any previous week this year.

Investors last week pulled more money from money-market mutual funds than any week this year as U.S. lawmakers failed to resolve the impasse over raising the debt ceiling.

Withdrawals reached $37.5 billion, with about 70 percent of the redemptions coming from institutional funds that invest in U.S. government securities, according to data from the Investment Company Institute, a Washington-based trade group. Investors poured $3 billion into German stock funds in the week ended July 27, the most since mid-2008, and $1 billion into gold and precious-metals funds, according to EPFR Global, a Cambridge, Massachusetts-based research firm.

“This is a unique situation and people are afraid of the unknown,” said Peter Crane, president of Crane Data LLC, a Westborough, Massachusetts-based firm that tracks the $2.6 trillion money-market fund industry.

People are afraid of the unknown. They’re afraid of uncertainty. And just who exactly is causing that uncertainty right now?

Meanwhile, GDP growth for the second quarter of this year was 0.4 percent lower than expected.

Gross domestic product climbed at a 1.3 percent annual rate following a 0.4 percent gain in the prior quarter that was less than earlier estimated, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 1.8 percent increase. Household purchases, about 70 percent of the economy, rose 0.1 percent.

If you want to know why we can’t escape the iron-grip of the still-lingering recession, pay close attention to that last statistic.

Household purchases, which account for 70 percent of our economy, only rose 0.1 percent. It rose only 0.1 percent because there is no demand. And the only force with the power to create demand right now is the federal government. This is why the Republicans will stomp their feet and demand austerity until their last dying breath.

We can’t depend on the business community to hire more people, or pay higher salaries, to create demand. They have very little reason to do so long as they continue to profit while downsizing their work forces. Their sole function is to profit. To make money. Their function is not to create demand. Their function is to service demand. That is why government should NOT be run “like a business.”

With economic growth chugging along at a level of only 1.3 percent, it wouldn’t take very much to send us back into another recession, and you know the Republicans would just love that.

Their campaign of economic sabotage and obstruction will continue from now until next November. And if people don’t get out there and vote, it will continue beyond next November.

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  • beulahmo

    They’re betting that Obama and Democrats will pay for the consequences of their craven behavior. I think they’ve *badly* miscalculated. Watch for it — severe backlash is building. They will NOT be able to pin this on Obama.

    • JMAshby

      I agree.

      • http://www.politicalruminations.com/ nicole

        FYI, Ashby, Ronbo is back.

        C & Ping same remark on diff posts.

        • JMAshby

          I know. I already banned him.

          • http://www.politicalruminations.com/ nicole

            :)

    • http://www.politicalruminations.com/ nicole

      I wish I agreed. I do not have that much faith that the American people pay enough attention to understand whose fault it is.

      • http://pulse.yahoo.com/_YM23FX2FBZEC3UVDPZRGCUBIZ4 staci

        I’m with you, Nicole. I would have never thought we (as a country)would have gotten to this point on the stupid scale, but here we are.

      • JMAshby

        I would feel the same if not for the complete clusterfuck that is GOP Governors. Governors have brought all of these issues home to a lot of voters.

        When its in your face, as it is in FL WI MI OH IN, its a lot harder to escape paying attention.

        • http://www.politicalruminations.com/ nicole

          I absolutely hope that you’re right, Ashby, and that I am dead wrong. I just have some serious doubts.

          • http://twitter.com/SugaRazor Razor

            I agree. Republicans have an uncanny ability to wash their hands of this stuff. Sure, it catches up to them every 15 years or so, but they just double down on crazy and get the Democrats out of power within 4-6 years.

            It’s a game of inches. And since JFK, they’ve gained a mile.

          • http://twitter.com/Beulahmo Laura

            It’s a game of inches, but I think we get periodic breaks in social/political inertia wherein change happens quickly (one form of quick change is plain ol’ backlash).

            The bad news is that we’re (middle, working-class and poor) about to lose even more of our meager wealth–right at the same time that GOP is screaming for austerity measures. The good news is that, it’s still quite clear who represents the rich (and always getting richer) and powerful. Yes, there’s some pessimism that the Democratic Party is less concerned about the middle/working-classes and poor than they *used* to be; however, the current political battles — observed in their simplest terms — are made up of sharp contrasts between the two parties’ positions.

            I dunno. I sympathize with people here who are pessimistic because I often still have to fight against anxiety and despair. I just believe that most people in our society still have, at their core, and deep understanding of fairness. And at some point they’ll be sufficiently motivated to get off their butts and vote the sorry GOP fuckers out.

          • Scopedog

            The problem, Laura, is that pessimism doesn’t translate into action. Sure, it’s nice that some can lay back and fling the stones at both sides, but as it’s been clearly demonstrated, there really IS a difference between both parties, and has been for years.

            Nader’s nonsense in 2000 aside, I don’t know how anyone could look at 2001-2009 and turn and look at what President Obama has done and say, “Well, he’s just like President Bush”. That’s just plain crazy. This President is not above criticism, but only a cynical fool with their heads firmly jammed up their keisters could say that he doesn’t care about the Middle Class.

            He’s done nothing but bend over backwards for the Middle Class and the entire country, for that matter, and still he’s getting flack.

            Honestly, though, it all goes back to 2010. These jerks were upfront in what they wanted to do, and some of us said, “Yeah, whatever! So what if they get in; Obama hasn’t done s**t!!”

            Well….look where we are now. All thanks to pessimism and cynicism–on BOTH sides.

          • http://twitter.com/SugaRazor Razor

            It is silly to say Obama is just like Bush, but he clearly isn’t the politician than ran in 2008. He’s too concerned with being the great uniter and compromiser, but he’s become little more than President Doormat.

        • http://twitter.com/Beulahmo Laura

          Include Texas in your list. Our schools are being destroyed by Republican budget cuts.

        • Scopedog

          JM, that might be the key. The fact that these Repub governors have done such a beatdown on their states may (well, hopefully) cause some to come to their senses and basically push back against the GOP.

          Buyer’s remorse has set in in FL, WI, OH, and MI, but what needs to happen is to build that anger up and channel it over the next year to make damned sure that these SOBs are kicked out of power, hopefully for the next 2 or 3 generations.

          But it’s going to require a concerted effort to put the facts out there in the media, in all media, and not to get pulled down by the nose-cutting that the PL is known for.

      • http://twitter.com/Beulahmo Laura

        I may be too optimistic, I admit. However, I keep seeing signs that more complacent/apathetic Americans are starting to pay attention because they’re increasingly feeling the effects of class warfare in their own lives. At some point, there’s GOT to be a groundswell of backlash down here among members of the vast, non-partisan electorate.

        • Scopedog

          “At some point, there’s GOT to be a groundswell of backlash down here among members of the vast, non-partisan electorate. ”

          There should be, but it needs to be aimed at the right people–and that’s the GOP.

  • http://twitter.com/bphoon Brian C


    Their sole function is to profit. To make money. Their function is not to create demand. Their function is to service demand. That is why government should NOT be run “like a business.”

    Bing-fucking-o. This, too:


    Household purchases, which account for 70 percent of our economy, only rose 0.1 percent. It rose only 0.1 percent because there is no demand. And the only force with the power to create demand right now is the federal government.

    Bullseye. This is a demand driven economy, like any other capitalist economy. Of the three legs of our economic stool, the consumer one (70%) hasn’t sufficient resources to spur growth and the business one is too stymied by that bugaboo uncertainty (gee, remember when extending the Bush tax rates was the cure for this uncertainty?) so the only one left upon which to stand the stool is government. This is precisely the wrong time to cut spending. Government needs to create work for the unemployed (infrastructure, anyone?) so demand starts to ramp up. Once it gets to the level where increases in productivity can’t continue to meet it by themselves (or, in other words, when manufacturing starts to get back to full capacity) business will then, and only then, get off its ass and start spending money for growth again. Then, once the economy is growing on its own at an acceptable pace, you start cutting spending.

    Jeez…didn’t any of these fools take Macroeconomics in college?