While rare bipartisan support has Congress all but ready to vote on and pass the Pipeline Transportation Safety Improvement Act of 2011, the Associated Press and other news outlets report that Rand Paul is single-handedly blocking it in the Senate.

Rand Paul’s inner liberal steps out for tougher pipeline safety regs. [The Arena].

Dear Friends,

I’m disappointed too. I’m less disappointed in what this President said he was going to be vs. what he is than I am between that and what I wanted him to be. He has not lived up to all of his promises, but even looking at his promises he never said he was going to be our knight in shining armor. Republicans said he would be… but who can trust anything they say at this point?

I am frustrated and I am disappointed because I believe, like you do, that there are rare, once in a generation opportunities being lost. I’m frustrated that what I think could be possible right now is not getting done. But as disheartened as I may be at lost potential, even at some outright failures, I have never for a day been sorry I voted for this president. The other choice was John McCain! Hell, if that had happened, Karl Rove wouldn’t be throwing millions of dollars at Republican candidates from Houston, TX… he would still be in Washington throwing hundreds of billions of dollars down far right rat hole after far right rat hole. Are things bad? Yes. Would they have been even worse? Hell yes!

This is not the time… well, there never is a time, but certainly this is not the time for liberals to throw up their hands in defeat. This is the time to take the toe hold we have and make it a foot hold, so we can make that a step, so we can… you know… something like that. I’m not sure exactly where that analogy leads.

But understand my point. This is when we double-down. This is when we fight to reform a broken and corrupted system. This is when we fight to use Joe Lieberman and Blanche Lincoln and Ben Nelson to demonstrate our power and our conviction. This is when we toy with the Democratic establishment with talk of primary challenges from Al Franken, or Alan Grayson, or Anthony Weiner. This is when we send letters of support to members of the Progressive Caucus and demand that they stand firm.

Our nation is in a deep hole of conservatism that you and I know skirts along the thin edge of fascism. I would love to jump right out of that hole with an FDR or a JFK or a Johnson, but if that isn’t an option I’ll be damned if I’m going to give up and watch while the hole gets dug deeper and deeper. I just can’t in good conscience allow that to happen unopposed.

We have to make our stand.

Schroedinger explained a central paradox of quantum mechanics with an analogy of a cat inside a box and a situation that boils down to the idea that anything you do to detect whether the cat is alive or dead, kills it.  So you can’t ever know whether it is alive or dead because any attempt to find out, makes it dead.

Business school students and entrepreneurs find a similar paradox in business.  Profits are a result of a well run business.  If you focus on running your business better, increased profits usually follow.  If you focus on increasing your profits, they disappear.  This is why, contrary to what every business student thinks as a child, business plan’s don’t start out with the objective of “make money”.

Our political class has not figured this out yet.  When things happen there is a reality of what happened.  At the end of the day there is going to be a public perception of this reality.  The idea of “spin” is born of a desire to manage the public perception of this reality.

The political class has gotten so focused now on spinning the public perception of reality that they have completely lost sight of the actual reality in the first place.  They now make all of their decisions on the basis of the impact it will have on the public perception of reality and, like the physicist who has to see whether the cat is alive or dead, or the business leader who is willing to do anything under the sun to increase profits, they are ending up doing exactly the things that they shouldn’t be doing and they end up damaging public perception instead of managing it.

The Sherrod case at the USDA puts this into stark relief.  When Fox News started pushing the made up story that the White House was incompetent because they harbored a racist, the White House immediately became incompetent by demanding, with no due diligence, with no investigation, with no questions, that this person resign.  They were so desperate to manage the perception of their competence that they actually had her pull her car off the road she was driving on so she could text message them her resignation.

Our entire system of governmental checks and balances exists to protect balance the rights of individuals with the demands of mobs.  But there was no balance at all here.  The mob said they would be considered incompetent if they didn’t fire this woman so they fired her immediately!  Immediately!  This was an incompetent thing to do, and as the incompetence became clear just as immediately when the mob’s information turned out to be patently false.

Now how do they look?  They look incompetent, which is exactly what they did not want to look!  But had they actually been competent, they would have come out of this situation looking competent, because they would have been competent!

This is by no means a unique situation for this administration.  This same dynamic has plagued the Obama administration since the campaign.  They have consistently and persistently reacted to charges of incompetence by becoming incompetent instead of ignoring the charges and focusing on actually being competent!

It isn’t even unique to this administration.  Both Hillary Clinton’s and John McCain’s entire presidential campaigns were so focused on how the public perceived them that they abandoned all reality of what they were… and ended up being perceived as people who would abandon all reality of who they were to manipulate public perception!

And this isn’t unique… to any of them at this point.  This problem has completely swamped the entire Republican party, and great huge portions of the Democratic party are infected too.

Politicians desperately need to learn that the only way to appear competent is to be competent!

$200 Million GOP Campaign Avalanche Planned, Democrats Stunned.

This is unfortunate, but the dynamics described on the left are pretty accurate, and for good reason.  Unions and the progressive activist base have been focused on issues advocacy and primary challenges over Democratic Party solidarity because the Obama administration and the Democratic Party leadership have made it perfectly clear that they will not advocate for our issues.  At the very least they’ve made it perfectly clear that they won’t advocate for our issues while the bastards we’re waging primary challenges against still cling to power! And they’ve made it perfectly clear that they don’t give a damn about union and progressive issues because after the conservative Democrats we’re challenging in the primaries totally wrecked the progressive and labor agenda… they backed them for re-election anyway!

What was Joe Lieberman’s punishment for stripping healthcare reform of the public option after even the public option that was left had been watered down to practically nothing?  What was Bill Nelson’s punishment for the damage he did?  What was Mary Landrieu’s punishment for the damage she did.  What was Blanche Lincoln’s punishment for the damage she did?  What was Stupak’s punishment for the unbelievable way he sold out two generations of progressives fighting desperately to hold on the gains they’ve made for women’s health?

The answer?  Nothing! They all have the full support of the administration and Democratic leadership.  Joe Lieberman included!

But the administration can’t have it both ways.  If they want the money and energy of progressive activists and union families they have to give us a reason why we should give it to them.  We don’t give a rats ass about their priorities or their careers.  We were unified during the election because they were supposed to be the path to our priorities.  They weren’t.

We are fighting for the same thing we were fighting for before… our issues.  But now we’re also fighting to reform the entire system because if there’s one thing that we’ve learned from our landslide electoral victory and our anorexic legislative victories is that the system ain’t working.  And where are they on that?  Nowhere.  They seem to be fine with the system the way it is.  Whatever.  Everybody makes choices.  Back Blanche Lincoln.  Coddle Joe Lieberman.  But do it without us.  Call us after the elections if you’d like to rethink how you are going to handle the next two years.

Ryan Grim makes a case, which I agree with, that the politics of focusing on deficit reduction right now are as bad as the economics.  Unfortunately, one of his key arguments doesn’t hold water.  This is a shame because Grim is one of the good guys and should know better.

Mayberry Machiavellis: Obama Political Team Handcuffing Recovery.

His argument that doesn’t pass muster is that the low interest rates investors are requiring for US debt indicates that they are not concerned about our ability to pay it off.  But interest requirements are based on a whole basket of factors, one of the most important of which is what else is available on the market.

The core worldwide economic imbalance behind not only the financial crisis, but the bubbles that came before it, is that global investors have amassed so much capital that we can produce far more goods and services than global consumers can afford to buy.  It’s simple.  The supply of capital has gone far beyond the demand for capital, therefor the price of capital (price being required return on investment) has fallen to almost nothing.

Investors cannot hide billions, trillions, of dollars of excess capital in mattresses.  It has to go somewhere.  Even though the value of capital is so low that at times over the past two years interest rates have actually been negative, the investor equation stays the same.  Whether maximizing return or minimizing loss, its the same math.

And that’s what we’re seeing in government debt.  There is a certain amount of investment capital that is being put to good use and that has the potential to earn significant returns with minimal risk.  But there just isn’t enough demand from opportunities like this to soak up all that capital.  So the rest of it has to be parked in places where there are lower opportunities for returns and/or higher risks.  With minimal opportunities for returns, investors seek to minimize risks.

So yes, US debt is seen as a relatively safe investment compared to what else is available right now, but “compared to” are the key words.  The US government is benefiting from being basically the only game in town.  It is able to insist that if investors want to park their funds there, because there is nowhere else to put them, they can do so but it won’t pay them (much) for the privilege.  If, in a few years, the economy is growing again and there is actually a need for all this excess capital, interest rates will go up even if investors don’t change their outlook at all on how risky US debt is.  In finance, everything is relative.

So, I agree with Ryan Grim that the administration is screwing up this issue with the exact same dynamic they have used to screw up any number of other issues.  But our cause is not furthered when we build arguments on swiss cheese foundations.  We have good arguments and we should use them.