The Onion on the Debt Deal: Very Funny, Very True

The Onion, a popular satirical magazine, has a very precise description of the debt deal. The essay mocks the extraordinary concessions the Democrats made to Republicans during the negotiations. Read about it here: Obama: Debt Ceiling Deal Required Tough Concessions By Both Democrats And Democrats Alike.

Zappos Bares The Whole Truth

Quick ... what's the first thing you think of when I say Zappos?

Let me guess ... shoes, right?

Well, Zappos is setting out to change that perception with their latest print ad campaign, in which women are shown wearing nothing but shoes. Covering the well, sensitive parts of their bodies, is a sign which reads "more than shoes."

In a story written by The New York Times, American Apparel's Director of Online Marketing offers the following:

“Are they doing it because they want to get attention

from blogs and Web sites that will write about it? 

Or are they doing it because it’s the ad campaign that speaks

most truly to who they are and what they want to sell?” 

For those that know the Zappos brand, you would have to agree that they are not a typical run-of-the-mill brand. Well renowned for their quirky sense of humor and appeal, customers appear to be very loyal to the brand and their unrelenting focus on customer service.

But, will Zappos customers associate the scantily shoe-clad models with the brand they know and love? Or am I merely playing into Zappos' hand by blogging about this campaign?

What do you think?

Stock Market Declines Sharply. Is Debt Deal to Blame?

The stock markets declined sharply today. Several sources point to various factors -- including the passage of the debt deal -- as the cause of today's dramatic decline.

Because the debt deal requires an extraordinary reduction in government spending, many analysts fear that this will worsen an already struggling economy. Governmental participation in the market for goods and services increases demand and generates economic activity. If this demand declines, however, then so will the overall volume of business activity. This is basic macroeconomic theory.

Bloomberg/Business Week:

Many economists, including Federal Reserve Chairman Ben Bernanke, have said the U.S. economy would gain momentum in the second half of the year as gas prices fall and Japan's factories recover from the earthquake disaster in March. Slow U.S. manufacturing growth, a weak job market and concerns about spending cuts in the debt deal have cast doubt on those predictions.

The Street:

The parade of poor economic numbers has started to fuel speculation about a possible need for further monetary easing by the Federal Reserve, although the rise in inflation in recent months presents an obstacle to further stimulus. The deep pullback in government spending necessitated by the deficit reduction legislation, coming as it does amidst a time of high unemployment, added to nervousness over the economic outlook.

Some economists had already predicted that the spending cuts would harm the economy.

Paul Krugman

Krugman criticized President Obama for "surrendering" to the Republicans. Krugman also argued that cutting spending was bad news for a potential economic recovery:

Start with the economics. We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.

The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.

Indeed, slashing spending while the economy is depressed won’t even help the budget situation much, and might well make it worse. On one side, interest rates on federal borrowing are currently very low, so spending cuts now will do little to reduce future interest costs. On the other side, making the economy weaker now will also hurt its long-run prospects, which will in turn reduce future revenue. So those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them, and thereby made them even sicker.

MSN Money

Joel Naroff, president of macroeconomic consulting firm Naroff Economic Advisors, disagrees with the plan on this fundamental level. "The idea that increasing taxes cuts jobs but decreasing spending doesn't is silly," he says. Instead, a decrease in government spending is going to slow economic growth, worsening an already dismal national economic situation. "It's going to slow growth. If you have slow growth, you're going to have less hiring. In some parts of the economy, there are actually going to be layoffs." In particular, Naroff foresees further job losses in state and local government.

Hotels.com Blows Away Customers

Alright, I admit, there is a childlike side of my personality that just loves little claymation figures. I think it may harken back to the days of the Rudolph the Red-Nosed Reindeer cartoon figure that I absolutely fell in love with when I was a child.

So, when this commercial for Hotels.com, announcing their 30% off summer sale, came on the other night, I was drawn in immediately.

As I watched the commercial unfold, I found myself wondering why the family's hair was consistently shown being blown by the wind. Until the rug pull happened, of course ... they were "blown away" by all the savings. Nice tongue-in-cheek Hotels.com.

 The only thing I haven't been able to figure out was the lure of a free Amazon Kindle at the very end of the commercial. When I visited Hotel.com's website, I didn't find any mention of it either.

Absolut Advertising Anything But Blank

Building on a lifelong history of romancing their iconic vodka bottle, Absolut is inspiring artists around the world with its next adventure.

This journey began with a creative brief which was distributed to a number of the world's hottest young artists. Artists were given a clean canvas of a large Absolut vodka bottle and asked to create a masterpiece founded on the basis of their new campaign, "It all starts with an Absolut Blank."

The 18 artistically inspired bottles are intended to be a limited run collection. This inaugural line staged its debut in the UK, with plans to air advertising on billboards in L.A. in the near future. The completed artwork will be placed on public display and then extended into print, interactive, digital, collages, murals, and light installations.

Take a peak at some of the stunning designs created for this campaign.

Absolutly Amazing.

On Healthcare Reform, Florida Is Consistently Bad

Florida, along with several other states filed a lawsuit challenging the constitutionality of the Affordable Care Act. But once the federal government began providing grants to states to assist them with healthcare delivery, some of the very states that oppose the legislation began accepting and applying for these funds. Not Florida!

According to an article in the New York Times, Florida has remained defiant and has rejected federal funding that the healthcare reform legislation provides to states. The impact of the state's refusal to participate, though consistent, seems like poor medicine for a populous state with so many poor and uninsured individuals:

Despite having the country’s fourth-highest unemployment rate, its second-highest rate of people without insurance and a $3.7 billion budget gap this year, the state has turned away scores of millions of dollars in grants made available under the Affordable Care Act. And it is not pursuing grants worth many millions more.

In recent months, either Gov. Rick Scott’s administration or the state’s Republican-controlled Legislature has rejected grants aimed at moving long-term care patients into their homes, curbing child abuse through in-home counseling and strengthening state regulation of health premiums. They have shunned money to help sign up eligible recipients for Medicare, educate teenagers on preventing pregnancy and plan for the health insurance exchanges that the law requires by 2014.

While 36 states shared $27 million to counsel health insurance consumers, Florida did not apply for the grants. And in drafting this year’s budget, the Legislature failed to authorize an $8.3 million federal grant won by a county health department to expand community health centers (emphasis added).

See more here.

Progressive and Liberal Criticism of the Debt Deal

President Obama has accepted a compromise to raise the nation's debt ceiling. In exchange for raising the ceiling, Congress will immediately slash over a trillion dollars from government spending. A "supercommittee" in Congress will then propose additional cuts of nearly two trillion dollars late this year. If Congress cannot agree to specific cuts, then the cuts will be made across the board.

The debt compromise only includes spending cuts. It does not include any mechanism to increase revenue, even though both lower revenue and higher spending have caused the historically high deficit. Also, President Obama initially said that revenue must be a factor in any compromise. He later abandoned that position.

Criticism from the Left

Many liberals and progressives have responded critically to the compromise. Here are some of those arguments.

Robert Reich

Reich, Secretary of Labor during the Clinton Administration, has offered a scathing critique of the proposal. Reich argues that:

Anyone who characterizes the deal between the President, Democratic, and Republican leaders as a victory for the American people over partisanship understands neither economics nor politics.

The deal does not raise taxes on America’s wealthy and most fortunate — who are now taking home a larger share of total income and wealth, and whose tax rates are already lower than they have been, in eighty years. Yet it puts the nation’s most important safety nets and public investments on the chopping block.

Glenn Greenwald

Greenwald, a columnist for Salon.com, attacks the notion that Obama was compelled to accept the slashing of safety net programs in order to prevent a default. Greenwald says that, instead, Obama wanted that outcome:

It appears to be true that the President wanted tax revenues to be part of this deal. But it is absolutely false that he did not want these brutal budget cuts and was simply forced -- either by his own strategic "blunders" or the "weakness" of his office -- into accepting them. The evidence is overwhelming that Obama has long wanted exactly what he got: these severe domestic budget cuts and even ones well beyond these, including Social Security and Medicare, which he is likely to get with the Super-Committee created by this bill. . . .

Jared Bernstein

Bernstein, an economist and former economic adviser to Vice President Joe Biden, has written several essays criticizing the debt deal. Bernstein has criticized the lack of a revenue-generating provision in the compromise; he has argued that conservative ideologues were willing to sacrifice the health of the nation to get spending cuts; and he has argued that the debt compromise will inevitably lead to deep cuts in safety net and other important domestic spending programs.

Liberals in Congress

Liberals in Congress have begun to criticize the deal as well. Rep. Emanuel Cleaver, chairman of the Congressional Black Caucus, described the proposal as "a sugar-coated Satan sandwich" and as a "shady bill."

Also, the debt deal apparently does not thrill Nancy Pelosi. The Washington Post reports that Pelosi offered lukewarm reactions to reports of the compromise:

First, Pelosi said of the deal: "We all may not be able to support it, or none us may be able to support it." Then, later in the evening she folowed up with this lukewarm comment: "I look forward to reviewing the legislation with my caucus to see what level of support we can provide."

Conclusion

Despite these critiques, Congress will probably approve the debt deal. But if the bill passes without significant changes, it simply cannot represent a victory for President Obama -- unless he is really a fiscally conservative Republican in disguise.