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Dear Mr. Speaker!

4:46 pm in Uncategorized by Donald Goldmacher

This entry was written by HEIST co-director/co-producer Frances Causey.

In opening the 113th Congress last Thursday House Speaker John Boehner declared that debt is imperiling the American Dream. This is the kind of intentionally misleading narrative Republicans, in collusion with corporate America and conservative think tanks, have spent 40 years and billions of dollars developing. Unfortunately, the old adage rings true that if you repeat a lie enough it becomes fact.

First, Speaker Boehner you are a bit confused about debt. And so are you Mr. President. Debt is not stealing the American Dream. Corporate America and its political collusion with Democrats and Republicans are. But lets cut to the political-economic quick America, we have one political party-the corporate party.

Look to any primer on debt provided by progressive economists like Dean Baker who predicted our economic collapse. According to Baker, the housing collapse, brought on by reckless Wall St. financial scams (think sub-prime mortgage and collateralized mortgage backed bonds), sank the world economy –and the steps that government took to counter all of this—created the preponderance of our debt. According to Baker this is indisputable. Many other economists like Robert Kuttner also echo this.

In 2007 the budget deficit was just 1.2 percent of gross domestic product output, a very reasonable amount. According to the Congressional Budget Office, this year’s deficit will measure 7.3% of GDP. So the increase in the public debt since 2007 can be squarely placed at the foot of Wall Street. Financial corporations (Countrywide, etc.) peddled “debt” to those who could least afford it, those who yearned for their slice of the American Dream-owning a home. Even former Treasury Secretary Hank Paulson admitted in a 2009 Vanity Fair article that he and his Wall Street cohorts said housing would continue to go up in value. But Conservatives love to blame the victims as part of their narrative in order to rally their base, which conveniently believes that personal debt caused our current troubles. Nothing could be further from the truth. Just ask Senator Elizabeth Warren who studied this extensively while at Harvard. I think it’s more plausible to blame those at the top of the pyramid who knew exactly what they were doing.

But tell that to Speaker Boehner and the “fix the debt” Corporate CEO’s who apparently were inspired by the guy who got us into this mess in the first place- Alan Greenspan! So instead of fixing the roots of the problem, which is corporate control of politics and the economy, these corporate acolytes want to instead swoop in and fix (in the coming negotiations over extending the debt ceiling) what ain’t broke, which is Social Security and Medicare!

In his speech Speaker Boehner said that if we “free ourselves from our debt“ (read that: reduce the social safety net) our economy will be set free and jobs will come home. Oh the hypocrisy! You know as well as anyone, Mr. Speaker, that most manufacturing jobs are not coming back to America.

Jobs are leaving America because you, at the behest of the corporations, passed laws that made exporting jobs incredibly profitable. Those laws are enabling 70 U.S. based corporations to not pay taxes on over 1.2 TRILLION in profits around the world.

In his remarks, Speaker Boehner cites that debt is “draining free enterprise”. Corporate profits have never been higher, but nor has inequality, a fact you will never hear from the Speaker. Work no longer pays in America. The game is fundamentally rigged and ordinary people who do everything right, who play by rules, still end up with the short end of the stick.

But make no mistake, the corporate party knows there is plenty of prosperity in America-it’s in the hands of the 1%. Investors all over the world are plowing into U.S. Treasury bonds, signaling a federal government nowhere near default. CEO’s know this, politicians know this and Wall Street investors know this but the media doesn’t, or at least doesn’t understand or acknowledge it, and therefore most Americans don’t either. I call it media free of fact.

But the reality Mr. Speaker, one that working Americans feel in their guts everyday, is that since the great collapse- created by corporate domination of our political economy-trillions in housing wealth has been lost, millions of families lost their homes to foreclosure, many millions more are underwater, millions remain out of work and over 46 million Americans live poverty. But you and your colleagues continue to play political games at the public’s expense and pander to the corporate elite who elected you. You can change that, by overseeing a government that represents ALL OF US, not just its profit at any cost corporations.

This entry is also available at Daily Kos.

What Would FDR Do?

2:17 pm in Uncategorized by Donald Goldmacher

Written by HEIST co-director/co-producer Frances Causey.

History has proven time and time again that the United States has prospered the most when capital and labor work hand in hand with each other. When they don’t, you get the likes of Michigan, Wisconsin, Hostess and Wal-Mart. Henry Ford understood that he needed to pay his workers well or who else would buy his automobiles? Pretty logical, huh?

Today, the balance of power between workers and capital has been obliterated with a tiny few elites making off like bandits as we have illustrated in Heist. The 1 percent has captured 93 percent of income growth since the alleged recovery of the economy. (This page asks, how can this truly be a recovery when only 1 percent of the population benefits?)

The tragedy is that our own lawmakers have allowed American corporations and the super rich to makeover government to suit their own whims. Don’t be deceived. American corporations have abandoned America for emerging markets, dispensing with loyalty as easily as they would an unprofitable manufacturing sector. Corporate media consolidation has sold this bill of goods (free market mysticism) to the American people as patriotic.

There is a fascinating yet depressing book entitled At Any Cost: Jack Welch, General Electric, and the Pursuit of Profit that illustrates just what has gone wrong with corporate America. Jack Welch maximized shareholder value by turning one of America’s most enterprising companies, GE, into a mercenary financial monolith that was eventually bailed out to the tune of $140 billion dollars by U.S. taxpayers.

Tens of thousands of GE jobs were (are) being outsourced at the exact moment the American people were bailing the company out! Then in the cruelest irony of all, President Obama appointed GE’s CEO Jeffrey Immelt to run his Presidential Council on Jobs and Competitiveness!

When an American corporation benefits greatly from being American (favorable tax law, use of U.S. infrastructure, protection of U.S. embassies abroad, favorable trade deals et al), it is the duty of our lawmakers who allegedly represent us to hold these companies accountable to America and her workers. We are not naïve as we understand that capital flows to the highest return but everything must have rules. The 1 percent has made their own rules and 99 percent of us are paying the price.

If FDR were president today, my guess is he would not meet in secret with the House speaker to cut a backroom deal that would further hammer the 99 percent by reducing Medicare and Social Security benefits that we have already paid for. Instead, FDR would call it like he saw it — as he did in a 1936 speech while accepting the Democratic Party’s nomination for president. FDR addressed what he saw as a grave threat to the United States from within:

“These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power.”

The economic royalists of today are the financial and corporate elite that lobbies for their own set of rules. Both U.S. parties are beholden to their outrageous cash flows. We as a united people can’t change things until we have accepted this reality. Under FDR, workers had a seat at the table but who speaks for us now? The Progressives won with FDR and we can do it again if President Obama stands with us. If not now, when? It’s time for President Obama to channel his inner FDR — if he has it in him.

This entry is also available at The Huffington Post and Daily Kos.

You want true bipartisanship, you got it!

7:46 pm in Uncategorized by Donald Goldmacher

By Frances Causey

The fix is in. If you read the media tea leaves, it looks like Medicare and Social Security benefits will likely be cut to avoid going over the contrived fiscal cliff because signs are that BOTH U.S. political parties and the Obama Administration have already agreed to it. Reading between the lines of the media speaks volumes to this truth.

It is not so much what is being said by politicians but what ISN’T being said. Have you noticed the dog and pony show around President Obama “drawing a line in the sand” about tax increases for those making $200,000 and up, and House Majority leader John Boehner feigning a fight.

With his populist rhetoric, President Obama is sure to rally his “base” which will soften the blow when he cuts benefits to Medicare and Social Security. I particularly marveled when word leaked by the Obama Administration that he would not be averse to rescinding the tax increase after one year. Hint hint.

The reality? On matters of economics, the Democratic Party does not look a whole lot different from the Republican Party. The Democrats who are right of center as a party long ago abandoned the ideals of FDR who created policy that saved capitalism from itself in the 1930’s and defended working people against its excesses. We need today’s Democrats to put up a fight and they are taking a pass. Crimes of gargantuan proportions have been committed since the 1980’s and continue with instruments like derivatives. Now, the thievery continues with cuts to Social Security and Medicare. As Senator Bernie Sanders says in Heist.

If you really did the investigation, the Democrats would not be able to simply say; oh it was that George W. Bush, it was him. Well you know what, it was a lot of Bush. But I’m afraid the Republicans would be able to say, sorry, not just us, take a look at Robert Rubin, secretary of treasury under Bill Clinton, and all of the Rubin guys. They were working with Allan Greenspan; they were working with Phil Gramm, to deregulate all of this stuff. So you got true bipartisanship – everybody wants bipartisanship, you got it!

I’m still amused when I read or hear people talk about how both parties are separated by ideology with Democrats wanting big government while Republicans are for smaller government. This is just more subterfuge to deceive the public about what is really being negotiated between volleys on the Capital’s basement tennis courts. Both parties support big government to help their favorite industries (think Wall Street, military contractors or Big Pharma, for example,) and occasionally the 99%.

So Act Two of the ideological dog and pony show is trotted out on stage mainly to entertain the good ole boy network as Economic Policy Institute Co-founder Jeff Faux describes in Heist.

If Greenspan and Rubin had really believed the ideology that they preached, they would not have bailed out the S&L’s the way that Greenspan did.…Rubin would not have bailed out the Wall St. holders of Mexican bonds in nineteen ninety-five. Greenspan would not have bailed out the stock market in two thousand and two thousand one. The only explanation I can have for this is that it’s a class question. These people were protecting their class. And what class was that? That was the class – global class – the network of financial wheeler-dealers who had essentially dominated the world economy.

Did you see the actual details (or those NOT leaked to the media) of the financial wheeler-dealer and former Morgan Stanley Director Erskine Bowles’ plan to repair our budget? These were provided by one of the two members (Elizabeth Warren being the other) of the Senate – Bernie Sanders – who retains any credibility.
According to Senator Sanders, Simpson-Bowles would cut Social Security benefits for current retirees by reducing the cost of living adjustment; cut Social Security benefits for middle class beneficiaries by 35 percent; raise the eligibility age of Social Security to 69; and cut Veterans benefits. (Remember during the campaign how both parties invoked these benefits as sacred.) But our favorite Simpson-Bowles bullet point is the one that would reduce taxes for the super rich and corporations, which has already done such wonders for our economy.

There is some good news. A truly progressive social movement is in its infancy in this country but who would know about it? Certainly not the mainstream news media. First we had Wisconsin, then Occupy Wall Street, the re-election of President Obama, the election of truly Progressive candidates Tammy Baldwin and Elizabeth Warren who demanded and won a seat on the senate banking services committee. And now we have fast food workers demanding a living wage and the right to join a union! Imagine that.

And the good people of California voted to raise taxes on the rich, defeated an anti-union initiative, and Washington state voted in legalization of gay marriage and marijuana. The 99% is awakening to the menace of corporate rule. Our work now is to not be fooled by the rhetoric of the Democrats who quietly and spinelessly agree to the severe, slow cuts outlined in Simpson-Bowles. Read behind the headlines to know where your bottom line is.

JeffreeB will be available for comment directly following publication.

This entry is also available on The Huffington Post and Daily Kos.

Deficit obsession is a creation of the ultra right message machine

3:57 pm in Uncategorized by Donald Goldmacher

By Frances Causey

Goldman Sachs CEO Blankfein in a suit

Goldman Sachs CEO Lloyd Blankfein is one of the fiscal cliff's biggest fans.

Journalists have long loathed to write about and report on economics, dismissing the entire field as too hard to understand or impossible to reduce to a quote or a sound bite. Because of this, working Americans are paying the price as the parameters of the current debate around the deficit, budget and the so-called fiscal cliff are being defined by the likes of Goldman Sachs CEO Lloyd Blankfein and Peter G. Peterson, two men who are heavily invested in the outcome around the subject. With important programs like Social Security and Medicare on the line, there can be little doubt that working people are not represented in Washington.

Reading mainstream media headlines and watching cable news is really bad for your bottom line because those stories are for the most part based on content churned out by the huge public relations machines funded by Peterson and Blankfeins’ Goldman Sachs. This ideologically driven (we only want government when it enriches us) information is neither comprehended nor analyzed by the journalists or news outlets that send them out like retreads on a worn tire. In other words, if a lie is repeated enough it becomes the truth.

This writer encourages readers to look not to the mainstream media, but to the work of academics like economist Dean Baker from the Center for Economic Policy and Research. In today’s maelstrom of corporate owned news, we must turn directly to the source of good, non-partisan information. Dean Baker’s “think tank” is actually “reporting” and researching the facts behind our economic crisis unlike Peterson’s money fueled organization, which spews its founder’s personal beliefs and then manipulates the data to support them, all of which lead to the “creation” of the fiscal cliff to begin with. Please stop and question everything you see and read about the deficit because chances are it’s loaded with billionaires self-interested political and financial goals.

As Dean Baker, who predicted our crisis many years ago, points out, our deficit was both relatively modest until the economy collapsed in 2008. And as neither Republicans nor Democrats would like to admit our deficit is not “attributed to “extravagant social spending”. Baker writes with authority that this is “straightforward and not debatable.”

Baker’s research also shows that our current deficit, which is 10 percent of GDP, was created when the housing bubble induced the economic collapse, which then lead to a sort of perfect storm or a “plunge” in tax collections, coupled with an increase on spending for food stamps and unemployment insurance. So now you have the simple, unvarnished truth about the roots of our economic collapse. Is it really that hard to understand? But seriously, we encourage all citizens concerned about their own “economy” to discover the facts for themselves. We did at Heist and came up with our own solutions to “fix the debt”.

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‘Fix the Debt’ CEO Dream Team Wants You to Be as Scared as They Are of the Fiscal Cliff

2:26 pm in Uncategorized by Donald Goldmacher

Note: This entry was co-written by policymaven1 and JeffreeB

Sharp cliffs over water

Is our economy going over the brink?

Many readers of our last post about Pete Peterson’s attack on Social Security commented on a very accurate point: Social Security contributes nothing to our national debt. It is a system into which we pay; and then, eventually, it pays us. And, as we previously pointed out, the Social Security Trust Fund is in surplus. And if the Social Security Trust Fund does begin to run dry, by law, it automatically reduces benefits payments to compensate. Which raises the question: Why do Peterson and pals so badly want us to believe that in order to reduce our national deficit, we have to reduce benefits and increase eligibility age for Social Security?

Well, let’s take a look at just who exactly wants to “help” us “fix the debt.” Erskine Bowles and Alan Simpson, the budget hawks who co-chaired the Simpson-Bowles Commission at President Obama’s behest, founded the Fix the Debt campaign with a nice chunk of change from the Peter G. Peterson Foundation (which is run by Pete’s son, Michael). Fix the Debt is co-chaired and co-”steered” by an array of politicians from both sides of the aisle. At last, bipartisanship!

But there are others on the steering committee. One of these is Dave Cote, CEO of Honeywell. Cote ranked 11th on a list compiled in a recent study conducted by the Institute for Policy Studies of executives who have saved the most from the Bush tax cuts. According to the IPS, Cote’s taxable compensation for 2011 was a bit over $55 million, and he got out of paying about $2.5 million thanks to the Bush tax cuts.

Another member of the steering committee is Robert Zoellick, former Vice Chairman of Goldman Sachs. Citizens for Tax Justice reported in 2011 that Goldman Sachs claimed a $352 million Excess stock compensation deduction in 2010 and received a $123 million tax subsidy. Goldman along with 170 other companies avoided paying $2 billion in taxes from this loophole alone. And one of Goldman’s former ringleaders is now going to help us fix the debt!

Pete Peterson’s aforementioned son Michael is also on the steering committee, along with James B. Lee, Jr., vice chairman of JPMorgan Chase. And there is a sizable, ever-growing list full of other nefarious CEOs who have signed on to Fix the Debt’s CEO Fiscal Leadership Council.

This is the dream team Peterson has assembled to pull us out of this whole mess. Oddly enough, you may have noticed, the lineup looks strikingly similar to that of the team that put us in this mess in the first place.

But let’s take a moment to look at how we got here in the first place. The reality is that the current system of taxation created by Ronald Reagan and put on steroids by George W. Bush is working quite well for Peterson and his fellow oligarchs. Economist Robert Kuttner outlines the beginnings of this historic wealth transfer in our film Heist: Who Stole the American Dream?:

You had massive lobbying beginning in seventy-six, seventy-seven, seventy-eight, for cutting taxes on rich people — trickle down economics. Cut capital gains taxes, cut dividend taxes, cut income taxes, and the economy will flourish. Some of the Democrats started drinking the Kool-Aid along with the Republicans.

So in 1981 Ronald Reagan convinced Congress to pass his Economic Recovery Tax Act, which cut the top tax brackets by nearly a third but raised taxes on the middle class. What was the practical effect of this new taxation? David Cay Johnston explains in Heist:

The Washington press corps went along with the White House, calling these “revenue enhancements.” By dramatically increasing the social security tax, as recommended by Alan Greenspan to Ronald Reagan, we shifted the burden of government, so that today, seventy some percent of Americans pay a heavier share of their income in Social Security and Medicare taxes than they do in income taxes, and we pushed the burden down. At the same time at the very, very top we radically cut taxes so that the 1,000 richest men, women, and children in America face an effective total federal tax rate — social security and income taxes — of about 17 cents on the dollar, and their average income is 263 million dollars.

Let’s be very clear, Peterson and his gang are fixated on the debt because they don’t want to pay their fair share of taxes! And now, we supposedly sit on the edge of the cliff, below which yet another financial mess awaits. And Peterson and pals claim to have the solution. Sound familiar? Maintaining the Reagan-Bush tax cuts is the number one goal of today’s ultra-conservative movement that has been in control of these United States since the late 1970s.

The way to peddle it to the American people? Beat the drum of debt reduction through the mainstream media megaphone. All of this is to obscure the real truth, which is that our debt is the direct result of the severe economic downturn, the continued failure of big corporations to pay their taxes on profits sitting offshore, the huge bank bailouts (paid for by you and me), and two wars fought on credit.

Up next on the Peter G. Peterson chopping block? Your Social Security and Medicare!

Note: JeffreeB will be available for comment after publication.

This entry is also available at Huffington Post and Daily Kos.

Photo: m.prinke on Flickr under a Creative Commons Share-Alike license