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Governance As Bain Capitalism, Where American Workers Become Mitt’s Dog

10:29 am in Economy, Politics, Republican party by Scarecrow

The wealthy keepers of the Republican Party are in full panic mode since Mitt Romney foolishly put his brand of American capitalism on trial. Yes, he did it to himself. As soon as Romney made the ridiculous claim that his success at becoming rich from leveraged buy outs was his main qualification to be President, it was certain that his even dumber rivals would ask whether Mitt’s brand of capitalism was good for America or instead, “vultures” who were “looting” companies, enriching themselves and firing hapless workers.

Aware of the danger to the rigged game that makes a few fabulously wealthy at the expense of the many, the GOP’s financial elites must now invent fantastic narratives to defend “creative destruction”. This comes at a time when sensible voters are realizing they constitute the destruction part. What Romney helped create and successfully, ruthlessly, exploit was the enrichment of a favored few, including himself, while he and his friends became indifferent to the destruction of the middle class and American labor.

Of course, the questions Mitt himself raised are exactly what the country should be debating. After Wall Street’s self delusion and greed tanked the economy, throwing millions out of work and into fraud-laden foreclosures, the number one economic issue of our times should be whether the malefactors of wealth through financial engineering should be allowed anywhere near governmental power over the economy. Anything but a resounding “Are you nuts?!” is preposterous, so the next governance question is how do we exorcise these demons from the body politic.

The malefactors manipulated political influence in successive administrations via the heavily bribed corporate wings of both parties to bail themselves out with zero accountability. That they show little remorse and only token concern for their millions of victims only amplifies the issue’s primacy.

However he may resemble Gordon Gekko, you would think a man as clever or cynical as Romney would realize his becoming rich by putting corporate profits ahead of people while exacerbating the shameful disparity in income and wealth could become an automatic disqualification to lead a nation desperate to move in a different direction. But of course with enormous greed come enormous ego and equally enormous indifference to those who get strapped to the roof of the Mitt family wagon. As we watch Mitt-like GOP governors extend the destruction, it’s clear American labor is now Mitt’s dog.

It’s both amusing and appalling to hear Romney try to change the subject. He first whined that his rivals were attacking free enterprise or capitalism itself, and that would be “a terrible mistake for the party [no kidding!] and the country [hardly].”  Next he hid by saying this was just like Obama bailing out the auto industry, which of course Mitt had opposed. Even the Obama people could distinguish between actions designed solely to profit investors and those intended to save a strategically important American industry, its jobs and the economy. Private interests are not the same as public interests, but that’s what we should be clarifying this election. Too bad neither party seems to grasp this.

There’s a spate of right wing op-eds today asking whether Romney’s business experience qualifies him to be President. At WaPo, Robert Samuelson starts his column with that question, but then he ducks the answer when the examples from the Mitt era at Bain suggest it might not even have been a net good for business. Oh, my. So he just stops writing.

The Times David Brooks is even more embarrassed by the question and the evidence that drives the answer, so he too ducks. He diverts our attention by claiming that what we really need is not so much the CEO in politics but a President from the aristocratic class who looks to [Brooks'] God for guidance on how to govern America. I thought that was what Mitt and most of the GOP contenders were claiming for themselves. If only a just goddess actually used Zeus’ thunderbolts . . .

That leaves us with Paul Krugman’s dismissal in America is not a corporation.

But what really struck me was how Mr. Romney characterized President Obama’s actions: “He did it to try to save the business.” No, he didn’t; he did it to save the industry, and thereby to save jobs that would otherwise have been lost, deepening America’s slump. Does Mr. Romney understand the distinction?

America certainly needs better economic policies than it has right now — and while most of the blame for poor policies belongs to Republicans and their scorched-earth opposition to anything constructive, the president has made some important mistakes. But we’re not going to get better policies if the man sitting in the Oval Office next year sees his job as being that of engineering a leveraged buyout of America Inc.

More from the LA Times: Private Equity: Bad Rep, but Is it Deserved?

What Jonathan Chait Doesn’t Understand About Obama

6:55 pm in Economy, President Obama by Scarecrow

Jonathan Chait

Jonathan Chait

I suppose we should be grateful that TNR’s Jonathan Chait voluteered to write an apologia for President Obama as a way to explain to those he identifies with “the left” why Obama’s not such a bad President and to remind the “left” there were extenuating circumstances that explain the President’s failure, or refusal, to achieve what the left wanted and the country needed.

But one has to wonder: is Chait’s defense all the President’s supporters have left?  Because when Chait leaves out what really matters to Obama’s liberal critics, the piece comes off as an argument for Obama announcing “I shall not seek, and I will not accept . . .”

To assess the President’s performance, one must start with a more coherent story of what Obama and the country faced in January 2009 and what those conditions called for after eight disastrous years of the Bush presidency.  Some of us said both before and after the election that the devastation wrought by Bush on the Constitution, on the idea of government, on the rule of law and on the economy was so crippling and massive, it would likely take years to reverse it. But some things were clearly priorities and needed to be addressed immediately. Read the rest of this entry →

Krugman on the Debt Debate: Cults, Centrists and Balance

6:31 pm in Uncategorized by Scarecrow

Paul Krugman laments on his blog that the nation is suffering from “the destructive influence of a cult that has really poisoned our political system.” The cult he identifies is not the right-wing crazies in the Tea-GOP, though they’re bad enough, but the media’s unthinking assumption that the “center” between opposing positions is the responsible position.

Here’s Krugman on The Cult that is destroying America:

No, the cult that I see as reflecting a true moral failure is the cult of balance, of centrism.

Think about what’s happening right now. We have a crisis in which the right is making insane demands, while the president and Democrats in Congress are bending over backward to be accommodating — offering plans that are all spending cuts and no taxes, plans that are far to the right of public opinion.

So what do most news reports say? They portray it as a situation in which both sides are equally partisan, equally intransigent — because news reports always do that. And we have influential pundits calling out for a new centrist party, a new centrist president, to get us away from the evils of partisanship.

Krugman goes on to note this media habit means there’s no penalty for extreme behavior, so we get crazier and crazier results. I agree with that, but I think a related problem here is how the media is allowing Mr. Obama and others to define the responsible center.

In the debt reduction negotiations, the President keeps arguing for a “balanced” approach that includes both spending cuts and revenue increases. He wants the media to regard that definition of “balance” as the responsible centrist approach, and I think some have bought that view (eg, see this NYT editorial).

But the country’s actual center does not agree. As Jon Walker and David Dayen’s posts on polling results keep telling us, nothing the President and Democratic leaders (let alone the Republicans) are proposing is close to the political center.

All the polls show Americans strongly oppose cutting Social Security, Medicare and other programs/benefits for the poor and middle class. Instead of (and not in addition to) cuts, they support increased revenues, making the rich and large corporations pay more in taxes if needed to help lower deficits. Somewhere between 60 and 80 percent of Americans, including both parties and independents, consistently support those views. The Administration’s proposals are extremist.

Nor does Mr. Obama have coherent definitions of “balance” or “shared sacrifice.” He defines debt reduction “balance” as requiring the rich to give up a little something — a few tax breaks — so that the non-rich — students, the elderly, the poor, etc — don’t have to carry as much of the burden of deficit reduction. But there’s no logical connection between these two categories.

It’s either fair or not fair to cut student loans, or food stamps, or health and safety agencies, or Social Security or Medicare benefits for the elderly. For example, since [all Women and Children's program beneficiaries and] most Social Security/Medicare recipients depend heavily on those benefits to avoid poverty, there is no credible argument for cutting or delaying their benefits. If anything, we should be increasing those benefits and providing them earlier.

That fairness has nothing to do with whether or not hedge fund advisers get a tax break or corporate jets get different deductions. There’s no level of increased taxes on millionaires or hedge fund owners that would make it okay to punish seniors or to reduce benefits for women and children on the edge of poverty.

So Mr. Obama is talking cruel nonsense when he argues for “balance.” These elements don’t “balance” each other.

The current federal budget is not balanced, but this imbalance is not how Washington understands it. A balanced budget would pursue the level of federal spending we need to move the economy strongly towards full employment. By that measure, we need to be spending more.

[Seen in this light, state budgets are not "balanced" when they lay off tens of thousands of workers and close essential state services. They are extremely underfunded, primarily because the federal government is failing its responsibility to make up for declining revenues and higher safety net spending resulting for a national "lesser depression."] Many other government programs warrant either more or less spending, depending on their importance and efficacy in furthering the public interest.

When is the last time you heard a reporter ask the President or Congress how their spending proposals met these needs?

[To be sure, we need to reform taxes,] but it would be helpful to consider the severely unequal distribution of wealth and income that has allowed almost all of the increase in national wealth over the last two or three decades to be captured by a tiny fraction, the richest people in the country. The percentage of wealth and income left to the poor, middle class and average workers has been virtually stagnant or worse.

Why aren’t reporters asking politicians whether their notions of “shared sacrifice” would reverse or exacerbate that egregious maldistribution? If they examine these proposals, they’d report that all of those under consideration — from Simpson Bowles through Harry Reid’s surrender proposal to Boehner’s predator enabling — would make matters worse. That’s not “shared sacrifice.” It’s legalized theft, systematically transferring more wealth from the poor and middle class to the wealthy.

So it’s not just the media’s cultish addiction to some perverted “centrist” view. It’s also the media’s unwillingness to explain that when the President and Congress use terms like “balanced” or “shared sacrifice,” they don’t mean what you think they mean.

[Wed. a.m. edits]

NYT’s Ross Douthat Illustrates Paul Krugman’s Point on False Equivalencies

7:42 am in Uncategorized by Scarecrow

Paul Krugman’s blog today laments another example of false equivalence, when he catches Clive Crook claiming that if the shoe were on the other foot, Democrats would behave like the Tea-GOP. They’d take the US credit to the brink, holding the economy hostage to impose the Democrats’ policy objectives, so they’re just as bad as the Tea-GOP crazies who have created the debt limit crisis.

From Krugman’s blog, Clive Crook Is Drowning America:

Crook accurately describes the destructive behavior of the GOP and how it’s making the country ungovernable. But does he then condemn the perpetrators? Not exactly. Instead, he calls a plague on both houses:

If positions were reversed, Democrats would feel just as entitled to disable, by any means necessary, their enemies’ legislative accomplishments.

Would they? Did they in fact behave like that when Republicans held the White House? No, they didn’t; Crook equates real GOP behavior with an imagined Democratic future. . . .

The NYT conservative columnist, Ross Douthat, then illustrates Krugman’s point. Right across the NYT op ed page from Krugman’s regular Monday column is this pernicious example from Douthat.

Some conservatives first assumed the Norwegian killings were done by Muslims, but now Ross is struggling to deal with the right wing political preferences and writings of the alleged killer of over 90 people. To be sure, Ross’s column acknowledges the links between obvious terrorism and right wing, Christian extremists. But Douthat can’t just make that point; he’s got to drag a Democrat into the same sewer.

In his opening paragraphs, Douthat insists on reminding us first that his right wing blogger buddies once made jokes about how Al Gore argued against the destruction of the environment. And if you cherry pick Gore’s quotes, you can find rhetoric that might have been echoed in the writings of the Unabomber, Theodore Kaczynski:

Was it the bearded hermit who hailed “isolated pockets of resistance fighters” for struggling against modern society’s “assault on the earth”? No, that would be the former vice president. Was it Kaczynski, the mathematics Ph.D. turned mad bomber, who complained about the “destructive” impact of bringing a child into “the hugely consumptionist way of life so common in the industrial world”? No, Gore again.

Well, that settles it. The former Vice President of the United States wrote an “eco-manifesto” and talked like an eco terrorist and stoked mass murder, because he thought human resource extraction was “destructive,” a point I thought was undeniable. So when you think about Norway, remember what Al Gore said.

Of course, Douthat then denies he’s trying to make the connection he just spent the first three paragraphs making.

Having planted that little gem in his readers’ heads with his opening paragraphs, Douthat is now cleared with his buddies to sound reasonable by admitting the undeniable — that the suspect in the Norway murders was reportedly a violent, right wing Christian extremist instead of the Muslim some of them first assumed.

I’m wondering if the NYT op-ed editors even raised an eyebrow when they saw Douthat’s “right-wing monster.”

ObamaCare vs. RyanCare: Scarecrow Gets Confused With “Serious” Strawmen

5:02 pm in Economy by Scarecrow

Ever since Jon Walker and I pointed out the real and superficial similarities between Paul Ryan’s proposed RyanCare for future seniors and the Affordable Care Act (ACA) structure for non-seniors, numerous pundits have been trying to deny either the similarities or the differences.

For example, Ryan’s supporters are in denial that RyanCare requires a mandate, even though he admitted — just as the logic suggested — that he’d require future seniors to purchase a private health insurance plan from a government-overseen exchange. And ObamaCare supporters are in denial that their ACA insurance exchanges rely on pretty much the same faith in the ability of a mostly free private insurance market to sufficiently control health care costs and hence insurance premiums.

We’ve tried to categorize and distinguish Medicare, RomneyCare, ObamaCare and RyanCare — see, e.g., here, here, here, and here — some have tried to grapple with the distinctions, and others have tried to fuzz it all up to serve whatever agenda they had.

The latest effort to make something out of the similarities is from the Washington Post’s Steve Pearlstein, who provokes Paul Krugman into describing Pearlstein as a Very Serious Person, — i.e., someone who gets it wrong.

Krugman and DeLong (responding to Mankiw) address the question, “are non-seniors better off under the ACA/ObamaCare’s subsidized exchanges than they would be without the ACA?” If those are the only choices, their answer is “yes,” though I don’t think they’ve confronted the numerous “affordability” arguments Marcy Wheeler made when ACA was being debated. But let’s assume they’re correct. That still leaves the large question about how well the exchanges can control costs unanswered.

The Administration, Democrats and ACA supporters insisted the exchanges would work to control health care costs because competition within the insurance market would control prices while maintaining quality care and service. But I understand Paul Ryan to be making the same argument for RyanCare: his private insurance market exchanges will make health care affordable, he claims, because future seniors exercising choice when shopping in the insurance exchange markets will benefit from private market competition. Both rely on a mostly free market theory.

Either this claim and its faith in markets are plausible or they’re not. My concern is that when Paul Krugman (or DeLong citing him) talks about the merits of Medicare versus RyanCare, there’s a reminder that ever since Ken Arrow, economists have known the competitive market argument doesn’t work in this industry.

Even ignoring the already huge concentration in the insurance industry, and increasingly so in the hospital and other provider sectors, none of the elements required to make an industry amendable to effective competition and efficient market pricing exist. Therefore, RyanCare can’t achieve the cost savings Ryan claims. But government-sponsored systems like Medicare, because they can reduce administrative costs, and because they can exercise single-buyer market power that individuals in the exchanges will not have, can do better — and have done better, here and in Europe.

If that’s true, then it’s not enough for economists and other ACA supporters to argue the ACA should be better than not having insurance at all; they need to explain why Arrow’s analysis and real-world experience do not apply to the market-based claims for the ACA exchanges, just as they do to RyanCare. And if this is a fatal flaw for RyanCare, isn’t it also a fatal flaw for the exchange structure of ACA?

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.

Economists Debunk Hysterical NYT Story on S&P Credit Downgrade Threat

2:22 pm in Uncategorized by Scarecrow

The lead front page story in today’s delivered New York Times reported that the stock market fell after the rating firm S.&P. threatened to downgrade the US credit rating unless the US got its spending under control.

The GOP, led by noted economist Eric Cantor, was quick to predict a US economic collapse unless we used the debt limit vote to eliminate Medicare.

So naturally, I immediately slashed my personal spending by cancelling my Times Saturday and Sunday delivery subscription, hoping to save the economy from imminent collapse. That seemed to help, as the stock market was back up today. The market knows everything, it seems.

Not knowing what else to do, I was later greatly relieved to learn that having grasped the seriousness of S.& P.’s warning, the Times invited several economists to explain the impending doom. Here’s a sample of what they said.

First, Tyler Cowen seems to think S&P was right to warn us of our profligacy, but he worrys the stock market didn’t panic enough:

The fall in the stock market on Monday just wasn’t big enough to put a scare into most of these people. Few political leaders see realism as a winning political message, and making realism scarier, as the S.&P. announcement did, won’t get them there easily.

It’s a common argument that the U.S. need not worry about its borrowing because interest rates on Treasury debt are so low. That’s a mistake. The low rates mean that investors expect to be paid back; they don’t mean that U.S. debt levels are healthy.

So, the market went down because investors think the US can pay its debt obligations, but the market isn’t smart enough to know it won’t. Huh.

Next, Mark Thoma thinks we shouldn’t be stampeded into hurting the vulnerable when there’s no immediate threat:

. . . Don’t let the downgrade allow those with wealth and power to push through the wrong solution. . . .

The main worry about the debt is that, at some point in the future, interest rates will rise as the world becomes reluctant to lend more to us. A rise in interest rates would lead to reduced investment, growth and employment. So far, however, bond markets show little sign of worry and interest rates remain low.

So if there’s no immediate threat, what’s going on? Barry Ritholz says he stopped paying attention to S.& P.:

After Standard & Poor’s missed the greatest collapse in history – indeed, they helped create it by rating junk mortgage backed securities Triple AAA – they are now over-compensating. As I mentioned on The Big Picture, there is an old Wall Street joke about analysts: “You don’t need them in a Bull Market, and you don’t want them in a Bear Market.” That especially seems apt with regard to S.&P.

The deficit has been with us for a long time. Since investors are continuing to lend money to Uncle Sam at exceedingly low rates, there does not appear to be any real fear of a default. That is what matters most to bond buyers — and it why I never care what S.&P. thinks on this.

Next, L. Randall Wray thinks this is just S.& P. doing politics instead of credible ratings based on sound economic analysis:

Mind you, this has nothing to do with economics, government solvency or involuntary default. A sovereign government can always make payments as they come due by crediting bank accounts — something recognized by Chairman Ben Bernanke when he said the Fed spends by marking up the size of the reserve accounts of banks.
Similarly Chairman Alan Greenspan said that Social Security can never go broke because government can meet all its obligations by “creating money.”

Instead, sovereign government spending is constrained by budgeting procedure and by Congressionally imposed debt limits. In other words, by self-imposed constraints rather than by market constraints.

And Yves Smith says S.& P. should be embarrassed:

The United States is simply not at risk of default. Default is impossible for a sovereign currency issuer.

The Standard & Poor’s rating firm should be embarrassed. If there is any political judgment at work here, it is S.&P. falling for politically motivated scare mongering. But given its track record with mortgage securities and collateralized debt obligations, why should we be surprised to see a rating agency relying on conventional wisdom rather than analysis?

Yves and many others note that in addition to complicity in misrepresenting the risks of mortgage-based securities, the rating agencies were consistently wrong about Japan’s experience and that repeated ratings downgrades had essentially no effect on Japan’s ability to borrow at low rates.

There are more derivise opinions from James Galbraith, Paul Krugman, Dean Baker and others listed at Naked Capitalism.

The bottom line is this: The New York Times got duped by the Beltway conventional wisdom driving deficit hysteria. The credit rating companies have little or no credibility and suffer from massive conflicts of interest and their own political agenda; S.& P.’s views are particularly suspect.

The economic theory they’re hawking is wrong and the available evidence contradicts them. And plenty of people easily available to the Times knew this, but the Times neglected to ask them before it wrote its misleading story. The only thing worse is to have the Administration send Secretary Geithner to implicitly confirm the flawed theory by promising to do what the deficit hysterics want.

Given that track record, there is only one thing left for the Times to do, as it prints a retraction and apology to its readers: fire the incompetent editors who went with the phony scare story.

Krugman Exposes GOP Ryan’s Unicorn Budget, Catches Heritage Burying Number

8:26 pm in Uncategorized by Scarecrow

Paul Krugman spent Wednesday combing through the details of Tea-GOP genius Paul Ryan’s budget and in a series of blog posts utterly destroyed the Ryan budget’s phony math, implausible assumptions and unicorn forecasts. Kudos to MSNBC’s Rachel Maddow for picking this up.

Krugman once called Ryan a “flim flam” man, a virtual con artist, and yesterday, he proved it. Let us count the ways.

1. Beginning Tuesday with “Groundhog Day,” Krugman warned of a giant bait-and-switch in which the claimed goal of reducing the deficit would provide cover for what in fact would be a proposal not merely to privatize Medicare (or Social Security) but to do so in a way that actually increased costs, if not to government, then for beneficiaries. He was right.

As we’ve been saying all along [see here, here, and here], Ryan’s Medicare mandate plus vouchers would lower government costs only by shifting even more uncontrolled costs to seniors, disabled and poor people, eventually forcing them to forego treatment for which they could not afford insurance.

2. In the 2022 Medicare Crisis, Krugman echoes Matt Yglesia’s point that Ryan’s Medicare mandate and voucher system sets up an unstable, indefensible discriminatory system for seniors. Starting in 2022, those already over 65 would continue receiving traditional full Medicare benefits (and have the choice of getting the equivalent from private insurers via Medicare Advantage) but those just reaching 65 from then on would receive only private insurance that, year after year, covered less and less of the costs and care as older retirees. Ryan assumes the “savings” from this discriminatory treatment would be accepted by the disadvantaged group and that Congress would ignore the unfairness.
Read the rest of this entry →

Tea-GOP Craziness: Will Someone Please Have Our Political Leaders Committed?

4:20 pm in Uncategorized by Scarecrow

In the 1947 classic, Miracle of 34th Street, most of the establishment goes through what seems to us as a crazy procedure of trying to have Santa Claus committed to a mental institution. Mr. Kringle’s offense is that he thinks it’s a good idea to be kind to people, especially children, and that you shouldn’t lie about who you are.

But “Miracle” isn’t about whether “a nice old man” is actually Santa Claus. As the movie unfolds, we learn the person who is actually insane is a close-minded authoritarian, an insecure hack psychologist who is actually a bully, dishonest, indifferent to human feelings, and mean-spirited and who insists that anyone who doesn’t share his delusions should be fired, persecuted and have their rights stripped away. And with the help of a mindless system, an unprincipled political hack judge and a unthinking executive, he might have gotten away with it. In the Hollywood version, however, a government employee — a postal worker — returns us to sanity by showing us overwhelming support for Mr. Kringle.

We’re watching the same plot in the US Congress, except it’s real with no guarantees of a sane, happy ending. We see the arrogant Tea-GOPers bullying and threatening everyone — women, children, the old and sick and poor, workers, the economy and the government itself. What’s astonishing about this real life drama is no one in the so-called category of “adults” — not the inept Democratic leadership, nor the feckless “pro-business” White House, nor the complicit media — has the courage to say, “Stop! This is insane!”

Friday’s New York Times tells us the White House is meeting with Tea-GOP representatives, who, after accepting a $4 billion bribe, just condescended to postpone a government shutdown for two weeks. The White House will next offer them several more billions of spending cuts in the delusional hope that with these and other concessions, the bullies will allow the US government to function for a few more months. What are these people thinking?

In poll after poll, and with the feet and voices of hundreds of thousands of protesters in Wisconsin and a dozen other states, the American people have said very clearly that they do not want to cut spending for Social Security, Medicare/Medicaid, education, environmental protection. They’ve repeatedly said that the economy and jobs, not slashing deficits are the country’s priority. But Mr. Boehner and his Tea-GOP ignore this.

When pushed on what they would cut if deficits were the priority, they consistently cut defense and support raising taxes on the rich — exactly the opposite of what the Tea-GOP and Obama just did.

Americans are also clear they don’t support punishing teachers or other public workers; they oppose threatening teachers with layoffs if they don’t give up their rights. They’re clear they support the right of workers to group together to bargain for their collective interests, just as corporations do to protect the interests of many shareholders (theory) or a few well-paid executives (practice).

At the same time, prominent economists warn us that the budget cuts Americans wisely oppose will harm the economy, slow the recovery and put hundreds of thousand of people out of work. Other data consistently shows there is no basis for the Tea-GOP propaganda that economic investment is stalled because of lack of confidence regarding the deficits; instead, all the surveys show it’s lack of demand — consumers don’t yet have sufficient money, job security, or savings to buy enough of the products businesses hope to sell to justify new investment and hiring.

And Friday’s more hopeful employment report is only that: hopeful. As Dean Baker notes, even with this news, at the current rate it will take about 14 years for employment/jobless levels to get back to normal. And yet the Tea-GOPs proposed cuts would destroy another 700,000 jobs from federal actions alone, not to mention another half million or so jobs lost from state budget cuts made necessary because the same Tea-GOP dopes won’t allow the federal government to do what it’s supposed to do in such emergencies. That’s insane.

With the exception of the McCarthy era, I can’t remember a time when the facts pointed so clearly to mass public hysteria, denial and delusion among those who are driving government policies.

We’re going through a period of dangerous craziness that can severely damage the country and harm millions of people. Along with worsening air and water quality, women and children’s health care, education and research and dozens of other worthwhile services, these idiots would even cut funding for poison control.

It’s time to stop listening to these close-minded, authoritarian bullies. It should be obvious to any but the most severely deluded that what their followers in Congress and the states are doing is nuts. And yet Democrats and the White House keep indulging these fantasies, while the media keeps reporting this as though it’s just politics and nothing is wrong.

Update: AlterPolitics, Univ. of Maryland Survey of what Americans would do to change spending/budget priorities

Sunday Talk Shows: Making America Dumber One Week at a Time

12:32 pm in Media by Scarecrow

There is no valid journalistic reason for CBS, NBC and CNN to continue their Sunday Talk shows. (There is still hope for Ms. Amanpour’s efforts to bring some intelligence to ABC.)

What should they have talked about today? Aside from Middle East revolutions, recent domestic news has been dominated, as Frank Rich notes, by Tea-GOPer assaults on any/all government functions that can address income inequality or rein in corporate misconduct. The latter have all been disguised as “necessary” spending cuts to reduce “unsustainable” debts nationally, or as reductions in public worker’s wages, benefits and rights at the state level.

So it would make sense for the shows’ hosts to have at least a basic grasp of the most important budget and fiscal facts, even if they insist on interviewing only Tea-GOP governors and anti-labor zealots with only a lone labor representative invited onto NBC after viewer protests.

Here are a few facts the hosts might have understood (or at least known what was being argued by prominent critics) before CBS’ Bob Schieffer interviewed NJ Gov. Christie or NBC allowed GOP governors Barbour, Haley and Walker to spin in unison their poll-tested talking points:

1. The current budget crises in many states were not caused by runaway wages and benefits for public workers. While there are examples of excesses created by public corruption, which no one defends, the large state budget deficits are almost entirely due to the Great Recession, which was brought on by federal regulators — Greenspan’s Fed, SEC, OCC etc — who recklessly ignored predatory lending, fraudulent securitizations, a housing bubble and its inevitable collapse — and by the financial industry’s reckless self-immolation. Shouldn’t the governors have been asked if they even understand this most basis cause?  . . . Read the rest of this entry →