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Obama won’t defend jobless benefits

12:11 pm in Uncategorized by fairleft

I first read about this on wsws.org and thought it might be Trotskyist exaggeration, but alas, President Obama really has told his flunkies that not extending jobless benefits is ‘okay’, which would make millions of workers destitute shortly after Christmas:

Senate Majority Whip Dick Durbin (D-Ill.) said that he hopes extended jobless benefits will be part of the budget deal, but Democrats are not at this point insisting on it.

“I don’t think we have reached that point where we say ‘this is it, take it or leave it,’ ” Durbin said on “ABC’s This Week.”

Durbin’s soft position echoes that of House Minority Leader Nancy Pelosi (D-Calif.) who appeared last week to say no deal would be possible without the extension of jobless benefits expiring Jan. 1, but then walked the ultimatum back.

As WSWS writes, by “the administration’s own figures, allowing the federally-funded extended benefit program to expire will end cash assistance for 1.3 million people immediately after the holidays and impact an additional 3.6 million people in the first half of 2014. … In prior recessions, emergency unemployment benefits, beyond the standard aid offered by the states, have never been terminated when unemployment remained at such high levels as those prevailing today.”

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We have a long-term economic crisis in the U.S., which began under George Bush Jr. but has never been solved by President Obama. Ignore the official unemployment rate, which disappears the vast numbers who’ve simply given up on finding a job. Long-term unemployment is 2.6 percent, which according to the Council of Economic Advisers is more than twice the percent at “any other time that we have allowed benefits” to expire.

Wsws is right calling this Obama move a “cruel and callous act.” We’ve seen quite a few of them.

And it’s a quick reality check for all of us regarding the guy who, a few days ago, called income inequality the “defining challenge of our time.” Yeah, right.

Richard Trumka, sounding like a toady or a whimp

3:54 pm in Uncategorized by fairleft

The AFL-CIO’s Richard Trumka and Glenn Greenwald both reacted to the appointment of Bill Daley as President Obama’s chief of staff, and the former could learn a helluva lot from the latter. Trumka’s statement doesn’t mention that Daley’s full-time job before being hired by Obama was ‘too big to fail’ bank lobbyist, or that he headed the Clinton administration charge for NAFTA and will likely try to do the same for the Korea Anti-Fair Trade Act (KAFTA). Heck, Trumka’s so whimpy he doesn’t even mention Daley’s name. Anyway, here’s the complete statement by a supposed leader of America’s workers:

Statement by AFL-CIO President Richard Trumka On White House Chief of Staff Appointment
January 06, 2011

The president is of course entitled to choose a chief of staff in whom he has complete confidence. Yet President Obama and his Administration will ultimately be judged by results — whether the economy recovers robustly and begins to generate good jobs on the scale needed to improve the lives of working people.

The president needs a chief of staff who will reach out to diverse constituencies and make sure that the voices of ordinary Americans are heard in the White House. We are hopeful that the new chief of staff’s priority is to achieve the strong economy that working people desperately need. This is the time for strong leadership from the White House to invest in America’s future, create millions of good jobs, safeguard our retirement security and health care, strengthen workers’ rights and the role of the unions, and reform our flawed trade policies to restore America’s place in the global economy.

In contrast, read Glenn Greenwald, who after hemming and hawing for a year or two has recently gotten himself pinpoint accurate on who Obama is:

Daley is a reflection, not a cause
By Glenn Greenwald
Friday, Jan 7, 2011 07:08 ET

Few things interest me less at this point than royal court personnel changes. I actually agree with the pro-Obama/Democratic-Party-loyal commentators who insist it doesn’t much matter who becomes White House Chief of Staff because it’s Obama who drives administration policy. Obama didn’t do what he did in the first two years because Rahm Emanuel was his Chief of Staff. That view has the causation reversed: he chose Emanuel for that position because that’s who Obama is. Similarly, installing JP Morgan’s Midwest Chairman, a Boeing director, and a long-time corporatist — Bill Daley — as a powerful underling replacing Emanuel isn’t going to substantively change anything Obama does. It’s just another reflection of the Obama presidency, its priorities and concerns, and its overarching allegiances.

Greenwald talks about Obama the way Labor and its supporters need to, as a hopeless cause at this point. As many as possible need to get that, so we then can move to the next step: how to effectively oppose the two-corporate-party system. Trumka has a fairly big megaphone, and could help lead many in that practical direction, and if he did so that alone would empower labor and scare the corporate owners of our political system. Otherwise, things will just get worse and worse.

One way in which they’ll get worse is in the ‘giant sucking sound of jobs leaving the country’ area. Here’s Laura Flanders on KAFTA:

Daley was Clinton’s NAFTA czar, charged with pushing through the free trade agreement past furious Labor voters and a reluctant Congress.

Now there’s a new trade deal, with Korea, hovering over Congress, and despite opposition from a trans-partisan coalition that runs from Rep. Ron Paul to Sen. Sherrod Brown, it looks like Obama’s turning to an expert to ram it through.

And what’ll that mean? The Economic Policy Institute estimates that the Korea deal will ship 159,000 jobs overseas. Who needs to beat up on unions, as we noted yesterday, when you can simply ship their jobs out from under them?

Finally, here the best brief summary of where we’re at, in a comment by karlmarx20 under the most recent blog post by Paul Krugman, the one showing the fell-off-cliff-in-2008-and-still-at-bottom civilian employment-population ratio:

I am an old man but if I was younger I would get out of the U.S. as soon as I can. The corporate and private deficit has mortgaged our future not the federal debt. It will take six to 10 years to deleverage to reasonable levels because of private indebtedness. Attacks on labor which brought us a 5 day work week and paid vacations. Militarization of the society, hollowing out of engineering and science and manufacturing, an income distribution rivaling Brasil which is a mark of shame there. We are now a third world country with a bloated military and nobody seems yet to notice.

No one in power seems even to be listening, much less doing anything to get us out of this ongoing economic and unemployment crisis. But hey, let’s start with what should be an easy one: Shouldn’t at least Richard Trumka, head of the AFL-CIO, sound like a fighter for the working men and women of this country? Instead, we get a big heaping full of whimp.

Deficit Terrorism – They’re Serious

9:00 am in Uncategorized by fairleft


This is a case of pain with no gain . . . indefinite sacrifice for the reward of lower living standards

They can’t be serious, but they are. Somehow the financiers and ‘the market’ have taken control of our politicians and the mainstream media, and are going to practice anti-deficit terrorism against their populations, here and in Europe, already hit by deep recession and mass unemployment. Taking Keynes and common sense and doing the opposite, where does it lead? Why do we have to find out?

Dean Baker:

. . . Even though the US and many eurozone countries are projected to be flirting with double-digit unemployment for years to come, their governments will be focused on cutting deficits rather than boosting the economy and creating jobs.

The outcome of this story is not pretty. [fairleft: You could've put that a little stronger, Dean] Cutting deficits means raising taxes and/or cutting spending. In either case, it means pulling money out of the economy at a time when it is already well below full employment. This can lower deficits, but it also means lower GDP and higher unemployment.

Read the rest of this entry →

Germany to boost spending €10 billion yearly, 2011-2016

12:34 pm in Uncategorized by fairleft

(Wish it were so source.)

Monday, May 24, 2010 – 03:42
Germany to boost spending €10 billion yearly, 2011-2016

PARIS (MNI) – The German government will embark on a fiscal prosperity program, increasing the federal budget €10 billion a year from 2011 to 2016 (or the return of full employment), the Financial Times reported Monday, citing unnamed government officials.

The measures, which will include spending increases, increased subsidies to states, and lower taxes, are intended to comply with Germany’s new constitutional law requiring that annual public deficits be no less than 0.35% of GDP during recessions. It is also meant to serve as an example to other Eurozone countries that Germany has repeatedly exhorted to boost deficits in order to outpace the EU’s 3%-of-GDP deficit requirement during periods of high unemployment.

Germany expects to run a deficit exceeding 5% of GDP this year, and hopes to increase it steadily afterward. The country is expected this year to have a record-high net borrowing requirement of €80 billion, which it also wants to increase beginning next year, unless unemployment declines significantly.

The magnitude of Germany’s planned increases are likely to be greeted warmly by fellow EMU members, who hoped that Germany would stimulate demand to provide breathing room for countries mired in recessions much deeper than Germany’s that cannot undertake economic growth efforts as robust as Germany can.

The coalition government of Germany’s Chancellor Angela Merkel had promised tax cuts and now will keep that promise, and won’t alter any tax exemptions that the government believes will boost employment.

The markets expressed displeasure over the announcement. Unnamed government officials responded that markets had best put an end to “counterproductive whining” or regulatory authorities would outlaw activities that are the source of most financial sector profits and market instability.

This episode of ‘wish it were the news’ in honor of and inspired by James Galbraith‘s exchange with Ezra Klein:

Ezra Klein: That does it for my questions, I think.

James Galbraith: I have one more answer, though! Since the 1790s, how often has the federal government not run a deficit? Six short periods, all leading to recession. Why? Because the government needs to run a deficit, it’s the only way to inject financial resources into the economy. If you’re not running a deficit, it’s draining the pockets of the private sector. I was at a meeting in Cambridge last month where the managing director of the IMF said he was against deficits but in favor of saving, but they’re exactly the same thing! A government deficit means more money in private pockets.

The way people suggest they can cut spending without cutting activity is completely fallacious. This is appalling in Europe right now. The Greeks are being asked to cut 10 percent from spending in a few years. And the assumption is that this won’t affect GDP. But of course it will! It will cut at least 10 percent! And so they won’t have the tax collections to fund the new lower level of spending. Spain was forced to make the same announcement yesterday. So the Eurozone is going down the tubes.

On the other hand, look at Japan. They’ve had enormous deficits ever since the crash in 1988. What’s been the interest rate on government bonds ever since? It’s zero! They’ve had no problem funding themselves. The best asset to own in Japan is cash, because the price level is falling. It gets you 4 percent return. . . .

It’s all sure to get much more painfully funny as the U.S. and the Eurozone march dutifully into economic hell.

Who ‘they’ are; where they’re taking us

4:41 pm in Uncategorized by fairleft

Thanks to the Daily Howler for pointing out the perfect portrait of the U.S. media/political elite, i.e., the ‘they’ that is the enemy of the rest of us:

NYT’s Mark Leibovich: On a recent Friday night, a couple hundred influentials gathered for a Mardi Gras-themed birthday party for Betsy Fischer, the executive producer of “Meet the Press.” Held at the Washington home of the lobbyist Jack Quinn, the party was a classic Suck-Up City affair in which everyone seemed to be congratulating one another on some recent story, book deal, show or haircut (and, by the way, your boss is doing a swell job, and maybe we could do an interview).

McAuliffe, the former Democratic National Committee chairman, arrived after the former Republican National Committee chairman Ed Gillespie left. Fox News’s Greta Van Susteren had David Axelrod pinned into a corner near a tower of cupcakes. In the basement, a very white, bipartisan Soul Train was getting down to hip-hop. David Gregory, the “Meet the Press” host, and Newsweek’s Jon Meacham gave speeches about Fischer. Over by the jambalaya, Alan Greenspan picked up some Mardi Gras beads and placed them around the neck of his wife, NBC’s Andrea Mitchell, who bristled and quickly removed them. . . .

Yes, that was former Fed Chief Alan Greespan, Ayn Randian most responsible for the deregulated crap storm we’re doomed to experience forever (i.e., until us average working people overthrow the neoliberal corporate-globalized market fundamentalists). And his wife, insider neo-journalist Andrea Mitchell.

And what are ‘they’ in an uproar about right now? No, not 10% official (near 17% unofficial) unemployment in the U.S. Nope, deficits; government deficits during a very deep recession when we desperately need economic stimulus have got elite knickers all in a twist:

NPR’s Mara Liasson: Washington is gearing up for a big debate: What to do about the exploding national debt, the unsustainable annual budget deficits and what to do about the Bush tax cuts that expire at the end of the year. . . .

"The arithmetic is, unfortunately, quite clear," [Greenspan's successor, Ben] Bernanke said. "To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above.

The Miami Herald: . . . the bipartisan National Commission on Fiscal Responsibility and Reform faces no easy task when it holds its first meeting on Tuesday, searching for a bipartisan consensus on ways to reduce the deficit to within 3 percent of the U.S. gross domestic product [yeah, the same stupid goal the European Union demands of its members; where do they come up with this crap?] by 2015.

Under Obama’s proposed budget, this year’s deficit is projected to reach $1.5 trillion, or 10.3 percent of the GDP, according to the nonpartisan Congressional Budget Office. It’s expected to decrease slightly to $1.3 trillion next year, or 8.9 percent of the GDP, and to 4 percent of the GDP by 2014. The CBO says it will resume rising again after that, however.

This kind of thinking followed through on is potentially catastrophic, both for recovery from the recession and for the last strongholds of the welfare state in the U.S., health care for the aged and Social Security. And yet, how can we resist St. Obama, Nobel Peace Prize winner, Bipartisan-in-Chief?

Marshall Auerback: President Obama has long decried our “out of control” government spending. He clearly gets this nonsense from the manic deficit terrorists who do not understand these accounting relationships that we’ve sketched out. As a result he continues to advocate that the government leads the charge by introducing austerity packages – just when the state of private demand is still stagnant or fragile. By perpetuating these myths, then, the President himself becomes part of the problem. . . .

Governments that issue debt in their own currency and do not promise to convert their currency into anything else can always “afford” to run deficits. Indeed, in this context government spending financially helps the private sector by injecting cash flows, providing liquid assets and raising the net worth of some or all private economic agents.

Unfortunately for Greece, Spain, and the other EU countries now and forever (or until us average working people yada yada . . .) victimized by global financial wealth suckers, they can’t issue debt in their own currency, having ceded that sovereignty for the borderless, deregulated, neoliberal dream.

So, okay, on the flip side what are the media/political elite celebrating now? That would be the recovery/’recovery’ of GM, which, responding to St. Obama demands that it cut wages and benefits and fire people in exchange for a government bailout – GM Bailout: Billions to Put People Out of Work – fired people and cut wages and benefits.

GM had 217,000 employees at the end of 2009, down 11 percent from the prior year.

Industry dropping wages and benefits and increasing unemployment, governments cutting deficits and the welfare state – the media elite celebrating the former and urging on or shouting TINA about the latter – how does all this produce anything except an ever-worsening spiral of economic misery?

I don’t know and they don’t care.

P.S.A good read, from the Irish front:

Who is shouldering the burden of the recession? The Irish Congress of Trade Unions has this month released a report which seeks to answer this question.

The report argues that at the heart of government policy is a ‘determination to load the full cost of the collapse onto working people and the poor.’

The consequence of this strategy, argues ICTU, ‘could turn Ireland into a social and economic wasteland for a decade or more.’

In support of their argument ICTU examine the impact of recent budgets on wages, social welfare and pensions. The report outlines the loss of real income experienced by workers and the unemployed while highlighting those sectors of society who are gaining from the recession.

In 2009 300 individuals held a person wealth of €50 billion. Despite this, the total tax take from these millionaires was just €73 million. In the same year the budget took €760 million from social welfare claimants in cuts.

In 2009 the share of national wealth going to wages fell by €5billion while profits from trade, farming and rents are expected to rise by €3 billion.

These figures, and the disparities they highlight argue ICTU, are the consequence of a government policy that is determined to lower the cost of labour. And there is more to come. . . .

Oh yeah, they have much more in store for us. Unless the average working people yada yada yada.

[ Photo-enhanced version of above at http://pffugeecamp.com/diary/726/who-they-are-where-theyre-taking-us and http://www.eurotrib.com/story/2010/4/28/193537/425 ]