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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.

‘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