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Thing One: Bracing For The Next Crisis: What a relief, America, you are no longer held hostage to the fiscal-cliff crisis. But don't wander away too far, because we're going to need to take you hostage again in just a couple of months.
After weeks of wrangling and posturing over what to do about the ticking time bomb of tax increases and spending cuts they created, our heroes in Congress last night passed a deal to kick that bomb firmly down the road, to March or late February. It must be a great deal, because nobody likes it. The Tea Partiers who voted against it hate that it doesn't cut spending, as they crave; in fact it raises spending a bit, on jobless benefits and other such fripperies. Republicans are also bitter about having to vote for the first tax increase in more than 20 years. But the tax pain is shared broadly -- the deal lets the payroll tax cut expire, meaning 77 percent of American workers are going to get smaller paychecks this year, according to a Tax Policy Center study. That's 160 million workers, according to The Huffington Post's Catherine New.
Despite the pain, the deal only shaves about $650 billion from the deficit, far short of the $4 trillion that's needed, according to David Wessel of the Wall Street Journal. And if you want to get all technical about it, because it makes most Bush tax cuts permanent, the deal actually adds $4 trillion to the long-term deficit, according to the Congressional Budget Office. Grover Norquist's starve-the-beast dream is now a permanent reality, warns Jeffrey Sachs, meaning nightmarish spending cuts in the future. Robert Reich thinks the deal sucks in five very specific ways. Paul Krugman is a little more philosophical about it, saying that at least Social Security and Medicare benefits weren't cut. But he and the New Republic's Noam Scheiber warn that President Obama's apparent zeal for caving in the fiscal-cliff talks sends a terrible message about how firm he will be in the next crisis to come.
And that crisis is coming soon, which may keep the stock market from rallying too hard today, warns Jonathan Cheng of the Wall Street Journal, though foreign markets have risen overnight and this morning. The next crisis will be at least three crises rolled into one, so it could make the fiscal-cliff crisis look like a playground tussle. All at about the same time, around the end of February or the start of March, we've got to 1) raise the debt ceiling again, 2) deal with another "continuing resolution" to not shut down the government, and 3) decide what to do about hundreds of billions of dollars in spending cuts delayed by this fiscal-cliff deal. You may recall that the 2011 debt-ceiling fight resulted in America losing its AAA credit rating, crushed the stock market and led to the fiscal cliff. Are you ready for a repeat?
Thing Two: Another Year, Another Massive Bank Settlement: Looks like banks are picking up 2013 right where they left off 2012: Paying large, wrist-stinging fines. The Wall Street Journal reports that banks are just about to sign off on a $10 billion settlement over charges that they abused the mortgage-foreclosure process. The settlement will end a lengthy review of their practices, which was just proving too hard and too lucrative for the consultants being paid (by the hour?) to do the review, the WSJ writes. Needless to say, $10 billion is probably not even the cost of doing business for the banks involved, and investors will almost certainly not care, just as they did not care about any of the endless bank scandals, fines and incompetence last year.
Thing Three: You Want Factory Data? You Got It! Sexy, sexy hot factory data are just oozing out all over the place, making this New Year's extra steamy. China's manufacturing output improved a little bit in December, the Wall Street Journal writes, showing that economy is maybe on the mend. Too sexy! In fact, factory data are busting out all over Asia, according to the WSJ, just one hot report of not-bad manufacturing output after another, until you almost can't stand it. Oh, but European factory data were very naughty in December, according to Quartz. Looks like somebody needs a spanking and/or a sign of ongoing recession. And just when you can't take it any more, the U.S. gets its own factory-output reading later today. Who needs a cigarette?
Thing Four: Cars To America: You're Welcome: Who could have seen this coming, but apparently auto sales saved the American economy last year, according to the Washington Post, accounting for 30 percent of growth in the first half of the year. But that's not saying much: The post-crisis economy is still in terrible, terrible shape, warns the Wall Street Journal's very busy David Wessel.
Thing Five: Corporate Health-Care Conundrum: Another theme for the new year, including perpetual crises, will be companies trying to figure out how to limit the pain of having to pay their greedy workers for health care under the health-care reform law, writes the Wall Street Journal. Many companies that don't offer health insurance to employees will have to start doing so by 2014, and those that already provide insurance could see greater demand because of the law's mandate that individuals get insured. Most companies are probably going to suck it up, but you can bet many will whine about it as much as possible.
Thing Six: Stinkeye For Tech: Another theme for 2013 will be tech giants increasingly getting the stinkeye from regulators over their privacy practices, according to the New York Times. But don't worry: Google, Facebook and other companies in the spotlight have plenty of money for lobbying.
Thing Seven: The Arctic Strikes Back: Poor Shell just can't catch a break when it comes to drilling for oil in the Arctic. Now one of its offshore oil rigs has broken loose and run aground off the Alaskan coast, though no oil is coating Arctic wildlife just yet. It's the latest in a series of mishaps, the Washington Post observes, in what one can only hope is an effort by Nature to finally take matters into its own hands.
Thing Seven And One Half: The Bride Wore Pink, The Groom Wore Depends: Hugh Hefner has found true love at last, it has emerged: The 86-year-old ghoul last night married his 26-year-old sweetheart Crystal Harris. The wedding night lasted approximately two seconds, by Harris's estimation.
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Calendar Du Jour:
10:00 a.m. ET: ISM Manufacturing Index for December
10:00 a.m. ET: Construction Spending for November
All Day: Auto and truck sales for December
Heard On The Tweets:
Is Fiscal Cliff that guy from Cheers? The one with the thick Boston accent?
— Michael Showalter (@mshowalter) January 2, 2013
Bush tax rates forever....for-ev-er....forrrr-evvvvv-errrrrrr.....
— Tony Fratto (@TonyFratto) January 2, 2013
Karl Rove says there's still a chance to beat this bill
— daveweigel (@daveweigel) January 2, 2013
I wonder what angry stupid people think of all this. I'llcheck C-SPAN's call-in show.
— Joshua Holland (@JoshuaHol) January 2, 2013
Not enough people made "don't tweet the same thing as 50 other people" a new year's resolution.
— Whitney Snyder (@whitneysnyder) January 2, 2013
And you can follow me on Twitter, too: @MarkGongloff
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