Saturday, October 12, 2013

Why is Corporate Media giving Schweikert a pass on vigorous debt ceiling advocacy?

David Schweikert, the Republican who represents Arizona's Sixth Congressional District is a rich man.
WASHINGTON – At least four members of Arizona’s congressional delegation had estimated wealth of more than $1 million in 2010, according to a report by the Washington Post.
Rep. Trent Franks, R-Glendale, topped the list with an estimated net worth of $33.9 million, an increase of more than 400 percent since 2004, according to the analysis.
He was followed by Republican Sen. John McCain with $16 million, Rep. David Schweikert, R-Scottsdale, with $6.2 million, and Rep. Ed Pastor, D-Phoenix, with $1.1 million.
But only one of those four are vigorously advocating against lifting the US Treasury's Debt Ceiling.
“It is implausible the United States would ever default,” he said. “The math makes that clear.”
Schweikert is one of a growing number of Republicans who insist the country will not default if it hits the debt limit, and he accused Lew and President Barack Obama of using the word “default” as a scare tactic. In speeches on the House floor, in public appearances and in a letter this week to Lew, Schweikert has insisted that the U.S. has options that do not require raising the debt limit.

David Schweikert is also an ambitious politician with a disarming smile and gracious manner.

In 2010, running for what would become his first term in Congress, Schweikert campaign material boasted about his track record with investments.
One of his great successes was earning over 300 million dollars in investment income while never taking a loss during a volatile bond market.
Impressive, right? No doubt. A skill that has served him well? Too well, maybe.

In the wee hours of the morning a few days ago, I posted about Schweikert.
Left unstated in his grandiose claim is that if there is plenty of cash to make debt service payments, other demands (bills now due for payment) for the cash now in the treasury would be left unpaid.
Later that day, USA Today reported, in a story headlined Debt limit breach no big deal, some GOP lawmakers say:
Everyone agrees that the nation is coming up against the $16.7 trillion debt ceiling. The debate is over when that will happen, and what comes next. [...]
"I will hear language like, 'Well, we are heading toward the debt ceiling and you are going to default.' Anyone that says that is looking you in the eyes and lying to you, either that or they don't own a calculator," Rep. David Schweikert, R-Ariz., said in a House debate Friday. [...]
"The bottom line is, Treasury has the ability to manage that, so the date is whatever Secretary Lew claims the date will be," said Rep. Jeb Hensarling, R-Texas. 
White House officials concede there's some truth in that. The government will still have $30 billion in cash on Oct. 17, plus whatever tax receipts come in each day. "You'll have days, not weeks, until you deplete that money and you default," said Jason Furman, chairman of the Council of Economic Advisers, at the Politico breakfast. "It's irresponsible to get to the 17th — but no, you don't fall off a cliff instantly."
The Treasury Department says even approaching the debt limit could rattle the markets and result in increased borrowing costs
Veronique de Rugy, an economist at the free-market Mercatus Center at George Mason University, said the debt ceiling will have to be raised sooner or later — and Republicans should know that. (emphases mine)
David Schweikert KNOWS full well that pushing the US Treasury to the brink of default will rattle financial markets. When credit ratings downgrade, borrowing costs go up, sometimes dramatically. But he is not concerned. After all, he has the expertise to profit magnificently from volatile bond markets, right?

Despite numerous reports in the immediate aftermath of the federal government shutdown that -- failure to restart the government should have no negative consequences for the US Treasury credit rating -- credit rating agencies are increasingly unsure the same holds true in the event the debt ceiling is not lifted. From Bloomberg,
The U.S.’s top AAA credit ranking was put on review “with negative implications” by DBRS Inc., which cited the government’s failure to raise the federal debt limit.
The Toronto-based ratings company took the action as a deadlock in Washington kept the U.S. government partially shut for a ninth day and a debt deadline approached. Treasury Secretary Jacob J. Lew has told Congress extraordinary measures being used to avoid breaching the $16.7 trillion debt ceiling “will be exhausted no later than Oct. 17” and the department will have about $30 billion in cash to pay obligations.
“This action reflects the growing risk of a selective default by the federal government,” DBRS said in an e-mailed statement. The move “reflects the increasing uncertainty over the debt-ceiling outcome, combined with the potential lingering repercussions on both domestic and international investor sentiment, and therefore the U.S. economy and financial markets.”
Standard & Poor’s stripped the U.S. of its top credit grade on Aug. 5, 2011, citing Washington gridlock and the lack of an agreement on a way to contain its growing ratio of debt to gross domestic product. The ratio of public debt to GDP is projected to decline to 74.6 percent in 2015 after peaking next year at 76.2 percent, according to a Congressional Budget Office forecast in May. 
I repeat: David Schweikert KNOWS full well the ramifications of pushing the US Treasury to the brink of default. After all, he has (boasted of his) expertise to profit magnificently from volatile bond markets.


David Schweikert also strongly advocates for transparency. In November 2011, I blogged about a 60 Minutes segment regarding Congress profiting from insider information. Correspondent Steve Kroft prefaces the clip by saying Washington insiders, like Congressional representatives, are in an environment of privilege, where rules that govern the rest of us, do not always apply to them. He says, the biggest challenge they face is avoiding temptation.
Sunday night on 60 Minutes, the CBS News magazine, Congressman David Schweikert was shown declaring that he favors immediate disclosure of key information such as potential conflicts of interest on the part of Members of Congress.
60 Minutes correspondent Steve Kroft confronts Schweikert about the S.T.O.C.K. Act (Stop Trading on Congressional Knowledge) at the 12:50 mark of this 15 minute video.
The Congressman, who encourages his constituents to call him "David," says he had never heard of the legislation, but "I would have no problem with that. But then again, I'm a big fan of instant disclosure on almost everything."
Anyway, Schweikert has supported transparency for the Federal Reserve, transparency related to Obamacare, and is even able to laugh at himself regarding goofs on Twitter.

Shouldn't a FREE PRESS help those Washington insiders resist the temptation that comes along as what Hoover Institution Fellow Peter Schweizer calls "soft corruption?"

If journalism wasn't dead (or tragically neutered) would not Washington lawmakers have a much easier time resisting temptation? Instead, as we saw in a big way with the 2012 election season, politicians are easily able to intimidate reporters working for corporate media.


Nevertheless, it surprises me to a degree that after I wrote about this situation with Schweikert the other day, I neither heard from my Congressman by phone, voice mail, email, Tweet or Facebook. I have seen him continue to post notes asking people to listen to him in radio or television appearances. But I've neither seen nor heard anything resembling a response to the questions raised by his advocacy for ignoring the Debt Ceiling, his personal wealth and his experience making mega bucks in volatile bond markets.

Will corporate media ever demand David Schweikert answer these questions?

1 comment:

  1. I remember in 2010 the Arizona Republic endorsing then Candidate Schweikert over then Congressman Mitchell on the sole basis of Mr. Schweikert having been an accountant. A true accountant would never play games with the taxpayers the way Congressman Schweikert does.