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While Congress, White House Play With Themselves, Missouri Floods, Arizona Burns, etc.

8:17 am in Uncategorized by Scarecrow

Wallow Fire, AZ (photo: NASA Earth Observatory image created by Jesse Allen and Robert Simmon)

We interrupt our coverage of the ongoing assault on American Democracy, illustrated by the misguided discussions in Congress and Joe Biden’s dining room to decide how shamelessly to break faith with the American people while tanking the American economy, to remind folks that Mother Nature is indifferent to how careless our elected officials have become; she moves on relentlessly.

Months ago, we watched unprecedented flooding in Tennessee; weeks ago, we watched unprecedented tornadoes devastate Alabama, Missouri, and even Massachusetts; recently we’ve been following record flood levels along the Mississippi and Missouri Rivers. And for months, much of the Southwest has been suffering from record drought. That’s not over, and it has now enabled huge wild fires in Texas and Arizona and the border areas with New Mexico.

From a local firefighter’s blog in the area (h/t Sher)

A raging forest fire in eastern Arizona has scorched an area larger than the size of Phoenix, threatening thousands of residents and emptying towns as the flames raced toward New Mexico on Wednesday.

The 607-square-mile blaze has destroyed 11 buildings but details or locations were not available, U.S. Forest Service officials said. It has blackened about 389,000 acres, a swath larger than the state’s capital at 519 square miles. . . .

Winds in the area were expected to gust up to 35 mph Wednesday. Officials in Catron County, N.M., told residents of Luna to be prepared to leave if winds push the blaze into western New Mexico.

About half of the 4,000 residents who call Eagar home were forced to leave Tuesday as the fire licked the ridges surrounding the area. The town’s remaining residents and those in neighboring Springerville worried as they awaited word of whether they will have to flee, too.

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Jared Bernstein’s Advice to Joe Biden: Focus on Jobs, Not on Deficits

10:32 am in Uncategorized by Scarecrow

DFH Jared Bernstein (photo: fling93)

In a world supposedly governed by 11 dimensional chess, we find unusually straight forward advice directed at the Obama Administration on how to react to the dismal unemployment numbers.

From Joe Biden’s former economic adviser, Jared Bernstein:

Someone just asked me, “how does the White House pivot from targeting deficits to targeting jobs?”

How’s this? “Based on new information, we are now pivoting from targeting deficits to targeting jobs!”

I interpret that to mean: Either refocus the Biden dining table chats on jobs or send everyone home before they damage the economy even further.

The White House now faces the entirely predictable problem that a critique from Obama’s possible rival, the policy chameleon, Mitt Romney, is exactly correct: The Administration has failed to achieve its stated economic policy objectives. The only part Mitt left out is that the Administration failed because they pulled their punches; they feared and listened too much to charlatans like Mitt Romney and the nonsensical views of his fellow Tea-GOPs, not to mention the deficit hysterics in his own party.

If that’s how this White House wants to govern, the American people will know whom to blame in 2012. A rational choice in a Romney versus Obama matchup would be “no.”

More from Paul Krugman
: The Mistake of 2010 [aka 1937]

And Krugman/DeLong show why it could get worse.

From Calculated Risks: The Graph everyone should be following.

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.

NYT’s Harwood: Democrats Should Cut Medicare So Republicans Don’t Get Blamed

6:30 am in Uncategorized by Scarecrow

That’s not the title of John Harwood’s NYT column today, but it might well have been. In a typical example of sloppy, one-sided Beltway thinking, Harwood opens with,

Soon enough, Democrats will have to identify new Medicare cuts they can support.

. . . and having swallowed whole that false Tea-GOP talking point, he explains why the Democrats must eventually not just cut federal spending on Medicare but do so by cutting benefits. His “logic” goes like this:

1. I understand that Medicare costs are rising because private health care costs are rising too fast for the whole country . . . but let’s forget that’s the real problem — implying a very different set of solutions aimed at the structure of health provision in America, not Medicare — and forget that ignoring it will still leave the economy, the nation and especially seniors in trouble. Instead let’s pretend the problem is too many old people and that the government can’t afford to provide them the same health care as they get today.

2. I understand that we pay providers — hospitals, doctors, drug makers, device makers — too much, but the Tea-GOP will oppose efforts to rein in those private costs — they only care about government spending — so we can’t fix that.

3. I understand that the Affordable Care Act contains an Advisory Board to identify and encourage ways to provide equal or better care at lower costs, but the Tea-GOP says that’s a “death panel,” so we can’t do that or expand its reach.

4. I understand that the ACA exempted hospitals from the Advisory Board for the first ten years [another WH deal], but since the Tea-GOP opposes the “death panel” Board anyway, we can’t fix that.

5. I understand that we’ve given special breaks to drug makers, exempting them from negotiations when the Bush-GOP passed the Medicare Part D drug benefit, but since the Tea-GOP opposes any government takeover, we can’t fix that.

6. I’m supposed to know, but neglected to mention, that Medicare provides care at lower costs than private systems, and the CBO just explained that moving to Paul Ryan’s voucher plan to pay private insurers will increase seniors’ health costs by about $34 trillion over 75 years, but that devastating and inconvenient fact just embarrasses the Tea-GOP, so let’s not mention it.

7. So that means we can only cut costs by reducing benefits. We can make seniors pay more for their doctors, “saving” [shifting] $240 billion, or we can make them wait until they’re 67 before getting benefits, saving [shifting] $124 billion, or we can just stop paying for some benefits they need and save [shift] even more. See? Saving [shifting] on Medicare is easy! We know non-Pod Democrats oppose this, and the American public strongly opposes and thinks this is morally wrong. But that’s what the Tea-GOP insists, so that’s what we Beltway grownups say we have to do.

8. The Tea-GOP won’t compromise on anything sensible, so it’s up to the Democrats and the White House to make all the concessions.

9. Everyone, including all of us adults, know this to be true.

10. Therefore, the Democrats are just stalling about cutting Medicare by hundreds of billions, but sooner or later, they’ll do what Mitch McConnell wants.

Now, John Harwood is a decent enough fellow, trying to be reasonable. An adult, as they say. But he’s just expressing the Beltway mindset in a nutshell. That leads me to two conclusions:

First, we need live cameras and reporters at Joe Biden’s place. Open up those discussions and let the American people watch the “adults” and listen as the Administration/Dems and Tea-GOP leaders, the Pods and the Zombies, explain their proposals and bargain away protections for senior citizens while they protect the wealthiest of the wealthy and the most destructive of the corporate looters and avoid facing the underlying cost problem.

Obama once said the health care reform debate should be televised. Good idea! We need more adult television. How about asking for that, John.

Second, America should have a party. Invite the austerity-suffering, enraged, courageous and unrepresented populations of Spain, Ireland, the UK, Egypt, Tunisia, Syria and have them occupy Capital Mall and Lafayette Square until this stunningly irresponsible, unresponsive, undemocratic government resigns. We could phone in pizzas and watch on BBC or Al Jazeera.

Or we could just do it ourselves.