Now that the academic and evidentiary support for austerity is shot full of holes, President Obama has an opportunity to perform a face-saving extrication from his position. Will he do it?

A recent study by a grad student at the University of Massachussets has pointed out critical errors in celebrated Harvard economists Carmen Reinhart and Ken Rogoff’s study which has been the much-cited intellectual underpinning of the austerity movement. In short R-R’s study showed a correlation between high levels of national debt (with a stated critical threshold point at 90% of GDP) and slow economic growth. The results of the study have been often stated as proof that debt at 90% GDP causes slow economic growth and that austerity measures must be employed to bring down debt.

Reinhart-Rogoff quickly achieved almost sacred status among self-proclaimed guardians of fiscal responsibility; their tipping-point claim was treated not as a disputed hypothesis but as unquestioned fact. For example, a Washington Post editorial earlier this year warned against any relaxation on the deficit front, because we are “dangerously near the 90 percent mark that economists regard as a threat to sustainable economic growth.” Notice the phrasing: “economists,” not “some economists,” let alone “some economists, vigorously disputed by other economists with equally good credentials,” which was the reality.

Many prominent economists had previously pointed out another major error in the way that the study has been used by those who favor austerity:

There were good reasons for not accepting the Reinhart and Rogoff results even before this error was uncovered, as many of us had argued. Most importantly there is a serious issue of the direction causation. Countries tend to have high debt levels because their economies are doing poorly.

Unfortunately, there was not much press notice of the causation problem in R-R’s study, probably because it’s the kind of story that the media find too difficult to explain. But when the grad student from the University of Massachussets discovered spreadsheet errors in their work, now there was an issue that our news media could latch onto with confidence that it was within their ability to explain it. Consequently it has gotten quite a bit of coverage and R-R’s study has been discredited.

Austerity has been a failure where it has been employed

At the same time, austerity plans that have been imposed in Britain and elsewhere in Europe haven’t been working for some time now and are a considerable failure:

While Europe’s leaders shy away from the word, the reality is that much of the EU is in depression.

The loss of output in Italy since the beginning of the crisis is as great as it was in the 1930s. The youth unemployment rate in Greece now exceeds 60%, and the figure for Spain is above 50%.

With the destruction of human capital, Europe’s social fabric is tearing, and its future is being thrown into jeopardy.

The economy’s doctors say that the patient must stay the course. Political leaders who suggest otherwise are labelled populists. The reality, though, is that the cure is not working, and there is no hope that it will – that is, without being worse than the disease.

It will take 10 years or more to recover the losses incurred in this austerity process.

Anyone still advocating austerity, with all of the available evidence militating against it as a course of continued action is selling something very much other than a program to create broadly shared prosperity.

It’s time for President Obama to step back from his austerity plans.

Obama’s austerity plans are tied to Reinhart and Rogoff’s work

In the Fall of 2009 President Obama supported an effort in Congress to form a fiscal responsibility commission. When Congress failed to form such a commission, President Obama formed one of his own. Obama’s Catfood Commission was somewhat unusual as government commissions tasked to develop policy go in that it was partially funded by Pete Peterson, a man who has spent half a billion dollars so far to promote austerity and destroy entitlements (i.e., our earned benefits). President Obama’s commission was clearly rigged to provide a particular result.

Despite the best laid plans careful preparations, the Catfood Commission ultimately failed to come to an agreement on a plan. This failure was largely ignored and the Commission chairs (Alan Simpson and Erskine Bowles) wrote their own plan which has been used by the administration as a basis for the imposition of austerity.

The Simpson-Bowles catfood plan has been fully embraced by the administration, and it is used as a yardstick for their “success” in implementing austerity:

These developments are poorly understood by those—most vocally, SB advocates—who continuously inveigh that we’re not “serious” about cutting spending. In fact, that’s the only thing we’ve been “serious” about so far, such that we’ve actually achieved 70% of the discretionary spending cuts called for in the SB budget plan.

The Simpson-Bowles plan is based on the underpinnings of Reinhart and Rogoff’s research and Erskine Bowles has repeatedly cited it:

Bowles has repeatedly cited the study by Carmen Reinhart and Kenneth Rogoff entitled “Growth in a Time of Debt” to support his calls for spending cuts.

Senate Republicans including Minority Leader Mitch McConnell (Ky.) and Jeff Sessions (Ala.) referenced it this week.

Many other leading austerity pushers have also cited it:

“It’s an excellent study, although in some ways what you’ve summarized understates the risks.”— Former US Treasury Secretary Tim Geithner.

“The debt hurts the economy already. The canonical work of Carmen Reinhart and Kenneth Rogoff and its successors carry a clear message: countries that have gross government debt in excess of 90% of Gross Domestic Product (GDP) are in the debt danger zone. Entering the zone means slower economic growth.”— Doug Holtz-Eakin, Chairman of the American Action Forum.

“Economists who have studied sovereign debt tell us that letting total debt rise above 90 percent of GDP creates a drag on economic growth and intensifies the risk of a debt-fueled economic crisis.” — House Budget Committee Chairman and former Republican vice-presidential candidate Paul Ryan.

So, here’s where you can see how far a half a billion dollars goes in purchasing public policy. Two Harvard academics write a paper which the media and highly-visible public intellectual economists all claim as purported evidence that austerity is sorely needed. The President of the United States creates a commission that is rigged to provide the result of support for the idea that austerity is sorely needed; the commission’s findings rely on the underpinnings of the the Harvard academics’ paper. In Congress major budget legislation is put forward with the claim that austerity is sorely needed; the author of the Congressional legislation and its supporters all cite the Harvard academics’ work as justification.

Guess who the two Harvard economists who wrote the paper that all of the people who are calling for austerity cite?

I’ll give you three guesses and the first two don’t count…

Yes, that’s right, “The Half-Billion Dollar Man,” Pete Peterson:

When Washington Post writer Suzy Khimm pointed out to Peterson that the U.S. built significant deficits during the financial crisis but maintained very low interest rates, Peterson responded that America still needed to be on high alert: “you know [Kenneth] Rogoff and [Carmen] Reinhart — I’ve talked to them, and they say [debt crises] are sudden, they’re sharp, they’re very substantial. The risk is simply too big. At some point, if we lurch from crisis to crisis, then confidence will decline on our economy in general.” …

Reinhart, described glowingly by the New York Times as “the most influential female economist in the world,” was a Senior Fellow at the Peterson Institute for International Economics founded, chaired, and funded by Peterson. Reinhart is listed as participating in many Peterson Institute events, such as their 2012 fiscal summit along with Paul Ryan, Alan Simpson, and Tim Geithner, and numerous other Peterson lectures and events available on YouTube. She is married to economist and author Vincent Reinhart, who does similar work for the American Enterprise Institute, also funded by the Peterson Foundation.

Kenneth Rogoff is listed on the Advisory Board of the Peterson Institute. The Peterson Institute bankrolled and published a 2011 Rogoff-Reinhart book-length collaboration, “A Decade of Debt,” where the authors apparently used the same flawed data to reach many of the same conclusions and warn ominously of a “debt burden” stretching into 2017 that “will weigh heavily on the public policy agenda of numerous advanced economies and global financial markets for some time to come.” (Note that not everyone associated with the Institute touts the Peterson party line.)

So, the circle of influence is complete. A web off deceit has been spun by wealthy. influential people who are able to apply massive amounts of money to academics, think tanks, the media and politicians and purchase public policy favorable to their interests.

Is President Obama a spider that weaves the web, or a bug that has been caught in it?

It’s hard to know whether Mr. Obama is leading the charge for austerity or following the direction of others. He has worked assiduously to impose austerity during his administration. Early on, he chose to “go small” with economic stimulus as recommended by Larry Summers rather than the stimulus, larger by a trillion dollars, $1.6 – $1.8 Trillion stimulus recommended by the chair of his Council of Economic advisors, Christina Romer. Obama’s stimulus program was criticized for it’s small size by many more progressive economists outside the administration at the time.

President Obama’s early commitment to austerity was also evident in his budgets. Despite his rhetoric about social investments and infrastructure rebuilding, President Obama’s budgets since he took office have all been austerity budgets. Of course, Obama’s support for “entitlement reform” a euphemism, like “strengthening” Social Security (by cutting the earned benefits of those that the program is supposed to be for. It has been reported that within the Obama administration, the political team and particularly David Plouffe, pushed for Obama to seek entitlement reform:

[Top Adviser David] Plouffe urged the president to give [entitlement reform] a shot. “I said he [Obama] should be big on entitlements,” Plouffe told one former administration official, by which he meant reining in these budgetary elephants. Sure, this would enrage the party’s base. But the political upside with the rest of the country would more than make up for it … “Plouffe is pretty big on accomplishments trump normal politics,” said one White House colleague. “Plouffe’s view is that big trumps the little.”

So, now here we are, the rationale for austerity is in tatters, the web of deceit is unravelling. President Obama’s actions now will show whether he is a spider who seeks to weave the web back together or a bug who, freed from the web, goes on to pursue a different path outside the web.

President Obama has done a brilliant job for the 1%

Under Mr. Obama’s leadership, after a tremendous, near utter collapse of the economy brought about by a corrupt finance sector, trillions of public dollars have been poured into the coffers of bankers. One recent study showed that the big banks got an annual government subsidy of $83 billion dollars a year – equal to the amount of their alleged profits. Hold onto your hats, another recent study, by Chris Whalen and endorsed by noted economist Nouriel Roubini demonstrates that the subsidy is much larger, at least $780 billion dollars a year:

$360 billion in Federal Reserve subsidies, by creating an artificial “spread” in interest rates

$120 billion in federal deposit insurance (through the FDIC, backed by the Treasury)

At least $100 billion in government-guaranteed loans, especially mortgages

At least $100 billion in monopolistic advantages in the secondary market for home mortgages

More than $100 billion in fees in the over-the-counter (OTC) derivative market. (The lack of capital required in these transactions and other special dispensations from the Fed provide the zombie banks with unlimited leverage and almost no public scrutiny.)

The first study indicates that the too big to fail banks are barely breaking even and they are getting fat and demanding on our largesse; the second study indicates that they are indeed not profitable at all. They are nothing but corporate welfare queens with a large budget to purchase politicians.

Those purchases of politicians have really paid off, not a single banker has gone to jail for creating the catalyzing event of the, “great recession,” and those politicians are working hard for the banksters to prevent regulations from taking effect.

The headline news is that the big banks appear to be solvent again (at least as long as nobody pokes around too much); the banking sector is pretty much back to business as usual, with large profits and great pay and bonus packages for the bankers.

In fact, Wall Street bonuses are up as jobs decline:

One upside to downsizing on Wall Street: Cash bonuses jumped 9% to nearly $121,900 last year.

Total bonuses rose 8% to $20 billion, according to New York state Comptroller Thomas DiNapoli. That’s a reversal from 2011, when bonuses fell 19%, to a revised tally of $18.5 billion. …

Wall Street profits in 2012 didn’t just rebound — they tripled.

So while Wall Street is riding a wave of prosperity, the 99% who pay for their prosperity are getting screwed. Surprise!

101 Million Working Age Americans Do Not Have Jobs

The Obama administration and the legislators are bending over backwards to make sure that the 1% are flush with cash, but doing little or nothing for the working people:

The jobs recovery is a complete and total myth. The percentage of the working age population in the United States that had a job in March 2013 was exactly the same as it was all the way back in March 2010. … [T]here are now more than 101 million working age Americans that do not have a job. But even though the employment level in the United States has consistently remained very low over the past three years, the Obama administration keeps telling us that unemployment is actually going down.

In fact, they tell us that the unemployment rate has declined from a peak of 10.0% all the way down to 7.6%. And they tell us that in March the unemployment rate fell by 0.1% even though only 88,000 jobs were added to the U.S. economy. But it takes at least 125,000 new jobs a month just to keep up with population growth. So how in the world are they coming up with these numbers? Well, the reality is that the entire decline in the unemployment rate over the past three years can be accounted for by the reduction in size of the labor force.

In other words, the Obama administration is getting unemployment to go down by pretending that millions upon millions of unemployed Americans simply do not want jobs anymore.

Anyone who can read a chart or a graph can see that actual unemployment has remained quite stable during Mr. Obama’s presidency:

For more complete information about how the Unemployment numbers are cooked, see my previous diary, “President Obama’s happy numbers and the reality-based community.”

Obama’s Brilliant Plans Benefit 1% Handsomely

Read the rest of this entry →

Does the term Progressive mean anything anymore?

Surely it has an historical meaning and there are some roundabout descriptions of modern progressivism online like this one from Wikipedia:

Today, members of the Green Party of the United States are most likely to self-identify as liberal progressives. In the U.S. Congress, the Congressional Progressive Caucus is the most liberal wing of the Democratic Party, and it is often in opposition to the more centrist or conservative Democrats who form the Blue Dogs caucus. It is also in near-continuous opposition to the Republican Party.

But what does it mean when say, the leader of the Democratic Party, President Obama proclaims himself a Progressive:

“I am someone who is no doubt progressive.”

… and then later proceeds to describe himself as a, “moderate Republican?”

“The truth of the matter is that my policies are so mainstream that if I had set the same policies that I had back in the 1980s, I would be considered a moderate Republican.”

Further, what does it mean when three quarters of the Congressional Progressive Caucus won’t stand up for the indispensable legacy of the progressive New Deal and Great Society advances, Social Security, Medicare and Medicaid?

Three-Quarters of Progressive Caucus Not Taking a Stand Against Cuts in Social Security, Medicare and Medicaid

For the social compact of the United States, most of the Congressional Progressive Caucus has gone missing.

While still on the caucus roster, three-quarters of the 70-member caucus seem lost in political smog. Those 54 members of the Progressive Caucus haven’t signed the current letter that makes a vital commitment: “we will vote against any and every cut to Medicare, Medicaid, or Social Security benefits — including raising the retirement age or cutting the cost of living adjustments that our constituents earned and need.”

… Addressed to President Obama, the letter has enabled members of Congress to take a historic stand: joining together in a public pledge not to vote for any cuts in Social Security, Medicare or Medicaid. …

The Progressive Caucus co-chairs, Raul Grijalva and Keith Ellison, signed the letter. So did Barbara Lee, the caucus whip. But no signer can be found among the five vice chairs of the Progressive Caucus: Judy Chu, David Cicilline, Michael Honda, Sheila Jackson-Lee and Jan Schakowsky. The letter’s current list of signers includes just 16 members of the Progressive Caucus (along with five other House signers who aren’t part of the caucus).

What about the other 54 members of the Progressive Caucus? Their absence from the letter is a clear message to the Obama White House, which has repeatedly declared its desire to cut the Social Security cost of living adjustment as well as Medicare. In effect, those 54 non-signers are signaling: Mr. President, we call ourselves “progressive” but we are unwilling to stick our necks out by challenging you in defense of Social Security, Medicare and Medicaid; we want some wiggle room that you can exploit.

Yes, that’s right the President, who has, “no doubt” that he’s a progressive wants to cut the social safety net, despite the fact that he made rather a big deal that he would not do just that thing:

Now, however, the, “no doubt progressive” President is about to release his budget, which will reportedly contain cuts to programs that have always been the core of progressive policy:

President Obama’s budget proposal to be unveiled next week will include cuts to Social Security and Medicare, according to media reports Friday morning.

Politico reports:

The most controversial element of Obama’s proposal is the inclusion of “chained CPI,” the adjustment that would over time reduce cost-of-living increases to Social Security and other federal benefit programs — effectively, a cut to Social Security benefits by tying them to inflation.

Progressives in the Media and the Blogosphere

So while many congressional “progressives” have chosen between their divided loyalties and come up as cowering yes men for the misguided juggernaut of the Obama administration, parts of the progressive media are spouting propaganda:

John Nichols tells only part of the truth in this piece and the failure to represent the whole truth makes it a specious bit of propaganda, that distracts and diverts attention away from those that are carrying out the agenda of the big money forces he decries.

[Perhaps this is a problem created by editing as Nichols is generally a reasonable guy, who has written a number of articles calling for opposition to President Obama's Chained CPI plan. This was a publication of The Nation magazine, so perhaps they edited it and it represents their editorial position more than Nichols' opinions and position. Since Nichols is the face, name and voice of this piece, however, the criticism will be directed at him and presumably if he gives a damn about what some blogger says, he can assert that the blame lays elsewhere.]

Nichols explains that in, as he puts it a, “Dollarocracy,” the ideas that get put forward are the ideas that have big money behind them, like cutting Social Security. He goes on to highlight the fact that austerity-loving-corporate-greedheads were able to get, “one of their own,” Paul Ryan on a ballot to run for Veep to push their plans. What Nichols fails to mention is that those austerity-loving-corporate-greedheads were going to win no matter what this election. They already have a Democratic president who is promoting their agenda on the other ticket. Guess what, they won! And there was no chance that they wouldn’t!

How is it that Nichols could have failed to notice and call out the Obama administration and the many Democrats that are performing the bidding of the, “Dollarocracy” with such alacrity these days? Nichols is an experienced pundit, he certainly has been around and allegedly paying attention long enough to know who has been pushing the 1%’s, “Dollarocracy” agenda.

Let’s take a trip through some of the evidence that one would have to ignore to create that Dollarocracy video with such a glaring omission in it…

Obama and the “Dollarocracy”

Perhaps some pundits might have missed what Barack Obama said when he was auditioning for the 1% back in 2006. Obama’s comments in 2006 show his willingness to upend the progressive orthodoxy regarding New Deal programs, which must have surely been music to our economic overlords’ ears. In a speech at the inaugural event of the Hamilton Project, Obama said:

“For those on the left, and I include myself in that category, too many of us have been interested in defending programs the way they were written in 1938,
believing that if we admit the need to modernize these programs to fit changing times, then the other side will use those acknowledgements to destroy them altogether.”

Someone declaiming against the, “Dollarocracy” certainly needs to understand the part that groups like the Hamilton Project play in perpetuating this, “Dollarocracy.” Some pundits were paying attention:

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=4783#.UT0ZRDd2T4w

Here’s the key part of that video:

“So now let’s move to 2006, and a new group is formed as part of this constellation of moving the Democratic Party to the corporate right, and it’s a group called the Alexander Hamilton Project of the Brookings Institution. And the director of it is Robert Rubin, who had been the Treasury Secretary for Clinton, had been at Goldman Sachs and, later, Citigroup. Roger Altman had been US Treasury Department under Clinton. And there’s an amazing thing. And this group is set up for budget deficit, international trade, taking on the teachers union, and they had their founding meeting in April 2006. And only one US senator shows up to speak at this founding meeting, and that’s a very new senator, Barack Obama from Illinois, who’s only been in Washington a little over a year. So for a lot of us who were tracking Obama in 2007, of course he got a lot of $25 and $50 donations from people that really wanted change they could believe in, but in 2007, way before he was a front-runner, he was out-fundraising all the other candidates from Wall Street. And it was something I’ve never quite been able to figure out. There were two presidential candidates from the state of New York, Rudy Giuliani and Hillary Clinton, and Obama was out-fundraising them from Wall Street early in ’07. Now, Wall Street money and corporate money always goes to the front-runner. Obama was getting this money before he was the front-runner. So the missing piece to the puzzle is this clip where Obama is the only senator who shows up at the Alexander Hamilton Project.”

So, let’s say that a pundit entirely missed what other progressive pundits were picking up on, that Obama was a, “Dollarocracy” candidate. Let’s say they were completely bamboozled during the 2008 presidential race by Obama’s assurances that he was, “no doubt” a progressive and rhetoric like this about Social Security:

“Social Security is not in crisis; it is a fundamentally sound system, but it does have a problem, long-term. We’ve got 78 million baby boomers, who are going to be retiring over the next couple of decades. That means more retirees, fewer workers to support those retirees. We are going to have to do something about it. The best idea is to lift the cap on the payroll tax, potentially exempting middle-class folks, but making sure that the wealthy are paying more of their fair share, a little bit more.”

Let’s say the pundit was lulled into a false sense of security by Obama’s rhetoric and he failed to pay attention on the times when Obama followed up his statement with disclaimers like, “everything has to be on the table.”

Stephanopoulos: You’ve also said with social security “everything should be on the table.” Raising the retirement age …

Obama: Everything should be on the table

Stepanopoulos: Raising payroll taxes…

Obama: Everything should be on the table. I think that we should approach it the same way that Tip O’Neal and Ronald Reagan did in 1983. They came together … I don’t want to lay out my preferences beforehand, but what I know is that social security is solvable. It is not as difficult a problem as we’re gonna have with Medicaid and Medicare.

Well goodness, that was a dead giveaway that Obama is willing to put the, “Dollarocracy’s” agenda on the table and make concessions right there during the 2008 campaign.

Speaking of the, “Dollarocracy’s” agenda, once Mr. Obama took office, the budgets that he submitted were those of the, “Dollarocracy”:

The surprising truth is that from the start of his presidency Mr Obama has planned a steep decrease in discretionary spending as a share of national income.

Each year he has put a budget on the table. Each year that budget has called for a sharp decline in discretionary spending as a share of gross domestic product in 2012 and later years. His rhetoric about increasing public investments in America’s future has always been contrary to the budgets he has presented, though most of his supporters have been unaware of this contradiction.

The administration is now vigorously blaming the Republicans for the pending cuts. Yet the level of spending for fiscal year 2013 under the sequestration will be nearly the same as Mr Obama called for in the draft budget he presented in mid-2012. … Mr Obama’s supporters will be very puzzled – many will doubt the basic fact that these cuts have long been ordained by the president, at least in general terms, though not exactly as they will now occur. Why would a progressive president plan for deep cuts in discretionary spending relative to GDP even as he advocates larger investments in health, education, infrastructure, clean energy, science and technology, job training, early childhood development and more?

Why indeed. Could it be that Mr. Obama is a moderate Republican? Or is it just his 11th dimensional chess move to get Republicans to raise taxes if he unilaterally reduces spending so that it chokes off all of the progressive programs and advances?

No doubt, whoever is responsible for the omissions of fact in the, “Dollarocracy” video missed that too.

Surely though, nobody who is paying attention could have missed notice of the “Catfood Commission?” It was hard to miss the fact that the commission was stacked to provide a particular outcome, ie., the recommendation of cuts to entitlements. After all, how many government commissions allow outsiders with an agenda, like Peter G. Peterson to provide paid staffers?

How could anybody whose job it is to follow American politics miss the close ties between Obama and the one man in America that virtually defines the term he is introducing, “Dollarocracy?” Peterson has spent a half a billion dollars of his personal fortune over the years to assure that his zombie ideas continue to reverberate in the press, think tanks and the halls of government.

A lot of, “progressives” were in denial thinking that these powerful indications of Obama’s fealty to the, “Dollarocracy” agenda was just a clever negotiating trick, “11th dimensional chess.” This bamboozlement persisted even when there was a document leak and it was revealed that Obama had put Social Security, Medicare and even veteran’s Tricare on the table for cuts in, “negotiations” with Republicans.

It would seem almost unforgivable if someone who was paying attention missed the recent comments of Gene Sperling, one of Obama’s chief economic advisers, when he said straight out that regardless of anything else, Obama prefers to implement cuts to the old, infirm, poor and unemployed through Chained (or as they’re now calling it, “superlative”) CPI.

Gene Sperling said today on his Reddit chat that the president really prefers the Chained-CPI and that it’s not just an inducement to get the Republicans on board with the Grand Bargain. This may sound obvious, since it’s been clear from before the inauguration that the administration wants to “reform” the so-called entitlements. But Sperling made it clear today that they believe in this on the merits:

The cost of living question relates to how the government measures inflation. Today, we use a measure of inflation called the “CPI” or consumer price index. An alternative would be to switch to what is known as the superlative or “chained” CPI. The superlative CPI makes two technical corrections to the standard CPI: it accounts for consumers’ ability to substitute between goods in response to changes in relative prices and accounts for biases arising from small samples. Most experts agree that the Superlative CPI provides a more accurate measure of the average change in the cost of living than the standard CPI.

The President would prefer to have this adjustment in the context of a larger Social Security reform, but he has said to Speaker Boehner that if it is part of a larger agreement that would include tax reform that would raise revenue by cutting loopholes and expenditures from the most well off, that he would be willing to agree to it because in divided government, if we’re going to make progress, we have to be willing to compromise. One important note: any agreement to make this change to the CPI must include a dedication of a portion of the savings to protections for low-income Americans, certain veterans, and older Social Security beneficiaries. Our current offer which reduces the deficit by $230 billion over the next 10 years includes those protections.

As Gaius Publius rhetorically asked:

Why do low-income Americans, veterans, and the elderly need “protection” from something that’s desirable, “preferable,” and nothing more than an “more accurate measure”?

It must have been getting really hard for whoever is responsible for Nichols’ video to avoid the fact that Obama was working so assiduously for the, “Dollarocracy,” by the time that he published his commentary. About the time of its publishing, other pundits had put the pieces together about who was working for the, “Dollarocracy.”

Check out noted economist Jamie Galbrith’s contemporaneous commentary for contrast and comparison:

[The] reality has been evident for a while, thanks to the President’s pattern of giving way to banks, lobbies, Republicans and right-wing extremists. Whether your prime interest is housing, health care, peace, justice, jobs or climate change, if you are an activist in America you have known for a long time that this President is not your friend.

Still, even on these shores disillusion often took a mildly forgiving form. The President was a “disappointment.” He was weak. He had “bad negotiating skills.” He had a tendency to “deal with hostage-takers,” to “surrender.” All of this fed the image of a man with a noble spirit, a good heart, the best intentions, but trapped by limited ability and the relentless and reckless determination of his foes.

Obama is no progressive

The debt deal will make things clear. The President is not a progressive – he is not what Americans still call a “liberal.” He is a willful player in an epic drama of faux-politics, an operative for the money power, whose job is to neutralize the left with fear and distraction and then to pivot rightward and deliver a conservative result.

What Barack Obama got from the debt deal was exactly what his sponsors have wanted: a long-term lock-in of domestic spending cuts, and a path toward severe cuts in the core New Deal and Great Society insurance programs – Social Security, Medicare and Medicaid. And, of course, no tax increases at all.

How could Nichols’ video featuring a progressive leaning pundit produced and published by a progressive leaning media outlet have such a well-developed blind spot? Is it denial or something else?

Kill the Zombie!

There is a phenomenon that one sees all over the progressive media and blogosphere; diatribes are spouted against Republicans in order to obfuscate the culpability of Democrats for the creation, sale and implementation of bad policy. When Democrats are called out by actual rather than acting progressives, elaborate excuses are forwarded along with appeals to be quiet lest the evil Republicans get a leg up electorally.

This phenomenon is at it’s height during election cycles, which is a shame because it is precisely during election cycles that activist leverage is at its zenith. During election cycles, all over the progressive blogosphere, activists are “shushed.” When they attempt to raise voices to press for real progressive commitments from politicians, they are warned about the spectre of, “Nader.” (Because the 24,000 Florida Democrats who voted for Nader are responsible for Gore’s 2000 loss, not the 308,000 Florida Democrats who voted for Bush, nevermind the fact that in 2000, only nine votes in Washington DC actually counted.) During elections progressive writers, pundits and commentators in progressive media outlets also blunt their criticisms, and rather than pressing for change, meekly toe the party line – presumably in hopes that their quiet acquiescence to party will result in a few bones being tossed their way.

Well, that plan hasn’t worked. Obama and many Conservadems are working hard to undermine the New Deal, formerly the sole project of right-wing loonies, though under the clever rhetorical guise of “saving” it. If there is such a thing as the progressive movement, it will have to get its act together and raise some hell or face the loss of its legacy and any sense of the utility that their advances have offered the public.

It is anticipated that there will be blowback from the usual suspects. As Digby put it in a recent post about Obama’s terrible budget proposal:

Meanwhile prepare for a barrage of savvy, world weary commentary from your fellow liberals telling you that this is no big thing and that Democrats will not suffer even a tiny bit if they vote for a common sense proposal like this one. You will be shushed and told to calm down and take a chill pill. In other words, you will be gaslighted by fellow liberals who are embarrassed that you aren’t being coolly accepting of something that is completely unacceptable. This is how this works. Tell them to STFU and move out of the way.

So, contact your legislators and let them know in no uncertain terms where you stand.

Strengthen – example 1.)As a seventh grader, Victor Alcantara towered over his peers. Already six feet tall and a substantial 190 pounds, Victor was well prepared by nature for what gave him the greatest pleasure – being a thug. Victor was not driven by circumstances into his chosen career field. He had an unremarkable but perfectly serviceable intellect.

His father was a University professor and his mother was a lawyer. That Victor lacked their passion for academic acheivement was something of an irritant to them as were the frequent calls from school administrators and the irate parents of Victor’s victims.

Victor had wisely chosen to form a strategic partnership with the next largest boy in seventh grade, Mark Ballis, who had been held back a couple of times making him the oldest seventh grader in the entire school system. Mark was neither tremendously bright nor capable, but generally not a bad sort of kid and Victor had decided that he needed something of a life remake. As part of Victor’s remake, he had renamed him, “Spike” and had had spent considerable effort on tutoring him as to how to comport himself with a certain thuggish silence and an attitude of cool equanimity. Spike became a perfect henchman.

Victor and Spike, while often scheming greater exploits mostly engaged in classic bullying, shaking down kids in the halls and at recess for their lunch money. Victor’s instincts led him to choose the social misfits, the nerds and the fat kids as his victims, steering clear of the popular kids.

One day, Victor and Spike had cornered a recently arrived fat kid on the playground. Victor got close up to the kid so that he had to look up at him at a sharp angle and pressed his demand. “You kind of bother me looking like that, I think that you should give my associate here Spike your lunch money.”

Normally, the implied threat of violence and the innate desire to flee caused most kids to hurriedly comply with Victor’s demands, but this kid did not seem to be in any hurry to comply. Victor leaned closer as the kid asked him, “What do you need it for?”

Nobody had ever asked Victor a question that went to the purpose of his enterprise before and he didn’t have a quick answer ready. His brain raced as he stalled for time. He fixed his portly interlocutor with an angry stare, the kind he had practiced in the mirror hundreds of times, but the kid just stood there, relaxed and expectant.

Then, from somewhere, Victor knew not where, the words came to him and he delivered them with a patient, but subtly insistent tone. “This isn’t about our needs. This is about you. You need to lose some weight and toughen up a bit. We will strengthen your ability to help yourself by removing one of the causes of your problem. Now, are you going to hand over the money or do we have to work harder to strengthen you?”

Victor, now an old man sitting in his favorite chair, reflected that this was the turning point in his life where he transitioned from being a mere thug to becoming a politician.

Strengthen – example 2.)

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Cliffsmas is coming and I bet you, like most of us, have not figured out just what it is that you are going to wind up giving the 1% this time around. Fortunately, they want to make it easy for you, they have made a list of their wants and checked it several times now.

Many on Wall Street with the help of nice people like Paul Ryan and a group of Democrats that call themselves “The Third Way,” working with President Obama would like to give your Social Security to the 1% to use as gambling chips on Wall Street.

Then there are the CEO’s from Peter Peterson’s “Fix the Debt Commission,” who want 134 Billion dollars in tax cuts exempting foreign earnings for corporations (along with their usual trillions in federal war contracts, subsidies, bailouts and tax loopholes) for Cliffsmas.

In fact, these Fix the Debt Commission CEO’s are so eager to get this cutting of costs for people other than themselves who want to retire, that less than 60% of their companies offer pensions for their employees and of the ones that do, the CEO’s have underfunded their employee pension funds by more than $100 billion.

There are a bunch of other 1%ers that would prefer the Bowles-Simpson approach of gutting your Social Security payouts over a period of years as President Obama was pushing on the campaign trail and in negotiations with Congressional Republicans over a long period. In these same negotiations Mr. Obama put cuts to health care for veterans and cuts to Medicare on the table.

The cuts to your benefits that Mr. Obama and the Austerians are promoting for Cliffsmas are far from chump change. The chained-cpi cut is small at first, but over a period of years is a 9% cut in benefits over a period of years. Raising the age of eligibility for retirement age to 70 would cut benefits for the average retiree by 19 percent or about $35,419.
Why what Obama is negotiating won’t “strengthen” Social Security
 

Executive summary – It’s the income inequality, stupid!
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It’s 2020, and unless Mr. Obama has successfully declared himself President-for-life, somebody else is President. Perhaps this time the lesser evil has lost. Thanks to the groundwork laid by President Obama and the boys at DARPA, the new president has the sort of technology that dystopian fiction is based upon.

In 2020 the president has at his disposal the drone technology to surveil anyone, anywhere on earth. The technology has the visual resolution to see disturbed dirt from a mile high in the sky and track footprints, to identify individuals using biometric data, even to “see” through walls and ceilings. Drones will also be outfitted with the means to collect electronic communications, phone calls, texts, gps location data, etc., creating a tool that can track individuals in the physical realm as well as their “footprints” in cyberspace to deliver the information needed for lethal actions

In 2020 the Earth will be surrounded by a triple canopy of drones at various heights to surveil us and deliver sudden death and destruction from above, wherever on earth or space the president desires:

At the lowest tier of this emerging U.S. aerospace shield, within striking distance of Earth in the lower stratosphere, the Pentagon is building an armada of 99 Global Hawk drones equipped with high-resolution cameras capable of surveilling all terrain within a 100-mile radius, electronic sensors to intercept communications, efficient engines for continuous 24-hour flights, and eventually Triple Terminator missiles to destroy targets below.

By late 2011, the Air Force and the CIA had already ringed the Eurasian land mass with a network of 60 bases for drones armed with Hellfire missiles and GBU-30 bombs, allowing air strikes against targets just about anywhere in Europe, Africa, or Asia. … If things go according to plan, in this same lower tier at altitudes up to 12 miles unmanned aircraft such as the “Vulture,” with solar panels covering its massive 400-foot wingspan, will be patrolling the globe ceaselessly for up to five years at a time with sensors for “unblinking” surveillance, and possibly missiles for lethal strikes. …

For the next tier above the Earth, in the upper stratosphere, DARPA and the Air Force are collaborating in the development of the Falcon Hypersonic Cruise Vehicle. Flying at an altitude of 20 miles, it is expected to “deliver 12,000 pounds of payload at a distance of 9,000 nautical miles from the continental United States in less than two hours.” …

At the outer level of this triple-tier aerospace canopy, the age of space warfare dawned in April 2010 when the Pentagon quietly launched the X-37B space drone, an unmanned craft just 29 feet long, into an orbit 250 miles above the Earth.

By the time its second prototype landed at Vandenberg Air Force Base in June 2012 after a 15-month flight, this classified mission represented a successful test of “robotically controlled reusable spacecraft” and established the viability of unmanned space drones in the exosphere.

This drone technology, which is well on its way now, will vest in the president and his minions a great deal of very concentrated power to breach individual privacy and security. How this power is held will have great implications for its ability to corrupt, or perhaps as Lord Acton would have put it, to corrupt absolutely. Our machines are extensions of ourselves. They implement our will (at least when we write competent programming). The issue is inequality; the machines that belong to the already powerful are so much more effective than the machines of we regular slobs and the potential for expanding the inequality of power that exists between the regular folks and the privileged elites is daunting.

Are we governed by Angels?

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There is compelling evidence that last year Nobel Peace Prize winner President Obama murdered an American teenager just two weeks after murdering his father and another American citizen in Yemen. The same action that resulted in the death of the boy also caused the wanton slaughter of the boy’s Yemeni cousin and an unspecified number of their friends. The boy was just 16 years old when he was killed in Yemen.

He was the son of Anwar al-Awlaki, who was alleged to have joined a foreign military and taken up arms against the United States. I say alleged because it is our tradition in America not to assign guilt to an individual until they have been proven guilty. Many things were alleged about Anwar al-Awlaki, but no court or jury – the people who are the “finders of fact” in our system affirmed the President’s allegations as facts before the President executed al-Awlaki.

When [Anwar al-Awlaki] was killed, on September 30, 2011, President Obama made a speech about it; a few months later, when the Obama administraton’s public-relations campaign about its embrace of what has come to be called “targeted killing” reached its climax in a front-page story in the New York Times that presented the President of the United States as the last word in deciding who lives and who dies, he was quoted as saying that the decision to put Anwar al-Awlaki on the kill list — and then to kill him — was “an easy one.”

But Abdulrahman al-Awlaki wasn’t on an American kill list. Nor was he a member of Al-Qaeda in the Arabian Peninusla. Nor was he “an inspiration,” as his father styled himself, for those determined to draw American blood; nor had he gone “operational,” as American authorities said his father had, in drawing up plots against Americans and American interests.

President Obama, while seemingly quite eager to discuss the death of Anwar Al-Awlaki, refuses at the same time to confirm or deny the existence of the CIA drone program which performs extrajudicial executions by hellfire missile at the President’s request and senior administration officials discuss and leak information about when it is politically advantageous.

Last week, a close associate of President Obama’s since he began working for then Senator Obama in 2004, was the communications director for Obama’s 2008 presidential campaign, President Obama’s White House Press Secretary and is now a senior campaign adviser for the Obama 2012 campaign discussed President Obama’s reasons for murdering the 16 year old Al-Awlaki:

Gibbs says, “I would suggest that you should have a far more responsible father if they are truly concerned about the well being of their children. I don’t think becoming an al Qaeda jihadist terrorist is the best way to go about doing your business.”

Gibbs is far from the only person to describe the use of the drone program with a crass insensitivity bordering on sociopathy. Here’s Obama’s counterterrorism adviser, Bruce Riedel:

“The problem with the drone is it’s like your lawn mower. You’ve got to mow the lawn all the time. The minute you stop mowing, the grass is going to grow back.”

Then there’s this anonymous military official that Micah Zenko quotes:

Recently, I spoke to a military official with extensive and wide-ranging experience in the special operations world, and who has had direct exposure to the targeted killing program. To emphasize how easy targeted killings by special operations forces or drones has become, this official flicked his hand back over and over, stating: ‘It really is like swatting flies. We can do it forever easily and you feel nothing. But how often do you really think about killing a fly?’

L’Etat, c’est moi
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I was recently asked by a friend to contribute to a sort of compact reference on fracking (you can see the product here). As I was working on the section on the economics of fracking, it struck me that what is wrong with the economics of fracking is what is wrong with our whole energy economy; the incentives are set up to create a perverse outcome.

Because the environmental costs of fracking (and pretty much all extractive energy industries) are externalized, or perhaps “socialized” would be an easier term here, and the profits are privatized, the appearance of a very profitable industry is based upon false economic information. The creation of these incentives to extract fossil energy with little regard to the environmental consequences (and sometimes even common sense) has vested enormous economic power in the hands of people who use that money to purchase political power. They then perpetuate those same incentives over the objections of those who for years, Cassandra-like, point out that their continued activity is rendering our environment inhospitable to human life. As an article in the Independent from 2006 “Disappearing world: Global warming claims tropical island,” chronicles:

Rising seas, caused by global warming, have for the first time washed an inhabited island off the face of the Earth. The obliteration of Lohachara island, in India’s part of the Sundarbans where the Ganges and the Brahmaputra rivers empty into the Bay of Bengal, marks the moment when one of the most apocalyptic predictions of environmentalists and climate scientists has started coming true.

As the seas continue to swell, they will swallow whole island nations, from the Maldives to the Marshall Islands, inundate vast areas of countries from Bangladesh to Egypt, and submerge parts of scores of coastal cities.

At the time of this writing, it is six years since what would seem to be a pretty poignant wake-up call, yet governments and corporate elites have done little or nothing to alter course. In the case of energy corporations, they are rushing in to exploit the new accessibility of resources that were previously locked in by ice with the eager assistance of President Obama:

Shortly before Thanksgiving in 2010, the leaders of the commission President Obama had appointed to investigate the Deepwater Horizon oil spill in the Gulf of Mexico sat down in the Oval Office to brief him.

After listening to their findings about the BP accident and the safety of deepwater drilling, the president abruptly changed the subject.

“Where are you coming out on the offshore Arctic?” he asked.

William K. Reilly, a former chief of the Environmental Protection Agency and a commission co-chairman, was startled, as was Carol M. Browner, the president’?s top adviser at the time on energy and climate change. Although a proposal by Shell to drill in the Arctic had been a source of dissension, it was not a major focus of the panel’s work. …

The president’?s preoccupation with the Arctic proposal, even as the nation was still reeling from the BP spill, was the first hint that Shell’?s audacious plan to drill in waters previously considered untouchable had gone from improbable to inevitable.

Other nations are rushing to firm up their military arrangements in the arctic, undoubtedly to protect their oil industries claims. Not to be outdone by the energy sector in finding new ways to profit from climate change, financial sector geeks are developing strategies to profit from the scarcities caused by droughts and other climate disasters.

Our elected officials meantime have more or less ignored the most recent global negotiations to reduce carbon emissions continuing a pattern of derailing and undermining global climate change initiatives:

In each successive climate talk, the United States has acted to stall the process, defang the agreements, undermine the international community, and endanger the current and future people of the world.

Here is grassroots campaign 350.org’s founder Bill McKibben on why “Copenhagen failed spectacularly“:

“Neither China nor the United States, which between them are responsible for 40 percent of global carbon emissions, was prepared to offer dramatic concessions, and so the conference drifted aimlessly for two weeks until world leaders jetted in for the final day. Amid considerable chaos, President Obama took the lead in drafting a face-saving ‘Copenhagen Accord’ that fooled very few. Its purely voluntary agreements committed no one to anything, and even if countries signaled their intentions to cut carbon emissions, there was no enforcement mechanism.”

In Durban, the United States refused to agree to action to take place soon, instead pushing for implementation of an agreement in 2020, which Jamie Henn, McKibben’s associate, wrote, “isn’t just a delay, it’s a death sentence.” Wrote Henn of the United States’ posture in Durban, “the only thing the U.S. brought to the table was a wrecking ball.”

President Obama has steadily undermined international efforts to confront the gravest global concern, lied about it, distracted from it and gotten away with it.

In place of making real progress on global warming, they pursue both intensified oil drilling and “alternative” extractive energies like fracked natural gas and oxymorons like “clean coal.” Any honest person who has any familiarity with coal can tell you that there is no such thing as clean coal.