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Pelosi’s Picks for Super Committee Embrace Tea-GOP Economics and Budget Gibberish

3:05 pm in Economy, Government by Scarecrow

If you’re hoping that Nancy Pelosi’s picks for the Congressional Super Committee have either the wisdom or courage to stand against the job-killing spending cuts Obama and Congress imposed on the nation, you’ll be disappointed.

Two of Nancy Pelosi’s picks, Chris Van Hollen (D-MD) and Rep. Xavier Becerra (D-CA), revealed that their understanding of depression economics is no better than Herbert Hoover’s or Michele Bachmann’s. From Brian Buetler at TPM:

Democrats on the new joint deficit Super Committee will seek more than the $1.5 trillion in deficit reduction they’ve been tasked with finding, in order to help offset some of those costs [of funding jobs programs].

“All of us would like to set as a target for ourselves even more than $1.5 trillion,” Rep. Chris Van Hollen (D-MD), who’s also the top House Democrat on the Budget Committee, told reporters at a Tuesday Capitol press conference. . . .

Committee member Rep. Xavier Becerra (D-CA) agrees with Van Hollen, and says he’d be willing to put key progressive programs on the table if it gives Congress more running room to shore up the economy now.

“It’s incumbent upon the Congress and the government not to make things worse,” Becerra said. “I’m looking at the last six months and I’m not seeing how job growth has come from some of this cutting of services, but again I’ll be open to it so long as…there’s proof that the proposal will lead to job growth and deficit reduction.”

Where do they come up with these absurd notions? Read the rest of this entry →

Deficit Hysteria Wins: GOP Congress, Obama White House Succeed in Stopping Jobs Growth

5:33 am in Uncategorized by Scarecrow

Zero by Leo Reynolds on flickr

Zero by Leo Reynolds on flickr

The US economy managed to create virtually zero jobs during August, leaving the unemployment rate at 9.1 percent.  And  revised estimates lowered the number of jobs created in July.   With the GOP Congress and the Obama White House still paralyzed by mindless deficit hysteria and unwilling to fund any credible effort to create jobs, the economy is stalled.  From The Financial Times :

The unemployment rate remained steady at 9.1 per cent, with 14m American unemployed. Economists had hoped for a 68,000 boost to non-farm payrolls, which was already modest growth from the previous month.

This is the worst non-farm payrolls report since August 2010.

Private sector payrolls added just 17,000 jobs, well below the 95,000 estimate and the manufacturing sector lost 3,000. In the public sector, where budget are being cut, 17,000 jobs were lost last month despite the return of 22,000 workers following a partial government shutdown in Minnesota.

This is exactly what reputable economists have been warning about. With the housing market still declining, consumers still struggling to recover from losing $8 trillion in wealth from the housing bubble crash, and exports hampered in struggling economies oversees, only government can fill the void. But our leaderless government is paralyzed by a preoccupation with deficits, when only deficits are keeping the economy from going under.  It is the same in Europe, where incompetent central bankers continue to demand national economies shrink deficit spending in pursuit of fantasy confidence fairies.  Krugman sighs: Read the rest of this entry →

Elizabeth Drew Wants a Better President, Also a Pony

11:24 am in Uncategorized by Scarecrow

A pony for Elizabeth (photo: Tambako the Jaguar)

A pony for Elizabeth (photo: Tambako the Jaguar)

You can hardly blame the growing number of decent folks, long respected, admired writers like Elizabeth Drew, who are now, or still, calling on Barack Obama to stop being a wimp, a disappointment, a terrible negotiator, or a betrayer to his people, principles and Party and become a better President. But he won’t, people, so what’s plan B?

I’m a great fan of Ms. Drew; have been for, um, decades. In her now widely seen article, she joins many others urging Mr. Obama to just say no to the economic terrorists holding the government, its credit, its finances and its functions hostage. Just demand a clean, no strings bill to raise the debt limit and tell the nation, and the Tea-GOP, that he’s had enough. The nation would cheer.

The problem with all such urgings is they assume the President is being forced to accept terrible public policy, and that only a stiffer spine, backed by his supporters, or perhaps a more clever bargaining strategy, would release the inner President he keeps hidden. Read the rest of this entry →

Boehner’s Tea-GOP Crazies Reject Obama’s Crazier Grand Bargain; Dangerous Stalemate Continues

7:04 pm in Uncategorized by Scarecrow

Reports from Saturday night indicate Speaker John Boehner has told the White House that his Tea-GOP party will not accept President Obama’s framework for a “grand bargain.” Apparently his people aren’t willing to vote for up to $1 trillion in additional tax revenues, and there may be other objections.

[David Dayen has more at FDL News.] From Huffington Post’s Ryan Grim:

“Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes,” Boehner said in a statement. “I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.”

The Obama White House’s rhetoric remains tied to Tea-GOP talking points, which if used as a basis for policy, would only harm the economy and increase unemployment. His senior advisers continue to claim, illogically, that it would be okay to make massive cuts in spending if only the rich paid more taxes. Here’s Dan Pfeiffer (via Ryan Grim):

“The President believes that solving our fiscal problems is an economic imperative. But in order to do that, we cannot ask the middle-class and seniors to bear all the burden of higher costs and budget cuts. We need a balanced approach that asks the very wealthiest and special interests to pay their fair share as well, and we believe the American people agree.

Two points. Spending cuts now, with or without tax increases, would harm the economy, yet the White House can’t seem to say this clearly. And even if the cuts were scheduled for a post-recovery period when they would be less harmful, cutting valuable programs like Social Security would not be acceptable and would not become justified by having hedge fund managers pay more taxes.

When used here, the “balanced approach” argument is gibberish. Spending should be cut when it doesn’t serve a worthwhile public purpose; taxes should be raised and allocated fairly from those able to pay to accomplish those public purposes. Only someone indifferent to public policy consequences is taken in by this “balance” argument.

Where Boehner’s rejection leaves the discussions planned for Sunday is hard to sort out, because none of the parties has a coherent, logically consistent position or one consistent with the public interest. The American people do not have a reliable representative to protect their interests in these discussions. The realities appear to be this:

– The nation’s economy desperately needs more federal spending, because the economy has not sufficiently recovered to sustain sufficient growth to reduce employment in any reasonable timeframe. Friday’s terrible jobs report confirmed this. The human suffering and vast economic waste from this situation are the real crises facing the economy, not deficits, and Washington is not addressing these real crises.

– Despite the consenus on the need for more spending to rescue the states, reduce and relieve unemployment and rebuild the country, none of the parties is recommending these measures as necessary conditions for agreement on raising the debt ceiling, even though they would affect the debt.

– There are no leaders in either party recommending economically sound policies. So it’s very unlikely anything useful will come out of the debt limit discussions that will help the economy, and very likely the economy will be harmed.

– The debt limit has to be raised. Only the most extreme, least reality-based members of the Tea-GOP deny this. However, the Tea-GOP base may prevent sufficient Republican votes to raise the debt limit without spending reductions that could cripple the economy.

– The country is in the middle of a fiscal/financial crisis, but not the one Boehner describes. We face the Hobson’s choice of either hurting the economy and increasing unemployment by slashing spending at a time when more spending is needed, or creating a further financial crisis by failing to raise the debt limit. The Tea-GOP has deliberatly created this terrible choice.

– With Tea-GOP votes now questionable, Democrats are now realizing their votes could become the deciding factor in choosing between crippling the economy further and betraying their base on the most important social programs of the Democratic era, or refusing to do so and being blamed for the consequence of not raising the debt limit. Obama has recklessly put Democrats in this untenable position.

With a few exceptions, much of the Beltway reporting can’t seem to rise above “he said/she said” narratives or deficit hysteria framing (e.g., see NYT versus this NYT editorial), and so it is not reporting how destructive Washington’s leaders have become or how much Obama’s reckless judgment has crippled his own party. We are staring into an abyss, none of the leaders are grownups, and those who lead us are not listening to anyone with an ounce of sense.

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.

Mitt Romney: Obama Failed Because We Needed a Larger, Longer Stimulus

6:39 am in Economy, Politics by Scarecrow

Mitt Romney - Caricature

Mitt Romney - Caricature by DonkeyHotey

The Washington Post’s Philip Rucker caught Mitt Romney explaining how to think about economic policy when the labor market is depressed, housing has tanked, households are broke and the Fed is limited by near-zero interest rates:

Romney criticized Obama’s $787 billion stimulus package, saying it did not create long-lasting jobs. He said he would have lowered tax rates, instituted fair trade policies and boosted energy independence to help create sustainable private-sector jobs.

“The challenge with so-called stimulus is it tends to be throwing a little gasoline on the fire,” Romney said. “It causes some heat. . . . It just doesn’t cause permanent heat. It’s not like putting a log on the fire.”

Translation from Chameleon-speak: Romney is hinting that the economy — the fire — needed not just more stimulus, but longer-lasting stimulus. Instead of pouring on a little gasoline to kick start the fire, we’d needed a slow-burning log that would provide fuel for a longer period. Except for the implied nonsense that spending on workers and goods/services by the private sector creates jobs but the same spending by government doesn’t, he almost sounds like all those liberal economists — Krugman, Thoma, Stiglitz, Galbraith, Baker, et al.

But didn’t Obama’s 2009 and late 2010 stimulus packages contain a large percentage of tax cuts, some that have been extended? Are there no trade agreements with Columbia or Korea, or programs to promote domestic energy production?

I don’t follow what Mitt Romney says everyday, because sooner or later a policy chameleon will say everything once, mimic all positions, and then switch back in case you missed something. So I probably missed that other time, back in early 2009, when Mitt insisted the stimulus needed to be big enough to produce some real effect on the economy, and it needed to avoid the “shovel ready” trap and last longer because the economy would take a long time to recover from a finance and credit shock the size we suffered. He surely wouldn’t be making this up now, saying “I told you so,” to prove what a prescient leader he’d make.

But he’s right about the failed leadership in Washington, D.C. From the NYT’s reliable stenographer on the deficit hysteria debate, here’s the White House’ Press Secretary, Jay Carney:

. . . Jay Carney, said Republicans must be willing to consider tax changes, including the elimination of “loopholes” that benefit corporations.

“It’s the only way to get it done if you want to do it right and you want to do it in a way that is fair and balanced and ensures that the economy continues to grow and continues to create jobs,” Mr. Carney told reporters.

What is Carney talking about? Whatever you think about long-run deficits, it doesn’t make sense to be slashing spending for deficit reasons now, and that conclusion doesn’t change if you couple the spending cuts with eliminating tax breaks for oil companies. There are valid reasons for ending needless subsidies for rich people and hugely wealthy industries, but doing that doesn’t make it okay to slash programs to help the elderly, poor women and children, now or later. Read the rest of this entry →

Does the New York Times Know Our Politicians Speak Gibberish about Deficits?

9:02 pm in Uncategorized by Scarecrow

For reasons known only to its publishers, the New York Times has chosen to assign reporters and editors to the budget/deficit negotiations who seem oblivious that the politicians they routinely quote are speaking gibberish, without any effort by the Times to explain it’s gibberish.

In this article about the “breakdown” of the deficit reduction talks around Joe Biden’s dining table — a “breakdown” occurs when Eric Cantor chooses not to attend a meeting — Times reporter Carl Hulse dutifully repeats politicians’ nonsense without any further explanation or context:

From Eric Cantor:

“As it stands, the Democrats continue to insist that any deal must include tax increases,” Mr. Cantor said in a statement. “There is not support in the House for a tax increase, and I don’t believe now is the time to raise taxes in light of our current economic situation. Regardless of the progress that has been made, the tax issue must be resolved before discussions can continue.”

Here’s similar gibberish from Senators McConnell and Kyl:

“President Obama needs to decide between his goal of higher taxes, or a bipartisan plan to address our deficit,” Mr. McConnell and Mr. Kyl said in a joint statement. “He can’t have both. But we need to hear from him.”

Any first grader knows that 2 + 2 = 4. Any fourth grader knows that if you lower spending by $2 and raise income by $2 it adds up to a $4 effect. But apparently, any Tea-GOP representative is allowed to pretend this is not true, and the Times will report their statements without noting that senior officials in a major party are speaking gibberish.
Read the rest of this entry →

Larry Summers Tells Us How to Fix the Economy He Helped Mess Up

6:48 am in Economy by Scarecrow

Larry Summers, now the burden of Harvard University, is back on the op ed pages to explain what’s wrong with the economy and how to fix it.

It’s all in the technocratic language of macro economics — Brad DeLong approves and will likely retranslate later — but here, I think, is the gist: It seems the financial and housing collapse crushed demand, and it has to be rebuilt with jobs and economic growth over a very long period. And until you do that, you can’t expect deficits to come down, so it’s way premature to pivot to reducing the deficit. Instead we need more stimulus to increase demand, restore jobs and boost the economy. And this is a great time to invest in infrastucture, education, and so on, because we have lots of people who can do that work who need jobs, we need the infrastructure, and interest rates on borrowing are near historic lows. Oh, and we need to restore confidence.

Most of that could have been written by Paul Krugman, the guy the Administration ignored for three years, or by DeLong and many critics of the Adminstration’s far too tepid economic policies. In fact, it has been written by them. So is this Larry’s mea culpa?

Larry Summers is the guy who, when presented in early 2009 with a set of calculations and projections from Christine Romer that showed we needed a stimulus about twice the size the one Summers ultimately proposed to the President, said we should limit fiscal stimulus policy to a mere “insurance policy” against the possibilitiy of another Great Depression. That would be enough to produce a self-sustaining recovery, he told President Obama. And they stuck to that story even when Romer’s starting assumptions proved too optimistic, because we were in a far deeper ditch than she assumed.

When numerous serious economists and dismayed scarecrows insisted the stimulus was far too small and likely too short, and pleaded for jobs programs and another stimulus by the end of 2009 and throughout 2010, Summers dismissed them. He insisted the President and his team had done enough with the policies they had. Eventually, the Administration was forced to admit in December 2010 that the economy needed another $300 billion or so in unemployment insurance and added stimulus via a payroll tax cut. Not to mention a shameless gift of over a hundred billion for the richest people in America.

Once again, serious economists and scarecrows said this would not be enough, reminding the Administration that simultaneous deficit reductions and layoffs at the Federal and State levels would negate any stimulus effect. Summers and his boss dismissed these warnings, too.

Now Summers tells us we need another $200 billion in extended payroll tax cuts. He explains that this is the nature of recessions connected with financial collaspe, that this inherently crushes demand and it takes a lot of money — from borrowing and spending — and an long time to build demand back up to the level at which economic growth and significant job creation are self sustaining. Well, no kidding, Larry. Except you pretended for two and half years that wasn’t true and the rest of us were stupid.

He now tells us, as Krugman et al have been warning for years, that we’re in the middle of a “lost decade,” a predictable era we learned about from the Japanese financial crash and their lost decade. Unfortunately, Summers took until the fifth year to realize his economic advice left America in the midde of a terrible economic decade.

At no point in Summer’s op ed does he own up to the huge blunders for which he and his boss are chiefly responsible. We don’t read of all the lectures he gave to the skeptics about how the Administration had done all that should and need be done. And where was Larry when the scarecrows warned that Ben Bernanke, whom we pleaded with the President not to reappoint, was signalling his predictable unwillingness to meet the Fed’s obligations to pursue full employment?

He now warns us against a premature pivot to deficit reduction, but he neglects to mention it was the President and his team who sanctioned that premature pivot over a year ago; his team made up excuses, and continues to make up excuses, for empowering the Cat Food Commission then and the Joe Biden Dining Table surrender now.

Yet even now, Summers can’t let go of his own and his President’s mistakes. He and his President insisted that any investments funded in the 2009 stimulus needed to be “shovel ready,” because they didn’t want the stimulus to last too long. We argued the recovery could take many years, so that extended investment programs would be needed. And we said it was the right time to invest: we had infrastructure that needed to be rebuilt, millions out of work willing to do it, and interest rates were low. It’s more than two years later, and now Larry Summers says, gosh, it makes sense to be making infrastructure investments now, because we need them, we have people who can do it and need the jobs, and interest rates are low.

Where have you been all these years, Larry?

And what’s the point of using the word “confidence” as part of what we need to restore? You know that’s Tea-GOP code for restoring “business confidence” among the group that simply wants to cut corporate taxes and slash regulation — like the stuff that EPA does, or OSHA, or the folks who oversee drilling permits in the middle of the Gulf. And wasn’t it Larry Summers who insisted we needed those efficient TBTF banks to remain competitive? You just can’t seem to stop doing damage, can you?

You screwed us with financial deregulation. You screwed us with an inept, inadequate stimulus. You screwed us with the unnecessary “pivot” from jobs to deficit reduction. And now you want us to believe in the confidence fairy?

Just go way.

DCCC and CREEP Want My Money to Re-Elect President Romney’s Econ Team

2:20 pm in Uncategorized by Scarecrow

Digby, DeLong and likely others have already commented on (wept, pulled hair out, thrown darts at) Ryan Avent’s report of the Obama economic advisers doubling down on their “we’ve done enough for the unemployed” excuses, refusing to acknowledge Obama’s economic policies have failed to produce either healthy, sustainable growth or an acceptable rate of improvement in the nation’s unemployment.

Paul Krugman calls it “learned helplessness,” but it looks more like Stockholm Syndrome or worse. It’s not just the White House folding again to anti-government Tea-GOP demands; Obama’s team seems to believe the same gibberish, and we’re all going to pay for their mistakes. They’ve gone from “spend now, cut spending later,” to “cut now and cut later, and maybe spend a little to save face.” As Avent concludes:

In any case, it seems a sure thing that fiscal policy will be a net drag on the economy in coming quarters, and not an insignificant one either.

For us non-economists, this means the people sitting around Joe Biden’s dining table are debating how much worse to make the economy and unemployment, because they apparently believe in non-existent confidence fairies, bond vigilantes and voodoo economics. In short, these people can’t be trusted to run the government, let alone put Americans back to work doing stuff that needs doing.

DeLong notes that the likely effect on the US economy will be worse than the downturn and pain the UK just experienced from their self-inflicted bout with austerity. (more on UK austerity failure here) You’d think Americans would be grateful for the advance lesson in macroeconomics, but our ruling class is made up of non-learners: Ideas that are wrong in theory and failed in practice have to be enacted here, for no good reason.

That’s bad enough, but then the Obama Pods at the Committee to RE-Elect the President (CREEP) and the DCCC have the nerve to send me e-mails — yes, I’ve sinned in the past , but I’m better now — asking me for money while they push policies that are little different from what we’d expect from a President Romney. That’s not Romney pre-primaries; that’s Romney if he actually fooled the Tea-GOP crazies and became, you know, actually responsible for doing something for which he might be held accountable.

I don’t know why I should contribute to people whose policies have become indistinguishable from what we’d get from a Romney agenda. You’d think even the Obama Pod People would figure that out, but they keep asking.

Another e-mail tells me Obama’s campaign manager — Pfeiffer? — will be a keynote speaker at NetRoots Nation. I’m can’t make it this year, but if I were going, I’d be saving up confetti to shower on him. I’d cut up lots of pictures of rotten tomatoes and . . . send them in lieu of a donation. Probably get arrested, but I’d feel better. It’s come to that. Nice work, Pod People.

Jane Hamsher Hits Tea-GOP and White House For Ignoring Jobs

4:43 pm in Uncategorized by Scarecrow

Honest economists and sentient observers looking at the most recent and increasingly dismal economic and jobs numbers have their hair on fire over the failure of Washington D.C. to do anything about it. But neither Congress nor the Administration can get their heads out of the deficit sand to see the devastation.

The current conventional wisdom claims the central cause of anemic growth and joblessness after a financial collapse is deficits. That’s clearly wrong, but somehow this is too complicated for most of the media to grasp.

So it’s left to progressive advocates and journalists like Jane Hamsher and HuffPo’s Ryan Grim appearing on Cenk’s show, to push back on the conventional wisdom. It’s left to them to explain why the debt reduction talks in Joe Biden’s dining room are fundamentally misguided and indeed harmful to the country.

With most of the Beltway media preoccupied with what’s on Biden’s deficit reduction table, Jane correctly refocused the conversation on the absence of economic and jobs programs and the folly of slashing government spending and laying off workers. Good for her.

That opening allowed Ryan Grim to press Cenk’s GOP consultant, John Feehery, to explain exactly how cutting federal spending could create jobs during a recession. Grim challenged the Tea-GOP’s illogical talking point that businesses, who are sitting on over $1.5 trillion, are not hiring mainly because they lack confidence in government’s ability to control deficits.

Since interest rates are at historically low levels, investing now would make perfect sense, but where’s the demand? The obvious answer is seen not only in the unemployment numbers — people worried about losing their jobs are not about to increase their spending — but in another $1 trillion loss so far this year in homeowner’s housing wealth, as the burst housing market continues to slide back towards the pre-bubble trend level. Analysts say we may see another $1 trillion loss the rest of this year.

Equally important, surveys show that businesses understand perfectly well that they shouldn’t expand faster than consumers’ ability to buy their stuff. But somehow, this simple logic is lost on the folks at Biden’s table and reporters just let the unsupported talking point slide.

Tonight’s PBS News Hour had an exchange between CAP’s Heather Boushey, a liberal economist (Keynesian), who explained the real world, and Stephen Moore, from the Wall Street Journal and Club for Growth who couldn’t. [More on Stephen Moore here and here.] The latter at least conceded that businesses had money to invest and did not disagree with the economist’s explanation that the housing bust destroyed buying power. But when she explained that meant we should not be cutting government spending now when private spending has collapsed, Mr. Club for Growth switched brain sides and fell back to the talking point about businesses lacking confidence because of deficits and government regulation. It’s a wonder his head didn’t explode.

Jane is exactly right that the Club for Growth talking point is the conventional wisdom. Here’s President Obama’s Press Secretary today echoing the same Club for Growth gibberish:

We look forward to those negotiations producing — continuing to make progress and producing a bipartisan agreement that recognizes that there is common ground that can be found here to reach a goal that we all share, which is we need to reduce our deficit, not as an esoteric goal but in order to prove that we can live within our means and, by that, show — create confidence in our economy and grow the economy and create jobs.

This debate, these negotiations, again, are not just about numbers, they’re not about reducing deficits or debts as a goal unto themselves. They’re about economic growth and job creation. And the President thinks they’re very important; he’s committed to them. That’s why he has shown in his budget proposals, shown in the Affordable Care Act, that he is committed to deficit reduction, and shown by appointing the Vice President to lead these talks that his commitment remains very strong.

This is total gibberish, but it’s coming not from the most conservative economic groups in America but from the Obama team whose main argument for reelection is that they’re saner and will protect us from the crazies. Uh, those are the crazies’ arguments, Jay.

It’s painfully obvious that the America people, and particularly the middle class and working families, never mind the unemployed or struggling states and localities, have no one in the Biden talks to represent them.

Instead, those discussions include only faux deficit hysterics who won’t raise taxes on the rich and who come armed with gibberish economic views that, as we’re seeing in the UK, Ireland, Spain, Portugal and Greece, are only making matters worse with no end in sight.

The media needs to shine a light on these unrepresentative, closed door meetings and expose the Biden-led discussions for the undemocratic failure they are. The conventional wisdom about slashing core program spending is not just unpopular, its premise is economically wrong. Embracing that nonsense is hurting the country, and the public needs to see for itself how catastrophically wrong its elected officials have become.