You are browsing the archive for fiscal cliff.

Europe’s permanent austerity crisis will soon be America’s

3:25 am in Uncategorized by fairleft

The European and U.S. problem is not only the year-after-year reality of high unemployment and slow or negative growth, it’s that results be damned most of us ‘still’ believe in austerity. The masters have reason to believe and even love austerity, because they get rich off moving wealth from the middle to the top, but dammit most of us chumps believe too. Read this December 14 U.S. Rasmussen Report and weep:

Overall, 73% of Likely Voters nationwide believe the federal government should cut spending rather than increase it in reacting the nation’s current economic problems. The latest Rasmussen Reports national telephone survey shows that just 18% are looking for an increase in spending.

That’s crazy in this economy, but it’s what 73% believe.

The belief in the medicine that will kill us is so pervasive it of course infects the news. An example is an article on tighter EU budget rules that will take effect on January 1. The common sense of this is plain: the rules if followed make austerity permanent because they prevent application of Keynesian solutions to economies in deep recession, as more and more European nations are. Here are paragraphs two through four with my comments between each paragraph:

Finalized in March, 25 of the 27 EU member states accepted a “balanced budget rule” in the compact to ensure that governments would no longer run the massive budget deficits which drove the debt crisis and nearly sank the euro.

But of course the original crisis was a ‘banker stupidity on a monumental scale’ crisis, and it was the multi-trillion dollar bank bailout — ‘required’ by European and U.S. big banks after they bet everything on the real estate bubble — that created those debts and continues to do so. But that history has been disappeared and now, for all mainstream readers, we have a debt crisis. The economies of the European south, of course, were not deficit-ridden before the bank bailouts. And in fact debt — deficit spending — is the only way out of austerity. So news on our current economic crisis describes the solution, ‘debt’, as the problem. Are you getting why I describe the European austerity crisis is permanent?

The Fiscal Stability Treaty also laid down penalties for those who breached the rules to limit deficits and debt, providing for a degree of central EU oversight to keep miscreants in line.

Damn, keep in line you juvenile delinquent, you ‘miscreant’ — synonyms include wrongdoer, criminal, villain, rogue, sinner, rascal, scoundrel, vagabond, reprobate, malefactor, blackguard, and evildoer. An economic minister who applies the standard Keynesian remedy to his country’s austerity-generated recession/depression is a scoundrel? Michael Hudson becomes Hudson the Rogue, Paul Krugman The Malefactor Krugman, were either allowed to determine economic policy.

And this is just the news, no intended agenda, just an inside the brain look at how most people think and what they believe. How do you escape disinformation so deep and multilayered? You don’t?

Notably, the balanced budget provision has to be written into national law, and preferably, enshrined in the national constitution, to make it very hard to change or get around in future.

Yeah, ‘enshrine’ this madness baby, make it ‘very hard’ for common sense anti-recession measures, the only ones that will work, ever again to be employed inside the EU. Economic austerity permanent, anyone?

And it is not just 73% of the population, or their news sources, that believe in the austerity lie. It’s also epidemic among most of ‘the mainstream left’: for example, Howard Dean, labor boss Andy Stern, and the ‘leftist’ Guardian’s finance editor. Bill Black writes (emphasis added):

It is hard enough countering Pete Peterson’s billion dollar campaign to inflict austerity and unravel and privatize the safety net. Peterson funds myriad front groups. We also have to counter the Wall Street wing of the Democratic Party, which dominates Treasury, OMB, the Justice Department, and the office of the Chief of Staff and favors austerity and unraveling the safety net. We should not have to deprogram progressives indoctrinated into repeating neo-liberal economic dogmas.

And yet we must, but that would only be a first step and without practical impact. Let’s face it, despite the catastrophic and consistent bad news everywhere produced by austerity policies and neoliberal economics, we’re _losing_ the influence battle. Badly. And so, uh, see the title of this article. Read the rest of this entry →

AP disinfo hypes as fiscal slope yawns

4:55 am in Uncategorized by fairleft

AP: Voter disdain spreads as ‘fiscal cliff’ looms

No, voter disdain is not spreading. What we have here is a baldfaced lie to promote a sense of impending crisis and doom, and all for that grand goal, so the rich and the President get their cuts to Medicare.

The AP propagandist, Steve Peoples, echoes the headline with this:

Evidence of Congress’ plummeting popularity is everywhere.

Well, no, that sure ain’t apparent in the opinion polls. In fact Peoples is forced to contradict himself, when he finally feels obliged to give us the actual numbers:

A recent Associated Press-GfK poll found that 74 percent of Americans disapprove of the way Congress is handling its job; just 23 percent approve. The figures are virtually unchanged from June and slightly above Congress’ recent low point of 12 percent approval during the debt ceiling debate in August 2011.

How does “The figures are virtually unchanged from June …” equal “Evidence of Congress’ plummeting popularity is everywhere.”?? What the hey? And in fact the figures are virtually unchanged since August, 2011.

Well, at least he allows these reassuring words from the real world: “… most people say they’re not following the daily developments that consume Washington.”

And this was nice too (!):

John Baker, 65, a Denver psychologist, said … “It’s a typical Washington, ‘Let’s hit the panic button and keep people scared so they will let us do what we want to do,’” Baker said in a downtown Denver Starbucks. “Ultimately, it will be fixed but not until a lot of pockets are lined.”

Peoples somehow interprets the preceding as support for “let’s make a deal before the ‘deadline’.” Sounds more like cynicism about the real intentions of Congress, the President, and the fingers-all-over-the-panic-button corporate media. And anyone’s who’s been following this knows he’s exactly right:

If history is any guide, the ever-accommodating Obama could still portray an increase in the Medicare eligibility age as a quid pro quo–the unavoidable tradeoff–for the Republicans allowing taxes on the rich to increase…even though the Republicans can’t prevent increases in taxes on the rich if the Democrats don’t make a deal!

Robert Reich: “I haven’t figured out Obama is a Republican”

5:49 am in Uncategorized by fairleft

That might as well be the title of his new column at Truthout, Why Is the White House’s Council of Economic Advisers Helping the Republicans? I mean, come on:

If the President’s strategy is to hold his ground and demand from Republicans tax increases on the wealthy …

Now Hold On There Bob,

What makes you think that is Obama’s strategy? On economic/financial matters — Wall Street and the rich people stuff — has he ever given the impression he’s anything but a Republican? Knowing that the President is a Republican, carrying forward the legacy of his hero, Ronald Reagan, your apparent confusions (I assume you aren’t really confused but are instead engaging in self-thought control in order to keep your ‘mainstream card’) in the following paragraphs are very easy to answer:

If the President’s strategy is to hold his ground and demand from Republicans tax increases on the wealthy, presumably his strongest bargaining position would be to allow the Bush tax cuts to expire on schedule come January – causing taxes to rise automatically, especially on the wealthy.

So you’d think part of that strategy would be reassure the rest of the public that the fiscal cliff isn’t so bad or so steep, and that at the start of January Democrats will introduce in Congress a middle-class tax cut whose effect is to prevent taxes from rising for most people (thereby forcing Republicans to vote for a tax cut for the middle class or hold it hostage to a tax cut for the wealthy as well).

Okay then, here it is, in the unlikely event the great Robert Reich is authentically confused: The President’s goals are to cut Social Security, Medicare and Medicaid. He wants to do this with a bare minimum of symbolic and avoidable ‘tax increases’ on his and his party’s main campaign donors, the rich. The best leverage for attaining the preceding expires on January 1, when there would be, as you note, automatic tax increases on the rich (his and his party’s main campaign donors (oh, I mentioned this already)).

In order to achieve his real goals, President Obama and his people are now and always have been on the same team as the Pete Peterson campaign against Social Security, the same team as the debt fearmongers, and the same team as the ‘we love austerity’ folks. And so, as you would reasonably expect, his Council of Right Wing Economic Ideologues is fearmongering the fake fiscal cliff.

You’re a helluva smart guy, your Keynesian/New Deal take is right on, and so I’m sorry for even slightly pretending you don’t understand all of the above. I’m sure it was that impermissible narrative thing that made you sound like a clueless idiot in your latest piece.

Sincerely,

fairleft

Goldman Sachs’ Blankfein issues Obama his orders

12:57 am in Uncategorized by fairleft

Lloyd Blankfein a few hours ago:

“Broadening the personal income-tax base by closing loopholes will generate substantial additional revenue while minimizing increases in marginal rates that could stifle risk-taking and robust growth.”

Republican Senator Boehner talked the loopholes scam a week ago and I assumed “his side’s” initial negotiating position would be President Obama’s final one, but now the money has spoken and said the same as Boehner.

So, we can be certain — markets, are you listening? — here’s how it will go down:

In the end Obama will enthusiastically extol ‘closing loopholes’ — which will take the rich and their tax attorneys five minutes to figure out how to get around — and that will be what ‘our side’ gets. No change in tax rates on the 1%. On the other hand, the 1% Democrats and Republicans will get definite and painful cuts in Medicaid and Medicare, and a perhaps smaller cut in Social Security that won’t be called a cut (it’ll be called ‘a change in the way cost of living adjustments are calculated’), but that will amount to a 3% slash after ten years, 6% after twenty, and so on.

If Romney were President I don’t think he would be able to get away with this … but he was worser evil-wise, apparently.

Wait, Obama is _leading_ the fiscal cliff scare campaign

5:34 am in Uncategorized by fairleft

Establishment writers, liberal and conservative, in careering or faith-based defiance of reality, continue to frame mainstream political processes as oppositional. The ‘huh?’ head scratching over Aditya Chakrabortty’s new Guardian article starts with the sub-head:

The economic abyss is a distortion peddled by the US right and Obama’s Democrats – just like Britain’s left – need to counter the myth

Wait … wh-at? You’re beseeching “Obama’s Democrats” to what? COUNTER the myth? But, aren’t they, I mean …

Obama demands fast action on fiscal cliff
Election behind him, Obama to talk “fiscal cliff”
Obama to Discuss ‘Fiscal Cliff’ with Labor Leaders

So can it be any more obvious who is leading the campaign to over-hype a fiscal slope into a cliff? Obama! Obama’s Democrats! I can’t believe you haven’t noticed this, so I ask why the perverse denial of reality? Are you just afraid of the career consequences of ditching the liberal/conservative oppositional frame? Have you looked at the main campaign contributors (Big Finance! Wall Street!) to Obama, the Obama Democrats, and to the Republicans, both this year and in 2008? Why hasn’t that blown up your oppositional fantasy world?

What agenda are you selling, Mr. Chakrabortty? The myth that we have two parties, one of which is ‘for us’ and the other ‘right wing’? Sorry, but a President-Obama-led ‘fiscal cliff’ scare campaign is not the place to push that. The evidence emphatically contradicts your thesis. (Helpful hint: peddle that stuff over abortion or gay marriage.)

If you want the details of what the Obama Democrats have planned regarding the slope, listen to former Senate Majority Leader and Obama Democrat Tom Daschle:

“I don’t think there’s any question that entitlement reform will be a part of whatever new agreement is reached,” former Senate Majority Leader Tom Daschle (D-S.D.) said at an event here Thursday sponsored by the Institute for Healthcare Improvement. “I do think cost containment for Medicare and Medicaid will be a very important part of the discussion.”

And when it gets to the final minutes, Obama’s Treasury Secretary Tim Geithner will be ready to clang the debt limit alarm bells:

“Geithner’s role is going to be to ride shotgun on the debt limit and make sure that everybody is sufficiently alarmed about that,” said Robert Bixby, director of the Concord Coalition, a nonpartisan advocate for responsible fiscal policy. “And that would help bring a negotiation to a conclusion.”

Or, just read Glenn Greenwald.

Like you say, we’ve all been here before, this cliff b.s. is the same as the preceding — and wildly successful for big finance and the right — bipartisan/multipartisan scare campaigns, the ones we saw in fall 2008 in the U.S. and in the spring 2010 in Britain, when

Democratic debate was railroaded; the wrong economic policy was followed – and it was all done to avert a wildly inflated threat.

Though in all three cases, a “wrong” economic policy for almost all of society was and is right, great, from the perspective of the rich, Big Finance, big banks, and the neoliberal ideologues who control the major parties in both Britain and the U.S.

Finally, Aditya, another example, your incoherent conclusion:

I can only hope that America’s Democrats learn their lesson from the British experience. Because the right here owned the language and framed the debate.

Again, uh, the opposition between the Democrats and “the right.” What agenda are you serving with that lie?