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Mitch Daniels’ New Math Ignores the Real Numbers

6:00 am in Politics by Scarecrow

I caught the last half of Indiana Governor Mitch Daniels explaining his new budget math to CNN’s Candy Crowley.  Daniels is trying to pitch himself and his book with the idea that the federal deficits and long-run debt pose an existential threat to the Republic. It’s just arithmetic, he says.  But which numbers matter?

Math can be hard, but it’s impossible for those who ignore the relevant numbers.  The essential numbers (among dozens we could cite) are these:

First:  The US Government can currently borrow money for 10 years at about 1.8 percent, which adjusted for inflation means that the real cost of borrowing money long term is essentially zero.  The market is screaming at us that money is free if we want to borrow more to put people back to work doing stuff that needs to be done.

Second, with unemployment at 9 to 17 percent, depending on what you measure, there are about 25 million people who need jobs or more hours in the jobs they have.  Smart economists told us early on, and more are telling us now that this condition could last for several more years.  And that’s assuming we don’t slip into a worse depression, which we might because Europe is led by people as dumb as Mitch Daniels.  So even the “better” proposals to spend a little more now and postpone austerity measures until 2013 are misguided.

Third, the deteriorating infrastructure in the United States needs over $2 trillion in investments over the next decade, starting yesterday.  Again, it costs us essentially nothing to borrow the money to do this.

Fourth, US poverty rates are at record levels.  There are about 50 million people without health insurance. The number of children in the US who rely on food stamps is shameful and scandalous.

Fifth, the richest 1 percent in America continue to capture a grossly disproportionate share of the nation’s income and wealth, and that trend is continuing.  But their effective tax rates haven’t been lower in decades.

Sixth, we’re laying off tens of thousands of teachers.  It is because we have too many teachers?  Too many  over-educated children?  No, we need more and we need to pay our teachers better.  Our schools are failing, our kids are falling behind those of other nations and we’re losing out in the competition for what we need the next generation to know.  That’s called losing the future.

And on and on.  But Mitch Daniels didn’t bother to repeat any of those numbers.  Instead, he claimed that just the interest payments on debt alone would force us to stop educating our children, which is patently absurd.  He then claimed that historically, when countries reach a certain threshold of debt, they fail.  But he didn’t say what that threshold is or cite any examples from history — he’s probably just misreading Reinhardt, as the GOP tends to do — nor explain why he believes the US is even remotely close to such a threshold when it’s clearly not.  Once again, the government’s 10 year interest rate is around 1.8 percent . . .

Daniels is the “moderate” Republican that gets people like George Will all excited, because, I assume, he thinks Daniels at least has some tenuous grasp of reality while most of the presidential wanna bees don’t.  Nope.  Stick to baseball, George, where the statistics are there for all to see.

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.

Obama’s Political, Economic Advisers Say Jobless Rate Won’t Matter in 2012

5:47 am in Uncategorized by Scarecrow

I’ve always thought the pent up anger at George Bush and the frustration from the Bush years would have allowed Daisy Duck or the Chipmunks to win the Presidency in 2008. So the trick was to elect someone who understood that anger and was prepared to reverse all the reasons it existed. Sure, the Obama message people understood this, but so did my cat.

Now the people who helped Obama defraud voters by channeling everyone’s hope for change have convinced themselves he won the election because they’re political geniuses.

The lastest example of this delusion is Obama’s senior campaign adviser, David Plouffe, who confidently told Bloomberg that going into the 2012 elections with over 8 percent unemployment and no meaningful jobs programs will not hurt Obama’s chances for reelection:

“The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers,” Plouffe said. “People won’t vote based on the unemployment rate, they’re going to vote based on: ‘How do I feel about my own situation? Do I believe the president makes decisions based on me and my family?’”

Yes, that’s coming from the White House that just leaked to the Beltway media that Mr. Obama wants a grand bargain with the most clownish political party in America’s memory in which benefits are significantly cut for poor people, sick people, old people, impoverished women and children in exchange for adjusting taxes on hedge funds and the depreciation rates on corporate jets. But Mr. Plouffe’s tone deafness doesn’t end there. More from Bloomberg on Plouffe: Read the rest of this entry →

Scarecrow Awakens: Austan Goolsbee To Go *Poof!* But It Won’t Help Economy

5:53 pm in Uncategorized by Scarecrow

The White House announced late this afternoon that Presidential economic advisor, Austan Goolsbee, would leave his White House position to resume his tenured faculty position at the University of Chicago. From the New York Times Caucus:

Austan Goolsbee, a longtime adviser to President Obama and the only economist left on his core economic team, plans to leave as chairman of the Council of Economic Advisers by September after a year in the job to return to the University of Chicago.

With the recovery flagging, the White House is eager to name a successor to Mr. Goolsbee this summer and is considering several academic economists, an administration official said on Monday. The job requires Senate confirmation.

This shouldn’t suprise anyone. The reason may be as simple as the need to retain a tenured position at one of the most discredited respected economics departments in the country. And like all academics, Goolsbee joined with the understanding he would return to Chicago. But a quick look at recent headlines offers other reasons.

In recent weeks, after a near stagnant first quarter, we’ve seen one forecaster after another lower their forecasts of economic growth from about 4 percent this year to under 3 and perhaps as low as 2.5 percent. This quarter is expected to grow at an annual 2.8 percent rate or less. Last week, we got confirmation of the slowdown via disappointing jobs numbers, with the unemployment rising to 9.1 percent. While that followed more hopeful March and April numbers, the trend level is clearly unlikely to make a significant dent in the overall unemployment rates before 2013. In fact, at that rate, it would take about ten years to get back to normal.

And yet there are no signs the President or the White House sees these numbers as a reason to refocus on economic growth and jobs creation. Instead, they remain publically fixated on cutting intermediate to long-run deficits and strking a foolish and economically damaging deal with faux deficit hysterics and anti-government crazies as ransom to allow an unavoidable rise in the debt ceiling. It’s hard to imagine a process so disconnected from reality and the economy’s needs.

With reputable economists starting to use the words “panic” and “depression” to describe the potential risks to the economy, it was left on Sunday to Austan Goolsbee to explain why the White House was stuck on stupid, unwilling to change course or even concede that the recovery was in serious danger. We were asked to ignore that the nation’s unemployment is back above 9 percent, extended unemployment insurance is running out, and states are continuing to slash their budgets and payrolls. The latter are offsetting what little stimulus might have come from last December’s tax cut deal. Even someone with straw for brains can see we’re going the wrong way.

Ignoring the crisis in unemployment, the central debate in Washington and many states remains over how drastic austerity measures ought to be. But every sensible person knows austerity can only make matters worse. The austerity record in Southern Europe confirms still sound economic theory: it’s hurting growth, throwing millions out of work, and not even reducing debts that much — people without jobs don’t pay taxes but do need public assistance — so tens of thousands of Spanish, Greek or Portugese citizens are in the streets tonight and today demanding a change in their governments. What more evidence do we need?

Faced with this insanity, even a Chicago economist should have the good sense to get out before the worst is blamed on him, when he’s likely just the apologist for Larry Summers. And following his, uh, strange performance on Sunday’s shows, he got a clear signal from those who might be inclined to be more charitable about motives and predicaments. When the former Democratic Administration economist Brad DeLong linked favorably to Mark Thoma questioning how the Administration could continue to have it’s head in the sand and not see the need to pivot towards job creation, Goolsbee may just have seen it as a sign it’s time to announce his departure.

The White House announcement tells us that the next poor sap to take that job will face exactly the same dilemma Goolsbee did. It ought to be a great job, it looks terrific on one’s resume, but why would anyone want to take the position of economic adviser when the man in the Oval Office and his political advisers have no intention of following any sound economic advice?

Why become the front for a team that remains committed to failed policies that may very likely take the economy down with them? And when a Nobel laureate has to tell the White House via the New York Times that he’s withdrawing his nomination to the Federal Reserve because Washington, including the White House, has become dysfunctional, it’s pretty clear the communication between the President and the economic team is not what it should be.

So it’s easy to see why Goolsbee might believe there was no point in staying.

Scarecrow’s Nightmare: Austan Goolsbee Defends President Romney’s Economic Plan

7:00 am in Uncategorized by Scarecrow

If I’d been asleep for the last decade and woke up to ABC This Week’s interview of Presidential economic advisor Austan Goolgbee, I would assume that Mitt Romney won the 2008 election, that he was predictably following Republican dogma about how to recover from a severe financial collapse and recession and that intelligent media folks like Christiane Amanpour were realizing those standard GOP policies aren’t working.

Goolsbee correctly told us that a smart economist wouldn’t get overly excited about one month’s jobs and growth numbers but would instead look at the overall trend. Of course what he wouldn’t want to concede is that GDP grew at a meager annual rate of 1.8 percent over the first three months of 2011 and so far was predicted to grow at only 2.8 percent for the next three. And the overall trend for job growth was still not enough to make a serious dent in unemployment unless you believe taking 5-10 years to get back to full employment is okay.

So Goolsbee was in denial from the opening moment because he didn’t have a decent story to tell even in his own framework. When Amanpour asked him what the Administration could or should be doing to improve conditions, he ticked off items you’d expect to hear from a typical GOP Presidential adviser: we’ve got to get the debt under control; we have a White House effort to identify and get rid of governmental regulations that are preventing the private sector from growing the economy; we should pass “free trade” agreements backed by the Chamber of Commerce; and we should leverage limited public dollars to release billions in private funding for investments.

Goolsbee’s bottom line: “It’s now up to the private sector.” That’s exactly what you’d expect from President Romney’s economic adviser.

It took Paul Krugman and Chrystia Freeland, over the absurd denials by Martin Regalia of the Chamber of Commerce, to remind ABC’s audience that business confidence and concerns about taxes and regulations aren’t the problem: business polls repeatedly show businesses aren’t expanding/hiring much because the demand for their products is weak. Demand is weak because the recession and the housing market crash depleted consumers’ wealth and they’re worried about losing their homes and jobs. You don’t need a degree in economics to grasp the logic of that. When private spending is still depressed, only government spending is keeping the economy afloat, and the stimulus is phasing out.

Goolsbee pointed to Joe Biden’s talks, but it’s blindingly obvious the Biden effort is counter-productive. Democrats should be demanding it be refocused on jobs or shut down.

Regalia’s main talking point, completely unsupported by theory, logic or facts, is that the economy would boom if only the government would “get out of the way.” It’s a wonderful myth if you’re fronting for Wall Street, trying to defang the puny financial regulations from Dodd-Frank, and think the greatest threat to Wall Street’s continued looting is Elizabeth Warren. But we should remember the “get out of the way” mantra the next time Wall Street self immolates, tanks the economy and a former Goldman Sachs CEO become Treasury Secretary gets on his knees to beg Nancy Pelosi to bail out every major Western bank on the planet.

I’m sure I imagined all this. The country wouldn’t possibly be dumb enough to elect an unprincipled moral chameleon like Mitt Romney President. And we’d never put up with someone as defensive and unconvincing as Goolsbee was today, though we’d wonder how the voters got taken.

No, that couldn’t be real, so when I really wake up, I’ll let you know what the adviser for the actual Democratic President said today about the sagging economy and the undefensible unemployment numbers.

More: DeLong, citing Mark Thoma, asks, “where is Plan B?”

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.

NBC’s Clueless Chuck Todd et al: GOP Prez Candidates More Important Than Anything

1:46 pm in Uncategorized by Scarecrow

Caution - The Clueless Will Be Impaled

The Clueless Will Be Impaled by Wheezy Jefferson


An NBC reporting team led by White House Correspondent Chuck Todd tell us they don’t have a clue about what matters to the American people or the state of the nation. In today’s First Read, Todd et al breathlessly proclaim the following (my bold):

Over the next 10 months, the race for the Republican nomination will become the chief political story in America, and that will affect the contours of the general election. We even started seeing it yesterday, with Palin, Pawlenty, and Bachmann taking center stage.

They then explain that Obama has had the whole stage to himself, but now the country will become fixated on the race for the Tea-GOP nomination, because when Palin et ilk take “center stage,” they “become the chief political story in America.”

Good grief.

So, those of you who are concerned that the economy and job creation are stalled with 14-25 million people out of work or underemployed can put that aside, because we’ll all want to focus on what Sarah, Tim and Michele said today. Please don’t worry about whether the Tea-GOP Congress will screw up US credit, restart a recession. And don’t fret they want to punish seniors and cover their own craziness by convincing Joe Biden to slash Medicare and Medicaid over the wishes of 80 percent of the nation.

And forget that the rule of law has collapsed for the ruling class, the richest 1 percent of whom have managed to capture a staggering share of the nation’s wealth while the vast majority of Americans are facing declining wages, wealth and economic security. Where is Giuliani today?

Chuck Todd thinks we need to know whether Sarah is riding her hog or a bus, whether Michele can find Canada on a map or Tim has found the group of Chinese investors to whom he’ll provide a personal guarantee of paying their bond interest first. Let’s not forget to ask Mitt to distinguish again between state versus federal insurance mandates. And of course, no day should go by without checking to see if 5% Newt has managed to say something even more ridiculous or deceitful than the day before. Because that portion of America that likes a circus and cares about this astonishing group of clowns is hanging on their every word.

But back in the reality-based world . . .

I’ll make this simple, Chuck: The most important political story in America is that its government — distressingly like those under assault in a dozen nations across the globe — has become almost entirely unresponsive to the nation’s needs and its citizens’ concerns. It’s become profoundly corrupt, representing only the needs of the richest of the rich and the interests of corporate oligarchs, and uncaring about everyone else. And there’s virtually no check on this accelerating decline in governmental accountability.

Read the rest of this entry →

Secretary Chu Tries to Spin Away from Obama’s Careless LIHEAP Cuts

6:14 am in Uncategorized by Scarecrow

Energy Secretary Steven Chu spoke to a Christian Science Monitor event yesterday and was asked why the Obama Administration was willing to propose/accept major cuts in LIHEAP, the Low Income Home Energy Assistant Program, for fiscal year 2012. His response suggests the Administration does not have a principled or coherent answer.

The CSM story with video is here. Sam Stein at HuffPo captures part of the contradiction in Adminstration policy but doesn’t discuss the more blatant absurdity of Chu’s respsonse: [my bold]

. . . Chu acknowledged that the administration had made “very, very hard decisions” in proposing to decrease funding for the Low Income Home Energy Assistance Program by $2.5 billion in its 2012 budget. But while President Barack Obama argued in February that lower commodity prices meant less aid was necessary, a subsequent spike has led the administration to reassess its approach to justifying the new funding levels.

On Friday, Chu argued that the administration was pursuing alternate, broader reforms to help stabilize energy prices for households.

Sorry, but what follows from Chu is all total nonsense. LIHEAP is a program for providing block grants to states (you know, flexible things Republicans like when the Feds try to dictate programs) to help people lower their energy bills.

One of the main features is direct payments to low-income people to pay for heating oil and/or utility bills when energy prices are particularly high and/or weather is severe. It’s to keep low-income people from having to choose between freezing to death and starving to death. From the Health and Human Services, Children and Families, LIHEAP web site: (my bold)

Contingency Funds: The President may release these funds to assist with the home energy needs arising from an emergency situation. They may be allocated to one or more grantees, or to all grantees, based on criteria appropriate to the nature of the emergency. In the past, the President generally has released these funds in response to emergency situations arising from extreme weather conditions or energy price increases. Generally, funds have been distributed based on the degree to which specific States are affected by the weather or energy price situation that led to the release of contingency funds.

As the CSM reporter noted in his question, the Administration claimed fuel prices were down last year, so let’s cut funding for next year. Except we just had a very severe winter and oil-related prices have spiked. That means people who rely on types of fuel oil for heating are hurting and could again next winter. So the Administration rationale didn’t make sense then, and doesn’t make sense now.

But it gets worse. As Stein’s HuffPo article notes, Secretary Chu then talked about a different rationale — in a time of austerity, Chu tells us in the video, the federal government needs to cut the funding, but it also wants to expand the leverage of federal dollars while extending weatherization assistance to middle-income people. Uh, no, Mr. Secretary. In a severe recession, the federal governement should be expanding safety net programs, not contracting them.

Now there’s nothing wrong with using federal dollars to leverage local and personal investments in weatherization of existing homes and rental units. The California Energy Commission started pushing that, uh, about 30 years ago. Welcome aboard, Mr. Secretary. But what has this to do with keeping poor people from freezing or starving next winter? Nada, zilch. Zero.

In case the Administration has forgotten, there are still 14 million people unemployed and another 10 million underemployed. We have record poverty in the US and worse income maldistribution than Egypt. Poor people aren’t borrowing money from friendly Bank of America to make weatherization retrofits in their (likely) badly maintained rental units, and neither are their landlords, because, you know, landlords don’t pay the utility bills and renters don’t get the benefits of retrofits they paid for after they leave.

We’ve understood this market failure problem for decades. So I don’t know what Chu thinks the feds are leveraging that will help matters soon. And utility bills are about electricity and natural gas, not just heating oil in areas, such as the Northeast, that use oil for heating. People who have lost jobs and health insurance need help paying their electricity bills, including their natural gas bills if they have gas heating — and they need it even when natural gas prices are historically low. It’s not just about home heating oil and Libya.

So if the US DOE wants to tackle the broader problem of America spending way too much money on energy because the housing stock leaks energy like a sieve, and many state building codes are negligent about energy, that’s fine. Go get ‘em. I agree it makes sense to do about a gillion cost-effective things on the demand side, including weatherization loans and leveraging federal dollars.

But first they need to make sure people don’t freeze while the Department of Energy relearns 30 years of history and takes however long it takes to set up institutions to handle loans, convinces utilities and state utilities commissions to fund energy audits and retrofits, develops community organizations to help get the word out and assist renters — something like ACORN sounds like a really good idea — and makes sure the weatherization contractors aren’t scam artists and the bank lenders don’t behave like, well, the mortgage lenders at Citi, Wells Fargo and Bank of America.

But the last thing this effort needs is for a Nobel laureate wasting his time fronting for a bunch of White House spin masters trying to tell us the problems the US is facing require fiscal austerity. And he certainly shouldn’t be covering up for a President who can’t admit his policy judgments and rationales are not credible.

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

Marc Thiessen Rewrites History as GOP Plans Tanking the Economy Again

12:46 am in Economy, Government by Scarecrow

(image: twolf)

There have been a surprising number of stories, some ridiculous, wondering whether the predicted electoral slaughter will somehow induce a more Republican Congress festooned with Tea Bags and a chastened President Obama to work together in that wonderous fantasy land that exists only in the minds of David Broder fans.

The short answer, already screamed on the House floor by the likely next Speaker, John Boehner, is “hell no!”  And now his Senate counterpart, Mitch McConnell, has let slip the Republican’s most important goal for the next two years is “for President Obama to be a one term President.”  Message to America: screw you.

Sentient persons hardly needed such candor.  The GOP’s nihilist, nation-be-damned attitude has been obvious since at least January 2009.  And there’s no logical reason to expect the GOP’s Tea Party elements to behave more responsibly now that the GOP’s barely secret corporate funders recklessly handed them a pretend seat at the table. The dupes will demand their due, so accommodation with the black, socialist anti-Christ is out of the question.

Still, more cynical Republican operatives and propagandists recognize there is a danger in being blamed for the obstruction, government stalemate and resulting damage to the economy and recession victims.  It thus falls on the likes of propagandist Marc Thiessen, former Bush speechwriter, to invent a version of history that will deflect blame for the Republicans’ role in crippling the federal government and tanking the economy again.

And they will tank it again.  If you apply budget spending austerity and tax cuts to the wealthy to a stagnant economy with 15 million jobless, millions more in foreclosure and perverse wealth distribution,  you will get a worse recession with millions more unemployed, impoverished and foreclosed.

But the original stalemate, Thiessen insists, was President Obama’s fault. It began when Obama invited Congressional leaders to discuss ideas for a fiscal stimulus to revive the economy.   In Thiessen’s telling, Republicans brought constructive proposals based on tax cuts for everyone, including businesses, but they were rebuffed by Obama, who told them, “elections have consequences.”

Thiessen interprets that to mean Obama never had any intention of taking responsible Republican ideas, and his refusal to work with Republicans is why the bipartisan train got derailed.  Thiessen then fantasizes that if only Obama had offered to share power, say by letting the Republican have about half of the stimulus in tax cuts, then a compromise would have been struck; the Republicans would have supported the stimulus and shared honestly in the blame or credit for whatever results it produced.

Once again we are asked to fall into the black hole and squeeze through to the alternate universe on the other side.  Because if we remain on our side of reality, the rest of us will eventually recall that the stimulus bill was about 40 percent tax cuts, including Republican favored business tax breaks, a  fix for the Alternative Minimum Tax and further tax cuts for most Americans.   Had a President McCain or Bush proposed these (as Bush had), there would have been near unanimous Republican support.

You may also recall the White House insisted on the tax cuts even though Christine Romer was advising the new President that tax cuts were not nearly as useful in stimulating growth and jobs as spending.  Yet the President limited the proposed stimulus spending both to limit its size (arbitrarily, thanks, Larry, Rahm) and to allow more tax cuts, hoping to get Republican votes.  Both unilateral concessions to Republican orthodoxy were largely rejected, but they doomed the stimulus to be too small to fill the gap and poorly targeted.  The compromise may well cost Democrats the House and perhaps the Senate.  Well done, Rahm.

But Thiessen’s revisionist history doesn’t end with that selective forgetting.  He also neglects to mention that Republicans never offered tax cuts as part of a Keynesian package of fiscal stimulus, because they never believed in Keynesian stimulus.  Boehner, McConnell  and friends told us that over and over.  Tax cuts were favored not because they were better stimulus but because they helped cripple government; whatever effect they might have on the economy was secondary, though part of Republican dogma holds that cutting taxes liberates businesses and entrepreneurs, the only sources they acknowledged for real jobs and economic growth.  Of course, this required they ignore the value of public investments and the hundreds of thousands of teachers, firemen, police and other state and local workers that would soon be laid off, because government jobs were not “real jobs.”

If Republicans understood and supported Keynesian stimulus, and cared about putting people back to work, they would have demanded a larger stimulus, instead of fanning deficit hysteria.  They would be demanding we augment Social Security payments, not cut, defer or privatize them.  And they would have realized that federal efforts to increase aggregate national demand would fail if federal spending was mostly offset by state and local budget contraction.  Preventing the states from becoming 50 Hoovers was essential to making the federal stimulus work as intended.  But Republicans opposed expanded aid to state budgets; even the supposed “moderates,” Snowe and Collins, demanded that aid to states be severely limited.

So there was never any hope that many Republicans would agree to a half and half stimulus package that contained hundreds of billions in new Democratic spending proposals, even though that admittedly ad hoc package of spending measures — especially those targeted at the unemployed — would do more to help the economy and create jobs than tax cuts.   When Democrats in the House bundled together their lists of spending priorities after eight years of Bush underfunding and neglect,  there was little chance Republicans would vote for them, no matter what tax cuts the stimulus contained.

Thiessen’s effort to deflect blame for past and future Republican obstruction must also ignore every subsequent effort Obama and Senate Democratic leaders  made to include them, usually over the objections of Democratic activists and liberal bloggers.  Long after it became clear Republicans would obstruct everything, Obama continued to dismay supporters and waste precious time with Senator Baucus’ Gang of Six, orchestrated by the White House in an effort to include Republicans on the Senate Finance Committee on the health reform bill.  The White House demanded a similar bipartisan effort, equally frustrating and pointless, on the financial reform bill, and the Administration supported Senators Kerry and Lindsey Graham’s doomed efforts to agree on an energy/climate bill.  All that history is now missing from the Thiessen/Republican version.

Despite Thiessen’s fictions,  the irony is that Obama didn’t follow through on what he reportedly said — that elections have consequences.  His greatest failure was not to understand what his own election meant — a convincing rejection of the Bush regime, and after the financial collapse, a long overdue repudiation of Reaganism and deregulation.  What was needed was recognition of  the dangers of handicapped, co-opted government in a world of powerful corporations.

Instead, Obama  took the view that the foundations were sound; they just needed better management, a little more oversight here, improved incentives there.  Leave the banks in charge.  Let BP and the oil companies do their thing.  Leave the private insurers in place, but put them in a Republican invented exchange, force everyone in, subsidize the premiums, and hope for the best.  Obamacare is RomneyCare, straight out of the Republican think tanks.

Instead of accepting the obvious mandate for more fundamentally reforming and replacing these discredited views while the harm they had done was most clearly in the public’s mind, he embraced them all.   Predictably, all those forces that wrecked the economy, mismanaged health care, poisoned the Gulf and threaten the climate are more powerful and  menacing than ever, Citizens United be praised, but Obama has discredited or abandoned many of the weapons we had to defend ourselves.  His failure will now hand government back to the powerful perps, and that’s inexcusable.