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David Brooks Is Disgusted . . . With the Wrong People

7:42 am in Economy, Executive Branch, Legislature, Politics by Scarecrow

David Brooks is disgusted at the Tea-GOP Zombies. In another bridge-burning column, he calls out the Tea-GOP Zombies for being not only ideological zealots “unable to accept compromise,” but also anti-intellectual morons having “no sense of moral decency.”

But before you cheer Brooks’ acknowledgement of what the rest of the planet realized long ago, consider what it is Brooks believes is morally indefensible versus what is reasonable and wise.

It seems those crazy Tea-GOP Zombies are immoral because they are preventing the presumably “moderate” GOP leadership from accepting the “deal of the century” on deficit reduction. They thus risk having voters conclude that the Tea-GOP has become nothing more than destructive fanatics who are “unfit to govern.” Uh, where have you been, Joe DiMaggio?

Though the Tea-GOP Zombies reject it for the wrong reasons, the “deal of the century” is not something the American people should want. Brooks can’t even get the most basic facts right. He claims this deal offers a 3:1 ratio of spending cuts to revenue increases. Uh, it’s more like 6:1 5:1, with revenues only 17 percent, but what’s a little math error when you’ve missed the larger point.

He claims it does nothing to imperil economic recovery, even though economists explain that any deficit reduction now will hurt the near-term recovery. Christy Romer points out that spending cuts will do more damage than tax increases; indeed, tax increases or spending cuts on the middle class are worse for the economy than increased taxes or spending cuts on the rich.

He claims the deal does not increase marginal tax rates, a favorite canard of those who can’t connect the dots when the feds deprive states of needed funding to prevent massive layoffs and cuts. States raise effective tax rates on public employees by cutting salaries and pensions and raising employee benefit contributions. If the tax rates on the rich were increased enough to avoid these de facto middle class tax increases, Brooks would be howling along with Cantor and Boehner about how unfair it all is and how foolish it is to raise taxes in a bad economy.

He claims the deal would put the country on a sound fiscal footing. Uh, no it won’t. In a rational world, sound fiscal footing needs solid growth and keeping productive workers employed and fairly sharing in the nation’s wealth, but this deal won’t help. We need an increase in tax rates or lower wealth transfers and subsidies for the wealthiest Americans for the simple reason those are unfair and wasteful. Those folks have hoovered up virtually all of the economy’s growth over the last two decades.

A sound fiscal policy would move to correct a maldistribution that is producing record poverty, record numbers of folks without health insurance, massive unemployment, starving education, and declining prospects for the bottom two thirds of Americans.

Even in strict budgetary terms, the long-run debt numbers are driven by the rise in private health care costs. While the reported “deal of the century” hacks away at Medicare and Medicaid (and Social Security cost of living adjustments, so they don’t cover actual cost of living increases) — programs that benefit primarily the middle class and poor — nothing suggests the folks at Joe Biden’s dining table have seriously tackled the industry’s greed, graft and market aggregation that are raising private health care costs faster than GDP growth.

So in the end, the “deal of the century” might cut $3 or $4 trillion from the federal debt but leave the national economy still at risk.

Nevermind that the negotiators are doing nothing to alter the continued looting and hoovering out of the American economy by an undertaxed, underregulated financial sector — heaven forbid we consider a financial transaction tax! Yet this is what Brooks calls “sound fiscal footing.”

The sad reality is that the supposedly sane, non-fanatic and fiscally responsible actors in Brooks’ morality play are themselves irresponsible loons facilitating the hollowing out of America. The Tea-GOP Zombies can at least claim they believe in what they’re doing, and their defense is ignorance and insanity. But only the most cynical hypocrites would claim there’s any coherent theory to what President Obama, the Democrat leadership and the supposedly “moderate” Republicans are now proposing to do to America.

A budget deal is supposed to help matters, not retard them. But there’s nothing here to actually help the American economy, nothing to resolve the housing decline, no theory or relevant precedent under which any sensible person can claim otherwise. There’s no help for the states, no protection for workers, no relief for the unemployed, no fix of a still broken health system, no funding for decaying infrastructure, no boost to education. There’s nothing here to end America’s ruinous $4 trillion wars nor question the “we can attack any nation or assassinate anyone, anywhere, anytime” mindset.

There’s no transition to an alternative energy future, no vision of any future that even catches up with what other modern nations already have and do. We once built transcontinental railroads to speed people and goods across the nation. The Europeans and Japanese now do this 2 or 3 times faster than we do. The Chinese are rapidly laying high speed rail tracks while we lay off teachers and argue about Amtrak.

Deal of the century? More like the deal that guaranteed America’s continuing decline. That’s the “no-brainer.” So who are the irresponsible idiots in this story, David?

Update, via Politico, we learn Brooks has the Tea-GOP confused about percentages, never mind currency sovereigns.

“If we are net borrowing every year, adding to debt, then we will never be in position to fulfill a ‘sacred pledge to pay the money back,’” Morrissey wrote. “ That’s a rather large flaw in fiscal policy and in Brooks’ logic, which may be one reason why some of these Republicans don’t pay much attention to ‘intellectual authorities’ like, er, David Brooks.”

Uh, if we have healthy growth so that the GDP is expanding at a rate faster than the debt, then the aggregate debt can increase every year but it becomes a smaller and smaller percentage of GDP. So there is no problem paying it back, even in their framework. Of course, this requires fourth grade math.

Comcast Lobbyist Buys Your President’s Dinner, And All We Got Is Weiners

8:10 am in Economy, Executive Branch, Uncategorized by Scarecrow

Hot Dog

Hot Dog by Mark McLaughlin

Until last night’s quarterly fund raising deadline, I kept getting these emails from Dan Pfeiffer et ilk telling me it’s not too late to join the lottery for dinner with the President. All I needed to do was donate $150 $75 $15 to something like the Committee to ReElect the President (CREEP) and I’d be entered in a raffle to win dinner with Obama.

I hope you saved your money. From The Washington Post’s blog, Obama Raises More than $1.2 million in Philadelphia.

President Obama raised more than $1.2 million at two campaign fundraisers here Thursday night, the last events of his money-raising blitz in this early stage of the 2012 campaign.

Campaign officials said about 800 people, each giving at least $100, attended the first event, at a Hyatt hotel. Later in the evening, Comcast’s executive vice president, David L. Cohen, hosted about 120 people in his home for a dinner, each of the attendees giving at least $10,000 for Obama’s reelection campaign.

[snip]

Cohen, a longtime Democratic operative, has successfully sheparded the regulatory review of Comcast’s merger with NBC Universal earlier this year.

So the chief D.C. lobbyist responsible for successfully shepherding the merger of Comcast and NBC through the regulatory process is a chief fund raiser and bundler for the President’s campaign coffers. How nice.

Of course, it’s just harmless bipartisan fun. One of the Republican appointees to the FCC who voted for the merger soon resigned her position and took the Governmental Affairs lobbying job with Comcast-NBC Universal. All in the family.

Anyone who gets Comcast’s rising monthly cable bills and deteriorating service and looked at that merger would have asked how it could possibly be in the public interest to allow one of the worst corporate cable monopolies to merge with another corporate media oligopoly? Answer: it can’t. But of course, that was never the relevant question.

The only thing that mattered was how much could the corporate sponsors deliver and how much could the President’s men and both parties extract from the deal? In Afghanistan, it’s called corruption. These people belong in jail. All of them.

Remember this the next time you get a letter from these CREEPy people asking you to make a small donation of just $150 $75 $15. You can’t compete against the monopolists, and you can’t counter balance their influence. The dinner that matters has already been held, and you weren’t invited.

Update from commenter Wendydavis, who notes this Obama quote from the WaPo link:

“I’m prepared to bring our deficit down by trillions of dollars. That’s with a ‘t’ – trillions,” he said at the Hyatt. “But I will not reduce our deficit by sacrificing our kids’ education. I’m not going to reduce our deficit by eliminating medical research being done by our scientists. I won’t sacrifice rebuilding our roads and our bridges and our railways and our airports. I want Philadelphia to have the best, not the worst.”

Man is just phonin’ it in now; he forgot the ‘corporate jets’ thingie. That’s just not right!

Except mentioning the private jets would not be polite before having dinner later with an audience that probably owns private jets. The man is nothing if not polite.

The Hague Cites Qaddafi for War Crimes. What About US Officials?

8:57 am in Executive Branch by Scarecrow

The New York Times Reports that the International Criminal Court at the Hague has issued arrest warrants for Libyan Leader Qaddafi and his son for alleged crimes against humanity, citing the killings and persecutions of unknown numbers of Libyans during the uprisings there. The story is here.

In a world subject to the rule of law and the principle that government leaders who commit war crimes and crimes against humanity should be held accountable, we would applaud the existence of an international court to prosecute alleged criminals and serve as a warning and deterrent to would be criminals. And if that system applied its rules uniformly and fairly across nations, it would be a hopeful sign civilization can make progress towards a just society.

We are a long way from that ideal, and a primary reason is the fact that the US Government, including its recent Presidents and the most senior officials of the Defense Department and intelligence agencies routinely violated international laws against aggression, kidnapping, rendition, torture, and other prisoner mistreatment.

They invaded sovereign nations based on false premises and continue to attack or occupy them, reserving the unilateral right to conduct military hostilities, kill, arrest and imprison their citizens, or render them to Guantanamo or still secret “black sites” where they can be interrogated, tortured and held indefinitely, in violation of all civilized standards.

And against all efforts to hold responsible officials accountable for these crimes, the government insists courts have no right to question, inquire or prosecute, and victims have no legal redress. There is no law.

Since the Obama Administration chose to ignore its legal obligations under treaties America has signed to investigate and prosecute such crimes and instead chose to continue some of these crimes on its own watch, it has forfeited the right to applaud the Hague for initiating the prosecution of any other country’s alleged criminals.

You’d think that all lawyers and decent members of this Administration would be profoundly ashamed and embarrassed by this, but don’t hold your breath waiting for any spokesperson to say so. Appalling.

Obama Ignores Actual State of the Union, Makes Nice Speech

7:17 pm in Economy, Executive Branch, Government, Politics by Scarecrow

If you ignore virtually every major problem facing America, particularly those posing immediate crises for unemployed families, broken communities and struggling states, and focus only on what a country would normally do in ordinary times, then you’ll find some things to like in the President’s address to Congress. Yeah, we should invest in education, and energy, and infrastructure.

But after listening to and reading his speech, I’m struck by how disconnected that speech is from the harsh realities facing the country. To be sure, the President notes that in some areas, America is falling behind China or India and is ranked 9th, or umpteenth, or something other than “we’re number one!” So what? Is that really the problem we should worry about?

You would never know from the President’s speech that there are 15 million Americans out of work. He never mentioned it. Think about that. America’s unemployment rate — from 9.4 percent to over 17 percent when you count underemployed and those who’ve given up — is still at crisis levels we’ve rarely seen since the Great Depression. Sure, this President wants us to improve investments and education to provide better jobs for the future, but there wasn’t a single word from a supposedly Democratic President that would address today’s actual emergency. . . . Read the rest of this entry →

Nobel Economist Hints NYT Propaganda Against Public Pensions Can’t Be Trusted

1:18 pm in Executive Branch, Government, Media, Politics by Scarecrow

Can it be the New York Times worries it may lose the fact-free deficit hysteria propaganda market to the Washington Post? Today’s Times has its leading front page article suggesting public employee retirements benefits are so out of control and breaking the backs of state budgets that we may need a Constitutional Amendment to push States into bankruptcy. That way, the poor states can renege on their promises to public employees, defy their own state constitutions, and just for giggles, break the backs of employee unions.

The two-column, front page headline hides the responsibility for this propaganda hit piece in the passive voice:

A Path is Sought for States To Escape Debt Burdens

. . . which is followed by the subheading, “Traditional Bankruptcy Is Not an Option, but Versions of It Gain Support.”

The editorial viewpoint in this “news” is then reinforced by the first five paragraphs, all above the fold, making it appear that responsible policy makers are hard at work trying to solve this very hard problem before it forces defunding of essential public programs. Just marvel at the dishonest journalism:

Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.

Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign.

But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.

Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care. Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by Congressional aides.

Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout. Along with retirees, however, investors in a state’s bonds could suffer, possibly ending up at the back of the line as unsecured creditors.

So who are these heroes, these responsible “policy makers” and unnamed “proponents” and “members of Congress” who are quietly thinking about ways to save the Republic? Well, it’s the same gaggle of budget deficit hysterics who have systematically lied about the debt and the “crisis” in Social Security. The article eventually cites Sen. John Cornyn, House Republicans, and the paragon of fiscal virtue, Newt Gingrich! Those would be the same budget arsonists who gave us two unfunded wars ($1-3 trillion), an unfunded drug benefit (another trillion), Bush tax cuts (more trillions) and want extensions of the same (trillions and trillions) . . . forever!

It is not until we get inside the paper that the Times bothers to ask an employee rep what he thinks about this nonsense. And buried in a later paragraph, the Times barely mentions a report by the Center on Budget and Policy Priorities, but with little about what the CBPP says that might rebut the deficit/pension hysterics. It’s doubtful most readers will bother to check, even if they’ve read this far.

Enter a certain Nobel economist, who, unable to post much because he’s traveling, gives us this short note:

Probably no posting, unless we get stranded in some airport somewhere.

If you want something to read, look at Iris Lav’s debunking of myths about state and local finances

Huh. So what does the economist want us to read? Well, only that same CBPP report, where honest folks have politely but utterly debunked the entire premise of the Times front page and pension hysteria propaganda. The CPBB report is well written and should be read from beginning to end, but here are a few highlights:

A spate of recent articles regarding the fiscal situation of states and localities have lumped together their current fiscal problems, stemming largely from the recession, with longer-term issues relating to debt, pension obligations, and retiree health costs, to create the mistaken impression that drastic and immediate measures are needed to avoid an imminent fiscal meltdown.

The large operating deficits that most states are projecting for the 2012 fiscal year, which they have to close before the fiscal year begins (on July 1 in most states), are caused largely by the weak economy. . . . [i.e., the US could easily fix that, as they did partly in the stimulus act]

Unlike the projected operating deficits for fiscal year 2012, which require near-term solutions to meet states’ and localities’ balanced-budget requirements, longer-term issues related to bond indebtedness, pension obligations, and retiree health insurance — discussed more fully below — can be addressed over the next several decades. It is not appropriate to add these longer-term costs to projected operating deficits. Nor should the size and implications of these longer-term costs be exaggerated, as some recent discussions have done. Such mistakes can lead to inappropriate policy prescriptions.

What follows is a point-by-point debunking of all the fact-free gibberish from deficit hysterics that’s repeated on the Times front page. Samples:

Some observers claim that states and localities have run up huge bond indebtedness, in part to finance operating costs, and that there is a high risk that a number of local governments will default on their bonds. Both claims are greatly exaggerated. [followed by further historical data and rebuttal] . . .

Some observers claim that states and localities have $3 trillion in unfunded pension liabilities and that pension obligations are unmanageable, may cause localities to declare bankruptcy, and are a reason to enact a federal law allowing states to declare bankruptcy. Some also are calling for a federal law to force states and localities to change the way they calculate their pension liabilities (and possibly to change the way they fund those liabilities as well). Such claims overstate the fiscal problem, fail to acknowledge that severe problems are concentrated in a small number of states, and often promote extreme actions rather than more appropriate solutions. [followed by more factual rebuttals, including an explanation how misrepresenting or manipulating the assumed discount rate can make a more manageable $700 billion deficit look like a scarier $3 trillion deficit ]. . .

– States and localities have managed to build up their pension trust funds in the past without outside intervention. They began pre-funding their pension plans in the 1970s, and between 1980 and 2007 accumulated more than $3 trillion in assets. There is reason to assume that they can and will do so again, once revenues and markets fully recover.

– States and localities have the next 30 years in which to remedy any pension shortfalls. As Alicia Munnell, an expert on these matters who directs the Center for Retirement Research at Boston College, has explained, “even after the worst market crash in decades, state and local plans do not face an immediate liquidity crisis; most plans will be able to cover benefit payments for the next 15-20 years.” [5] States and localities do not need to increase contributions immediately, and generally should not do so while the economy is still weak and they are struggling to provide basic services. . . . [more follows]

Once again, the same intellectually dishonest deficit hysterics who have been conning the public and the media into believing we face imminent financial crisis that can only be solved by cutting Social Security, are pulling the same con about public pensions. The con is to get states to renege on commitments, some embedded in state constitutions (so much for conservative reverence for the 10th Amendment!), to fund public pension/retirement programs that employees worked, paid, and bargained for, while claiming we have no choice. It’s a lie.

It’s shameful that the New York Times is not reporting this straight but has instead published a blatantly misleading propaganda piece on the front page of its news section.

Anti-Competitive Rules? It’s Been Obama’s Agenda

10:30 am in Economy, Executive Branch, Government by Scarecrow

I didn’t know whether to laugh or weep watching Rachel Maddow last night as she pleaded with her friend Gene to talk her off another ledge, this one driven by the fear our President has completely sold out to corporate capture and Republican frames defending it.

Don’t jump, Rachel, call them out. Hint: He’s not on your side.

The latest affront was the White House release of an Executive Order directing regulatory agencies to review their rules and scrub any that might be anti-competitive or costing U.S. jobs. Thank you, President Romney, for the ridiculous notion that America’s near 10 percent unemployment is caused by anti-business regulations.

Add to that Obama’s choice of Chief of Staff and other appointments getting rave reviews from the U.S. Chamber of Commerce, plus his making Bernie Sanders wonder how any President, let alone a Democrat, could even consider slashing Social Security, a move that would logically force more older workers into a depressed labor market. He’s not a Dem, and not very smart either, Bernie.

But you have to wonder about any corporatist President pretending to care one bit about protecting genuine competition, and especially one whose two major legislative achievements were to ensure neither the largest banks and Wall Street banksters nor the nation’s largest health insurers and providers would have to face meaningful competition.

The thrust of the financial “reform” bill was to make sure the MOTU remained in power, now larger and more concentrated than they were before they destroyed and looted the U.S. financial system. The “regulatory reform” was deliberately structured to minimize statutory limits on the banksters’ size or behavior and leave as much discretion as possible in the hands of the President’s pro-bank appointees. President Tea-GOP will know what to do. More from Simon Johnson, here.

The Affordable [Care] Act was similarly designed to shield most insurers and health providers from competition, probably the only thing Republicans don’t object to. Hospitals are rushing to merge to take advantage in response, and the anti-trust agencies are sitting on their hands. Meanwhile, insurers watch warily, campaign checks at the ready, for any renewed efforts to create a public alternative, an escape from the anti-competitive market Americans will now be forced to enter.

And do we need to mention Obama’s coddling of PhRMA drugsters for all the anti-competitive measures, patent extensions, anti-compete shields they got in the deal in exchange for going silent when the Tea-GOPers try to sack even the worthwhile features?

Yesterday, two nominal Democratic appointees, including Mr. Obama’s Chairman, said it’s fine if America’s largest cable conglomerate gobbled up one of the major media broadcasters and entertainment conglomerates. Their competitors and users, outraged at the potential for discriminatory access and predatory pricing are left wondering what happened to fairness and justice, but the Department of Justice, assigned to enforce the nation’s anti-trust laws, seems to have lost its copy.

And in coming months we’ll watch Obama and the Chamber of Commerce rally Congress to ratify treaties that enable the Chamber’s largest contributors to ship US manufacturing jobs overseas.

It’s bad enough that this faux Democratic President continues to adopt Republican frames against responsible regulation of America’s rapacious corporate regime. But pretending this has anything to do with advancing genuine competition or protecting American jobs is insulting.

Update:
Shahien Nasiripour at HuffPo, Trillion-dollar banks could get bigger under financial overhaul law

Obama Pulls Plug on Elderly End-of-Life Counseling

7:05 am in Executive Branch, Government, Legislature, Politics by Scarecrow

When you get to this point you are on your own as insurers pick your wallet. (photo: Pickersgill Reef via Flickr)

Proving once again that he may be the most cowardly President ever to occupy the White House, President Obama ordered the folks writing the regulations that would have compensated doctors for providing voluntary end-of-life counseling if requested by their patients to delete that regulation. From the New York Times:

The Obama administration, reversing course, will revise a Medicare regulation to delete references to end-of-life planning as part of the annual physical examinations covered under the new health care law, administration officials said Tuesday.

The move is an abrupt shift, coming just days after the new policy took effect on Jan. 1.

Many doctors and providers of hospice care had praised the regulation, which listed “advance care planning” as one of the services that could be offered in the “annual wellness visit” for Medicare beneficiaries.

The excuse the White House gave for this capitulation to the unscrupulous right wing propagandists — meaning every conservative columnist and political hack who ceaselessly misrepresented the rule — is incoherent, a clear sign of lack of principle and political courage. Notice it’s from another anonymous White House official.

An administration official, authorized by the White House to explain the mix-up, said Tuesday, “We realize that this should have been included in the proposed rule, so more people could have commented on it specifically.”

“We will amend the regulation to take out voluntary advance care planning,” the official said.

Worse, the White House blamed their reversal on Donald Berwick, the man Obama chose and the White House trumpeted to bring humane, rational administration to Medicare. “He didn’t tell us what he was doing,” the White House seems to be saying, “so it’s not our fault he did the right thing.” Pay attention, Liz Warren; watch your back.

Why should anyone ever believe this White House? Remember, this is from the same President Obama who just last month promised us “okay, I caved on extending tax breaks for the wealthiest this time, but gosh darn it, just wait until 2012, and I’ll be really tough.”

No, he won’t. He’s a coward and cannot be trusted to keep promises to the American people. When this man is done, the entire New Deal and dozens of humane, progressive principles and programs will have been compromised or crippled. He’s not a Democrat.

One term and out.

John Chandley

President Bush Obama, GOP Agree: Bail Out the Rich, Destroy Democratic Party

6:16 am in Economy, Executive Branch, Government, Legislature, Politics by Scarecrow

Some would disagree with the president and GOP. (photo: J. Eason via Flickr)

In case you didn’t know, George Bush is still the effective President of the United States. The title of the New York Times lead article inadvertently proclaims this truth:

It’s as though George Bush is still President. And just consider what Bush redux is doing.

It seems our faux Democratic President, now in full moral and policy collapse, and with the mindset of what once passed for a moderate Republican, views his job as negotiating with the most radically conservative wing of his radically conservative party to give them what they want, while throwing a bone to the mantle of compassionate conservatism. Give the jobless benefits for another year at a cost of about $60 billion, but pay for it politically — deficit? what deficit? — with another bailout to the rich — an outright gift of $40 to $60 billions each year over two or three years that will surely grow to $700 billion in a decade and trillions more in those later decades when we’re supposed to be hysterical over a gap in Social Security.

So the jobless get a few hundred per month so they don’t have to live in their cars, unless they’re also losing their homes, and the rich get a cool hundred billion or two and trillions later. That’s damned expensive uemployment insurance, especially when you don’t have a meaningful program to put people back to work. Any morally sentient being would call this blackmail, extortion, and arrest the perps, but we don’t do that in America anymore.  . . . Read the rest of this entry →

Remedial Tax Cut 101, Just for CNN (and NPR, and…)

7:13 am in Executive Branch, Government, Legislature by Scarecrow

Start with Remedial Tax Cuts, 101, courtesy of Austan Goolsbee (featured here at right).

On the road and forced to watch CNN’s John Roberts this morning (do not try this at home), I was struck by how often one hears the tax cut debate inaccurately described. Either from carelessness or being cynically misled, the media often say that the debate is between those who want tax breaks “only for the middle class,” as John described it, versus those who want tax cuts for the rich too. But that’s not correct.

The tax cuts are about marginal tax rates in each bracket, and when you cut the rates for a given bracket, everyone in that bracket or higher gets the tax cut. So when Congressional Democrats say they support cutting taxes for those with incomes up to $250,000, what they mean is the tax cut also applies to those making over $250,000 as well. Millionaires and billionaires would get a significant tax cut for that portion of their income up to $250,000, just as those who make less than or up to that amount would. It’s not “only the middle class.”

Everyone, including the rich, gets a tax cut. Everyone. The debate is about whether Congress should agree to the Republican proposal, or Sen. Chuck Schumer’s $1 million variation, under which the very richest Americans with incomes over that $250,000 would get an additional gift just for them. As the White House tutorial explains, that additional gift to the richest people in America is huge. That’s the $700 billion ($400 billion under Schumer) we keep saying is both morally unconscionable and fiscally irresponsible.

Everyone here presumably understands this, but the media frequently gets it wrong, and I may have been shorthand careless about it too. These details matter.

Obama Flunks Economics with Pointless Federal Wage Freeze

8:35 am in Economy, Executive Branch, Uncategorized by Scarecrow

The Obama White House just announced details of a two-year federal wage freeze as a means to reduce federal spending and deficits. [David Dayen has more.] The move is obviously political and only symbolic, because the dollars involved are trivial in relation to the total deficit. But more important, the White House rationale confirms for the umpteenth time that the Obama White House’s economic thinking and priorities are deeply flawed.

From today’s White House Fact Sheet: [my bold]

Because of the irresponsibility of the past decade, the President inherited a $1.3 trillion projected deficit upon taking office and an economic crisis that threatened to put the nation into a second Great Depression. He moved quickly to get the economy moving again. Now, the economy is growing, and we have gained private sector jobs for the past 10 months. But families and businesses are still hurting, and our top priority is making sure that we are doing everything we can to help boost economic growth and spur job creation.

Now, we need to turn our attention to addressing the massive deficits we inherited and the unsustainable fiscal course that we are on. Doing so will take some very tough choices. Just as families and businesses around the nation have tightened their belts so must their government. That must be done in a targeted way that focuses our investments in what works and in what will lay the foundation for job creation and economic growth for years to come while cutting back elsewhere in our budget.

For the umpteenth time, the Obama White House has made the foolish mistake of confusing efforts to “boost economic growth and spur job creation” with the need for near-term deficit reduction. Even his economic team tried to keep the two different time frames — short run vs long-run — separate. And for the umpteenth time, this President has repeated discredited Republican gibberish that when households are having to cut back spending during a recession, government should do the same thing.

That’s just wrong. Foolishly wrong. Depressingly (literally), tragically wrong.

The economy is suffering from, among other things, the collapse of the housing market and it’s relationship to a massively fraudulent, rapacious financial system. When housing prices collapsed — and they’re not done yet — households lost over $6 trillion in wealth and families lost trillions in retirement savings. With 15 million unemployed and millions more living in job and health insecurity, typical non-wealthy households have no choice but to cut back. So private spending cannot pull the economy out of the ditch as it has in the past. But that is not true of the federal government.

Government spending can pull the economy up from the bottom. And only government has the resources and the power to fill in the gap in aggregate demand to bring the economy and jobs back.

A government with its own currency is not a household. It has different abilities, different ways of affecting the economy and paying for things. It controls the money supply. And it has different responsibilities, including the obligation to pull the economy out of a deep recession, to help create jobs and foster job creation in the private sector. To do this under today’s conditions requires enhanced spending/investments by government, not less. And there has never been a better time for government to act, nor has the cost of acting ever been lower.

It’s counterproductive and stupid for the President of the United States to keep telling Americans the false argument that government needs to tighten its belt when households are tightening theirs. And it’s even worse to falsely claim that by focusing on deficit reduction, the government is “doing everything we can to help boost economic growth and spur job creation.”

It’s clear from watching Ireland, Portugal and Spain that government-imposed austerity does not solve the problem of depressed demand. It makes it worse, deepening the recession, worsening unemployment and imposing pain on the populace while crippling government’s ability to act. We’re watching these countries test all of the Republican and neo-liberal doctrines, and they’re all failing, yet we pretend not to notice and follow the same path. Republicans would even force the US to act as though it’s Spain, even though Spain is trapped into austerity by the Euro. That’s mindless.

As DeLong often explains, those who have the ability to borrow (or create money) — e.g., the federal government — must do so when the private sector can’t or won’t. As Krugman recently wrote in discussing austerity in Ireland, “punishing the populace for the bankers’ sins is worse than a crime; it’s a mistake.”

This is not the first time this President has issued such, uh, unhelpful statements on the economy and deficit. Maybe he’s just badly served by economic or political advisers, or just doesn’t know any better. Either way, get some decent help, Mr. President, including someone who can tell you “NO!” the next time your instincts or advisers tell you to keep making the same mistakes, over and over.

John Chandley