You are browsing the archive for President Obama.

Wisconsin and the Case of the Dogs That Didn’t Bark

11:12 pm in Uncategorized by Scarecrow

My heart goes out to the brave, democratic citizens in Wisconsin who worked tirelessly to recall six Republican State Senators, managing to depose two and coming agonizingly close (barring fraud) on a third. They deserve our respect and thanks and our continuing support as they move to the next phase to protect Democratic State Senators.

Those who’ve been paying attention know how important these races are, both to slow down the vicious anti-government, anti-worker movement in Wisconsin and to signal to other states and Congress that they do not have to submit to a group of extremist thugs stripping away their rights, their livelihoods and their dignity. They can fight back.

If there were a worthy national party lending its full support to their Wisconsin counterparts, it might have made a difference. We will never know. Sure, the national organization helped in various ways. But it’s obvious that what the state folks did not want was heavy national presence, and in particular, the “help” of this supposedly Democratic President. Why was that?

I believe that what the folks on the front line in Wisconsin needed most was a united national movement amplifying their grievances and demands. They needed a strong national voice framing a very different, more supportive message than the one they’ve been getting from their President and national Democratic leaders. What they got instead can only have hurt Wisconsin’s efforts.

The consistent message from the national Democratic party and President Obama is that “this is the era of austerity.” The President repeatedly told the nation that government had to tighten its belt, that government debt was a serious problem standing in the way of economic growth and jobs. He said we needed a “grand bargain” that reduced government spending on important programs by trillions of dollars with only limited contributions from the wealthy and corporations. Although he claimed to favor worker rights, he unilaterally froze federal worker salaries. And then he told the elderly that they needed to accept “adjustments” in their pensions and health care after extending tax breaks for the wealthy.

With such a profoundly misguided and destructive message coming from the President and national leaders, it must have been particularly difficult for Wisconsin citizens to explain why voters should recall Republican State Senators for taking positions their President and party were embracing in Washington. To be sure, Wisconsin’s Tea-Party Governor is a fraud, and his party’s actions have been abusive and excessive in slashing state programs and benefits. But Walker’s budget goals and methods are consistent with those of his national counterparts whom Mr. Obama and Democratic leaders have now promised to meet half way in slashing federal programs and benefits. There are few at the national level, and none at the top, making the counter argument about how offensive and obscene this is.

The Republicans in Wisconsin and other battleground states claim they’re on a holy mission, to rid society of the unworthy and profligate, that ripping away public workers and functions is both fiscally necessary and morally righteous. It’s a false economic theory, a worse creed.

Our national leaders should have been reminding those fighting in the states that they were not to blame for the budget crises in their state capitals. Instead, men like Greenspan and Bernanke and Geithner and dozens of other federal regulators who were supposed to be watching the financial/banking sector either fell asleep on their jobs or willfully looked away, while Congress passed laws pretending that fraud and looting were okay if it was called “financial innovation” and “market making.” The regulators failed the country and the looters plundered, but thanks to this President, they’re still in power or presuming to lecture us on television. And now men like Boehner and Cantor and McConnell — and yes, Warner and Durbin and Lieberman are preventing desperately needed federal money from helping the states deal with the damage.

The truth is that President Obama and the national Democratic Party undercut the Wisconsin fighters by adopting harmful Tea-GOP talking points and repeating them night after night on national television. While the national Tea-GOP reinforced their state counterparts’ message at every turn, the national Democrats sabotaged the Wisconsin Democrats’ message.

Wisconsin Democrats didn’t need the President or Senate Democratic leaders to come to Wisconsin. What they needed were national leaders fighting for their cause, for their pro-government principles, for recognition of their rights — in Washington. They needed a President making that fight in Washington and carrying that message to the nation.

But the President and his party have abandoned that fight in D.C., and so abandoned those fighting in Wisconsin. And that’s why, despite heroic Wisconsin efforts, the good guys fell short. No one should count on or follow these corrupt leaders again, ever.

If you’re looking for new leaders, look to Wisconsin and other states under siege, where working people understand what’s going down and aren’t afraid to fight back.

Tom Friedman’s Fantasy Dream Is America’s Nightmare

9:30 pm in Uncategorized by Scarecrow

Tom Friedman seems to alternate between days with provocative ideas that challenge conventional wisdom, for better or worse, and days with fantasies built on absurd notions, massive ignorance or delusion, which if implemented would be catastrophic. He’s equally certain and proud of both, so you have to be careful.

Judging by today’s New York Times column, today is Tom Friedman’s catastrophic fantasy day.

In a column in which he fantasizes a joint media appearance with Speaker Boehner and President Obama, Friedman dreams of the two men making humble concessions, then walking hand in hand into the White House to negotiate a “grand bargain” that resolves all the country’s outstanding budget deficit/debt issues. Everything’s on the table, and both sides are earnestly committed to bargain in good faith and reach a reasonable compromise. On seeing this, the market immediately rises a zillion points.

There’s only one problem. The deal Friedman assumes these men would likely produce could wreck the economy and harm millions of people.

Like all too many in Washington, Friedman believes that a grand bargain that dramatically reduced near- and medium term deficits and long run debt would actually help the economy and benefit the nation’s citizens. But instead, it would do exactly the opposite. That’s because the prevailing ideas for what goes into this grand bargain do not include solving any of the nation’s actual problems. And though the debt crisis is phony, the proposals are only superficially about reducing debt. But they have everything to do with crippling the federal government’s ability to function in the public interest.

What Mr. Boehner’s Republicans want is not a trimmer, more efficient government; they want a government that can only support a much smaller public sector and is significantly weaker in dealing with the private economy and those it affects. They want a government so weak it cannot threaten the ability of the financial sector to continue looting the economy and so politically constrained and captured it cannot induce industries to internalize the costs of health, safety and environmental measures needed to protect the public from harm; it would function only to enable what industries want. They want to protect the rich from taxation and do nothing to prevent the relentless transfer, through unfettered non-competitive markets, of the nation’s income and wealth from the bottom 90 percent or so to the extreme wealthiest individuals and corporations, whose actions would become essentially unaccountable to consumers, shareholders and investors.

Against this massive looting, wealth transfer, and frontal assault on the public interest, it’s not clear what values President Obama wants to protect, even assuming he’s competent to do so. He doesn’t seem committed to tax equity, seems little concerned about massive inequality, has rarely if ever mentioned the near 15 percent poverty (nearly 20 percent of America’s children relying on government assistance). He clearly does not favor reducing the power or influence of the financial sector that has ravaged the economy, nor has he fought to check other politically powerful industries and corporations that continue to victimize the public.

Further, Mr. Obama refused to consider any form of universal health care that could effectively challenge rising private health care costs. That’s a principal driver of long-run spending. Mr. Boehner’s Party, of course, regards such solutions as evil socialism. So their “compromise” could remove people from the program by making them wait longer.

On top of this, neither Mr. Obama’s team nor Mr. Boehner’s Party has an intellectually coherent grasp of economics, a credible framework for understanding the nature of our current economic problems nor any affinity for the only solutions known to be workable. Indeed, almost every statement both men make on the economy is wrong-headed and often absurd.

In short, any negotiation between Mr. Obama and Mr. Boehner is highly likely to produce a worse mess, as best, or possibly a calamity. Their deal would likely harm the economy or even produce a recession.

If their grand bargain succeeds in reducing government spending by $4 trillion or more over the next decade, it will slow growth, increase unemployment, cause even more foreclosures, throw more people into poverty, increase the number of uninsured, decimate state and local governments. It would leave the country’s future poorer from a serious deficit in investments in everything a country needs to prosper. And the huge inequities in American life will remain, with an even weaker government available to address them.

Dear Tom: Be careful what you ask for. There’s no one protecting the public interest in that grand bargain. So please use your next alternate day to point this out. — John Chandley (Scarecrow).

Update: Dean Baker has a dream.

New York Times’ Panic Reporting Gets S&P, Markets 180 Degrees Wrong

9:14 am in Uncategorized by Scarecrow

As we watch the various markets react to recent events, it’s essential we keep our heads straight on some basics, because the media, and particularly the “news” reporters and editors of the New York Times, have got almost everything backwards.

You can ignore almost everything you’re hearing from Washington politicians, including the White House, and Beltway media. Here’s what knowledgeable economists are telling us.

1. The US government is not about to default on its debts. A nation with it’s own currency and whose debts are all in its own currency cannot be forced to default unless crazy people force it to default. The US can always print or mint more dollars to pay off debts denominated in dollars. S&P ignored this fact. The only way the US can be forced to default is if the government is taken over by crazy people. Unfortunately, there are a lot of them, but S&P mumbled when it should have clearly called out the crazies. But S&P and the non-crazies have also bought (or are trying to sell) other economic snake oil.

2. The markets do not believe in the S&P fairy tale that the US is in danger of defaulting on its debts. The markets are saying just the opposite. Forget the stock market; it’s the bond markets that matter here. In those markets, bond prices are rising and interest rates are falling to very low levels. That tells us investors all over the world think US Treasury bonds are safe, so they are buying more bonds, not selling them. S&P’s analysis is gibberish.

3. The stock market is signaling the economy is in trouble; it’s not saying we have a debt crisis. [See Krugman links here] The Commerce Department revisions to GDP signaled that the US economy was falling into a depression in 2008 and only barely escaped in 2009, after the stimulus and Federal Reserve actions started to kick in. The recent jobs numbers tell us unemployment is not likely improve much for several years, which leaves parts of the economy in a near depression. The debt debates are telling markets there’s no rational discussion in Washington about how to boost the economy. Given that and more, it makes sense for stocks to be tanking.

4. The debt reduction hysteria is making the economy worse and is self-defeating. The debt hysteria is the economic snake oil everyone from the President and his advisers to Pete Peterson and Simpson-Bowles to the Tea Party are selling. With the economy still on the edge of recession, and parts in near depression, the only thing keeping the economy afloat is federal spending. It may need that support for years, because the recession was much deeper than everyone thought. But if federal spending declines, as the debt hysterics are demanding, and state/local government spending continues to tank, then GDP must fall. It’s just math. As the economy declines, there will be less collected in taxes, and more paid out in safety net spending — unless a cruel nation slashes that too — so the net result could be higher deficits, or at least less debt reduction than they expected.

5. Today’s consumers can’t revive the economy by spending more, because they’re still recovering from losing $6-7 trillion in housing wealth. Housing prices pumped up during the bubble are still falling (why hasn’t Greenspan been banished?). And lately, the private sector has lost trillions more in 401k etc, savings as stocks crash due to expectations of a continuing weak economy. Only the federal government can raise spending to boost the economy.

6. Enhanced trade can’t revive the economy either, because other nations are also struggling. We’re running huge trade deficits, buying more from others than we sell to others. But our trading partners are also struggling to keep their economies from declining, and they’re making it worse with their own austerity. Many of Europe’s banks are essentially insolvent from the 2008 burst, and covering for them has pushed weaker governments towards insolvency. We’d like to keep the value of our dollar cheaper, to allow us to export more. But other countries are also trying to keep the value of their currencies lower so that they sell more and buy less; if everyone does that, they cancel each other out.

7. All this means federal deficits are unavoidable, as long as the private sector is also not spending more. If the Feds spends less, the accounting identity from Econ 101 tells us the private sector would tank. Slashing government spending could cause a another severe recession or depression.

8. The S&P credit rating rationale is based on a bogus economic view. There is no accepted theory that says the debt to GDP ratio must be below some percentage, such as 75 percent, to be “sustainable” or conducive to growth. Yet S&P and Moody’s are both saying that Congress must achieve a $4 trillion down payment to debt reduction over 10 years in order to keep the ratio from rising about this arbitrary 75 percent. Even if the average ratio for some economists’ preferred outcomes in other countries was 75 percent, that does not mean that number is the correct benchmark for any single country, let alone the US now. Every country is different, and there is no reason to believe the US cannot handle debt to GDP ratios much higher than some historic international average and still be “sustainable” or conducive to growth.

9. The financial industry has a strong incentive to create debt hysteria. Severe government budget cutting creates ample opportunities to force state and local governments to privatize public assets and to create conditions requiring the social safety net to become privatized. But the financial sector can gather wealth even in a downturn, because, they’ve learned, government will back stop them. S&P is paid by the financial sector. And then there’s S&P’s role in helping the financial sector pull off massive fraud. Any Democrat, such as my millionaire Senator, John Kerry, who engages in debt hysteria, should be shamed and pushed out of office.

10. President Obama and his advisers own this mess. It was the President who insisted that we needed to slash the debt by $4 trillion over ten years, who said that was a precondition for “sustainability” and getting our fiscal house in order. He told the nation we can’t even have a useful conversation about growing the economy or creating jobs until we did that. All his advisers echoed him. [Even DeLong would replace the entire team, but Summers for Fed Chief? You were also for Bernanke, Prof.]

It was all gibberish. But when S&P and Moody’s use the $4 trillion trigger and no one says, “huh?”, it’s because the White House validated that completely arbitrary number. Thus S&P’s $2 trillion “error” may reveal they’re incompetent and pursuing their own ideological agenda, but its still true that the debt limit bill got just over $2 trillion and left us $2 trillion short of the arbitrary $4 trillion. It’s all gibberish, but it’s the White House’s gibberish. Worse, it’s forced every timid Democrat, including the entire leadership and millionaires like John Kerry,” to echo the same gibberish. Shame on them all.

The Threat and the Picture That May End Obama’s Presidency

2:33 pm in Uncategorized by Scarecrow

The White House re-election team is spinning desperately to both change the subject from the debt limit bill and divert attention from its failure to address any real problem the country faces.

The President’s spokespeople would have us believe the bill was both necessary and good for the economy.  But if that is true, why are there no economists or politicians standing behind the President, applauding as he signs the bill?

The Budget Control Act of 2011, Aug. 2, 2011

The Budget Control Act of 2011, Aug. 2, 2011

It’s hard to avoid the most logical explanations for the President’s solitary act:  Despite his Party leadership’s complicity in voting for and sanctioning the bill, no sensible Democrat, and certainly no one running in 2012 for re-election, wanted to be in a picture that economists now, and historians later, may point to as possibly the most economically stupid and shameful act of surrender ever signed by an American President.

And even when Republicans like John Boehner are willing to take public credit for getting “98 percent of what I wanted,”  the White House certainty did not want to be surrounded by a bunch of jubilant Republicans holding up two fingers for victory behind Mr. Obama’s head as he signed his own surrender to their successful blackmail.

So the picture of the President shows him signing the bill alone, while Mitch McConnell brazenly celebrated the victory of economic blackmail and extortion on the Senate floor.  From the NYT:

“The debt ceiling should not be something that is used as a gun against the heads of the American people,” the president said.

But Mr. McConnell sees it differently.  . . .

Mr. McConnell said the just-ended debate in Washington created “an entirely new template” for future attempts to raise the debt ceiling.

“This kind of discussion isn’t something to dread; it’s something to welcome,” Mr. McConnell said. “And while the president may not have particularly enjoyed this debate, it was a debate that Washington needed to have.” . . .

“Never again will any president, from either party, be allowed to raise the debt ceiling without being held accountable for it by the American people and without having to engage in the kind of debate we’ve just come through,” Mr. McConnell said moments before the Senate vote on the deal he worked out to raise the debt ceiling by $2.1 trillion.

So there it is.  The likely next Majority Leader of the Senate just told the President of the United States that even though the debt limit was supposedly raised enough to get through his first term, but at a terrible price to the nation’s credibility and institutions, the Republican Party will again hold the debt limit hostage in 2013 if he wins reelection.  And once again the Republican Party will blackmail the nation, exploiting a President that either agrees with their goals or cannot find the wisdom or the courage to defend the nation’s credit or its economy.

The economists warn us we’re facing a possible renewed recession to go with the continued depression being suffered by the unemployed and many others.   The economy needs a strong President who understands the economics of a  “lesser depression” (or “balance-sheet recession”).  It needs a leader who is prepared to mobilize the nation’s huge resources to overcome it and mitigate its damage.  And it needs a President who cannot be blackmailed by implacable zealots and is not afraid to call them out.  But those qualities don’t apply to Mr. Obama.  So how are the nation’s government and economy supposed to survive such an incompetent, feckless President?

There was once a time when Presidents looked to a group of respected elders who, in times of crisis, could get access to a President and tell him he’d truly screwed up, that he needed to change course.  I don’t know who these people are today.  Does  this President have anyone of that stature to whom he would listen?  Because the people who surround him appear as clueless and helpless as he is.

In another era, a much stronger, far more effective, and more politically astute  President, when faced with growing rejection of his war policies that were splitting the country, surprised the nation by saying “I shall not seek, and I will not accept . . .”  That moment has arrived for Mr. Obama, but there’s no one close enough and wise enough to tell him, and he doesn’t seem able or willing to figure it out himself.

In Cowboys and Aliens, Humans Win; In Washington’s Zombies Vs. Pods, They Lose

6:14 am in Uncategorized by Scarecrow

"Here You Leave Today and Enter the World of Yesterday, Tomorrow, and Fantasy"

"Here You Leave Today and Enter the World of Yesterday, Tomorrow, and Fantasy" by IceNineJon on flickr

To escape the fantasy world of confidence fairies, invisible bond vigilantes and the economic zombies and pod people who dominate Washington, I went to see Cowboys and Aliens. It was a healthy, life-affirming return to reality.  If you prefer horror films, watch CSPAN 2.

In this fun Hollywood escape, violent, prejudiced men trapped in their own machismo join with repressed victims of genocide to confront rapacious creatures  intent on capturing the gold market. People captured by the gold freaks are turned into zombies to feed the looters.  The heroes are Indiana Jones, 007, and the last of the Mohicans played phoenix-like by the pretty House Lady. There’s a liberal bartender and a kid who becomes a man by dissecting a bug.   In the end, the humans of all types realize they have to join together to defeat the rapacious creatures who are looting the planet and turning humans into zombies and pod people.   There’s hope for our species!

Back in Washington, D.C. there are no heroes and no upbeat ending.  Instead, the looting, muggings and beatings will continue until morale improves.

In our “real” world, there is a radical extremist group driven by zombies and zombie beliefs who successfully blackmail the nation into strangling its own economy.   The supposedly “sane” group that is supposed to stop this madness has become cowardly and turned into mindless pod people, who assure the nation that the  gutting of American government and essential services and safety nets won’t occur in one step but in several, whose outcome is locked in by an undemocratic Super Congress and the next debt limit blackmail in 2013. Read the rest of this entry →

CNN Interviews on Debt Deal: Knaves, Thieves and Liars

6:36 am in Uncategorized by Scarecrow

CNN’s State of the Union featured Mitch McConnell, Chuck Schumer and Gene Sperling, ending with Mark Zandi. Their collective task, and they all agree on this, was to sound reasonable while not explaining what really matters in the emerging deal President Obama is hoping to impose on a helpless, and increasingly hopeless nation.

There were no guests to represent the victims of this deal, and there will be tens of millions of them.  CNN invited no one who could explain or argue what a terrible deal this would be for the nation.   The nation’s economy, the elderly, the poor and the unrepresented are about to take a serious drubbing, but thank the gods both Democrats and Republicans, Congress and the President will willingly administer the beatings and continue them until morale improves.

The basic components are reported to include:

1.  Raising the debt limit by enough to get us into 2013, about $2.6 trillion or so.  (No one thinks to ask, what then? Do we destroy even more government then?)

2.  Cutting spending by at least the same amount, possibly even up to $3 trillion?

3.  Agreeing to about half of those cuts now.

4.   Creating a 12-member, Cat Food II Commission to achieve the other half by the end of the year, by greasing the Congressional skids for more cuts.

5.  Adding “triggers,” so that if the Cat Food II Commission fails to agree, automatic measures are imposed to achieve the debt reduction goals.

6.  Allowing a vote on some form of balance budget amendment to the Constitution.

7.  Not mentioned: Remaining silent on anything that the country actually needs, like jobs, rescuing states, alleviating poverty and income equality, reining in the financial sector, stopping the looting, holding these criminals accountable, making the investments needed now and in the future, or planning to rescue the economy if it tanks again from the stupidest economic policies one could possibly imagine.

According to Mitch McConnell, who refused to reveal any details other than those designed to assure his craziest supporters, the deal may ultimately include as much as $3 trillion in spending cuts but include no new revenues. Host Gloria Borger asked, why would he expect Democrats to accept a deal with no revenues?  Mitch trotted out the half chestnut that even the President agrees that raising taxes when the economy is weak would be a terrible idea.

Okay, but predictably, Ms. Borger did not then ask why the same implicitly Keynesian argument McConnell is using to protest tax increases does not apply with at least equal or greater force to spending cuts and government layoffs when the economy is weak.  So Mitch McConnell never had to confront his favorite talking point’s hypocrisy.

Borger asked whether there might be any new revenues coming out of the Cat Food II Commission.  “There are no tax increases in this deal,” he said.

Then it was Chuck Schumer’s turn to lie to the American people.  He didn’t explain why, two days after the Commerce Department report showed that the economy is close to sliding back into official recession and the prospects for reducing unemployment are dismal, he and fellow Democrats were not screaming for a jobs and stimulus plan instead of spending cuts.

He wasn’t ask how he can assure the country that $3 trillion in spending cuts over the next decade will not hurt the economy and millions of Americans and seriously degrade vital public services.  Nor was he asked how the Democratic leadership can justify a total capitulation to Republican blackmail and adopting their talking points.

No, Chuck’s main concern was making sure that when the Cat Food II Commission fails to agree, the triggers that kick in to impose further carnage on the economy and hurt millions of real people will hurt some Republican sacred cow too.   Yeah, Chuck, that will make us all feel better.  Gosh, we lost Medicare and Social Security benefits, but man, we sure stuck those hedge fund guys!

Next we heard from Gene Sperling, the White House spinner.  He repeated, as David Plouffe did on Meet the Press, all of the Administration’s talking points we’ve heard from Obama and Bill Daley, most of which are illogical, economically backwards and/or morally offensive.  “You can’t ask for sacrifice from seniors,” Sperling started off.  But he didn’t know when to shut up.  Instead he added “without asking for some sacrifice from the well off.”  So, you can hurt seniors.

In the Orwellian universe in which this White House spins, “shared sacrifice” means that it’s okay to hurt seniors and extract even more from the poor and those without political power as long as we also change the tax treatment for hedge funds or corporate jets.  “Compromise” means giving away the store, caving in to Republican blackmail, enraging Democrats and betraying everyone who voted for Obama or the Democrats.  And then Sperling repeated the gibberish about how all this will restore confidence to the business community.

Next, Mark Zandi said the reported deal is a “great deal,” and that the $3 trillion reduction comes close to the “down payment” that will get us to “sustainability.”  The market will react very positively, he assured us, knowing the reason is because lots of market folks believe this gibberish.

Would this improve the economy or create jobs, Borger ask?  “Yes,” he said, forgetting that it contradicts everything he’s ever said about the effects of stimulus, the need for more, and the negative consequences of reducing government support while the economy is weak.  There must be a dozen of his quotes out there,does Gloria Borger know?  This deal will provide “certainty,”  Zandi assured us, thus laying the foundation for improved growth in coming months.  Confidence fairies flew out of my screen.

The only hope the American people ever had during this mugging, though no one but Krugman is ever allowed on tv to explain it, was that this abysmal Congress would deadlock.  That would force the President of the United States to ask his lawyers again whether there was anything in the Constitution that gave him sufficient executive authority to tell Congress and the Republican crazies to kiss off and tell his Treasury Secretary to avoid default and pay the nation’s bills, all of them.

“Uh, well, gosh, now that you asked in that light, Mr. President, there are actually several ways you could do this . . . “  And then David Plouffe would send an apology to David Gregory for declaring the opposite today.

But that was never what President Barack Obama wanted.  He used the phony debt crisis and debt limits extortion to get what he’s always wanted: shared responsibility in cutting programs for the elderly and the poor, while protecting the interests of the financial backers whose millions he’ll need to get re-elected.  And never mind that he’s destroyed what’s left of the Democratic Party, not to mention a nation’s hopes for humane government.

President Emily Litella To Supporters: “Never Mind” the Balance Thing

7:36 am in Uncategorized by Scarecrow

"Never Mind"

On Monday night, President Worse than Hoover urged all good Americans to call Congress and demand they “balance” egregious spending cuts with a few tax increases that we would not call tax increases, arguing that if you change the taxation of hedge funds, it’s okay to cut Social Security.

On Wednesday morning, after the CBO reported that neither the Reid cuts-only plan nor the Boehner cuts-only plan would cut as much as each claimed, both men announced they would work to make their respective cuts-only plans even worse by adding even more cuts only.

In response, President Emily Litella told his supporters, “never mind!” He’ll now propose to combine Reid’s awful plan A with Boehner’s godawful plan B, and we’re good.

After this, it’s probably prudent to assume the only people who still accept anything this President says may well be Pod People. Check under your beds.

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]

What Is Mr. Obama’s Principle on Recreating Slaves?

6:21 pm in Economy, Politics, Uncategorized by Scarecrow

Abraham Lincoln

"Abraham Lincoln" from onlinewoman on flickr

The President of the United States is not a descendant of former slaves, which may make it easier for him to draw analogies to what President Lincoln once said — see David Dayen’s post on Obama’s last lecture — about his willingness to make compromises about freeing slaves to advance his goal of preserving the Union.

Let’s recall what Lincoln actually wrote in his letter of 1862 to Horace Greeley in which he explained his Emancipation policy as it related to saving the Union:

. . . I would save the Union. I would save it the shortest way under the Constitution. The sooner the national authority can be restored the nearer the Union will be “the Union as it was.” If there be those who would not save the Union unless they could at the same time save Slavery, I do not agree with them. If there be those who would not save the Union unless they could at the same time destroy Slavery, I do not agree with them. My paramount object in this struggle is to save the Union, and is not either to save or destroy Slavery. If I could save the Union without freeing any slave, I would do it, and if I could save it by freeing all the slaves, I would do it, and if I could save it by freeing some and leaving others alone, I would also do that. What I do about Slavery and the colored race, I do because I believe it helps to save this Union, and what I forbear, I forbear because I do not believe it would help to save the Union. . . . Read the rest of this entry →

Move Over Doug Feith: Lawrence O’Donnell Has a Friend

7:10 am in Economy, Politics, Uncategorized by Scarecrow

There’s a fascinating, or should I say, depressing, debate occurring in Washington over how much federal spending should be cut as a condition for raising the debt ceiling, which everyone except the Tea-GOP crazies understands must be raised. There is a somewhat less important debate about the President’s strategy in getting to an answer.

Over several nights, MSNBC’s Lawrence O’Donnell (Last Word) has argued that Mr. Obama has pursued a brilliant strategy that has not only split the Republicans over their unwillingness to accept any tax increases but also put him in an advantageous position for getting a “clean” debt limit bill without egregious cuts, as well as gaining political traction as the only responsible adult in the room.

I’ve noted that this theory, while implying Mr. Obama is lying, conveniently ignores important facts and consequences about Mr Obama’s assumed strategy.

Never mind that with Mr. Obama’s consent/direction, Harry Reid is trying to make the “clean” bill as dirty as he can so that a least a few Tea-GOPs can vote for it and not force cowardly Democratic Blue Dogs to vote as though the country was more important than their reelection. I’ll only add that in yesterday’s press conference, the President reinforced points that increase my concerns about the economic message he keeps sending.

The President has again told voters that dramatically reducing our debt has to be the nation’s priority; we can’t fix the economy nor adequately relieve the real unemployment crisis unless we first solve the faux debt problem. So if we only raise the debt limit (McConnell’s original “clean” bill that Mr. O’Donnell thinks is Obama’s clever goal) without a major “down payment” on debt reduction, Washington and voters will continue to be preoccupied by the debt.

Well, as long as the President and the Tea-GOP both insist that we can’t fix the economy or create enough jobs unless we dramatically reduce the debt, then there’s no reason to expect this President or this Congress to fix the economy or create enough jobs.

That’s a very clever argument for not fixing the economy or creating jobs, or being blamed for it, but apparently, the perversity of relentlessly promoting that false belief has escaped Mr. Obama’s supporters, who seem to pay no heed to the dozens of economists telling us our leaders have their priorities backwards.

Pointing out this perversity is causing severe angst among Obama fans, who have now latched onto Lawrence O’Donnell’s lecturing progressives for their thoughtless criticism of Mr. Obama’s brilliant strategy.

In this wondrous article, progressives are accused of being naive, ignorant of American history, hypocrites in complaining about raising retirement ages now but ignoring that already happened, and best of all, simply too young and immature to know much, compared to O’Donnell who knows how to use a computer to edit the number in the debt limit statute. Read it all; it’s a treasure.

So what evidence is there of these crimes, and particularly the crime that hypocritical progressives are indifferent to the current eligibility ages in Medicare and Social Security?

I guess that when most progressives were proposing, in the health care debate, that Medicare be extended to everyone, or failing that, at least extending it down to 55, and failing that, at least let people buy into Medicare as an option on the Exchanges, and failing that, at least offer a public option linked to Medicare rates on the exchange that might one day become the equivalent of Medicare, that must have meant that none of us ever had a problem with raising the eligibility age of Medicare.

And when progressives argued for temporarily lowering the age for Social Security to help relieve the jobless crisis, and when Jane Hamsher this week front paged an article by James K. Galbraith in which, among other things, Professor Galbraith recommends, as he did in 2009, that we lower the eligibility age for Social Security at least temporarily as a jobs recovery measure, and when Jon Walker and I (and probably many others) endorsed that idea during the stimulus debates and again when they first started talking about “reforming” Social Security, and when we noted during the Cat Food deliberations that it was looney to consider raising the eligibility age further when millions of newly jobless were already being pushed prematurely onto lower benefit levels of Social Security and Medicare, that that obviously meant progressives were just fine with the fact the eligibility age for full benefits had been raised already.

It’s only slightly annoying that, without having any facts, Mr. O’Donnell’s friend assumes that those of us criticizing Mr. Obama’s economic views and who oppose putting Medicare and Social Security benefit cuts on the table must be too young and immature to remember much history. Ignoring the gratuitous insult to younger people, many of us are retirement age or older, and some of us recall being drafted to help kill little brown people in Vietnam. I guess none of us was wise enough to learn anything about politicians claiming to be against things like needless war and torture and indefinite detention but then engaging in or covering for them.

It is no revelation that Mr. Obama may think he can benefit with independents by insulting progressives. And it’s possible that when progressives push back, that helps him in some perverse way disconnected from the public interest. He and his brilliant political team now have the economy languishing, unemployment at 9.2 to 17 percent and the Tea-GOP holding US credit and the economy hostage. They’ve got him running several points behind the generic representative of one of the stupidest, most destructive political parties in American history. But O’Donnell’s friend concludes that every time progressives push back against Mr. Obama’s flawed policies, they’re helping Mr. Obama.

By that logic, the way for progressives to pressure the Administration to adopt policies in line with progressive values is to stand on a chair and clap as hard as they can every time the President reenforces Tea-GOP talking points, publicly criticizes liberals or undermines the progressive elements of the New Deal that produced a 50 year run of rising incomes, expanding middle class, and success for the country, never mind the Democratic Party. Of course, that would only confuse the independents, wouldn’t it?

Step down, Doug Feith; you’ve lost the title.

Related Updates from Americablog: Larry Summers on Obama’s 2009 plan to “reform” Social Security and Medicare.

From DeLong, citing David Dayen: No, no, no; first loot, then burn