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Obamanomics

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The New Gilded Age.

“[This] is, as I hope I’ve made clear, an awesome work. At a time when the concentration of wealth and income in the hands of a few has resurfaced as a central political issue, Piketty doesn’t just offer invaluable documentation of what is happening, with unmatched historical depth. He also offers what amounts to a unified field theory of inequality, one that integrates economic growth, the distribution of income between capital and labor, and the distribution of wealth and income among individuals into a single frame.”

In the NYRB, and in very related news, Paul Krugman sings the praises of Thomas Piketty’s new magnum opus, Capital in the 21st Century. “This is a book that will change both the way we think about society and the way we do economics…Piketty has transformed our economic discourse; we’ll never talk about wealth and inequality the same way we used to.”

As a counterpoint of sorts, CEPR’s Dean Baker — neither a Pollyanna nor a conservative — argues Piketty has picked up some of Marx’s bad habits, and finds the book too deterministic and despairing by far:

“[T]here are serious grounds for challenging Piketty’s vision of the future…the book [suffers from a] lack of attentiveness to institutional detail…In the past, progressive change advanced by getting some segment of capitalists to side with progressives against retrograde sectors. In the current context this likely means getting large segments of the business community to beat up on financial capital…[T]he point is that capitalism is far more dynamic and flexible than the way Piketty presents it in this book. Given that we will likely be stuck with it long into the future, that is good news.”

Update: Galbraith weighs in. “[This] is a weighty book, replete with good information on the flows of income, transfers of wealth, and the distribution of financial resources in some of the world’s wealthiest countries…Yet he does not provide a very sound guide to policy. And despite its great ambitions, his book is not the accomplished work of high theory that its title, length, and reception (so far) suggest.”

But We Didn’t.

“Barack Obama has now been in power for longer than Johnson was, and the question remains: ‘What the hell’s his presidency for?’ His second term has been characterised by a profound sense of drift in principle and policy. While posing as the ally of the immigrant he is deporting people at a faster clip than any of his predecessors; while claiming to be a supporter of labour he’s championing trade deals that will undercut American jobs and wages. In December, even as he pursued one whistleblower, Edward Snowden and kept another, Chelsea Manning, incarcerated, he told the crowd at Nelson Mandela’s funeral: ‘There are too many leaders who claim solidarity with Madiba’s struggle for freedom, but do not tolerate dissent from their own people.’”

In The Guardian, Gary Younge laments anew the missed opportunities of Barack Obama’s presidency. “If there was a plot, he’s lost it. If there was a point, few can remember it. If he had a big idea, he shrank it. If there’s a moral compass powerful enough to guide such contradictions to more consistent waters, it is in urgent need of being reset.”

Sigh. If anything, this was all true of the first term too. As John Maynard Keynes said of another ostensibly progressive president a century ago, “[t]he disillusion was so complete that some of those who had trusted most hardly dared speak of it.”

With Friends Like These.

“If the reporter’s own mother was losing $90 of foods a month out of an already-meager allotment, or the reporter’s son or daughter, I very much doubt that reporter would describe that loss as merely symbolic. I don’t know that reporter thinks their own breakfast, their own lunch, or their own dinner is merely symbolic. This is real money coming out of the grocery carts of real families.”

In Salon, former USDA official Joel Berg reads the riot act to lazy journalists and spineless Dems over the soon-to-pass Farm Bill, which cuts Food Stamps for the poor while expanding crop insurance subsidies for wealthy farms. “It infuriates me, that we live in a country with tens of thousands of actual loopholes that benefit the ultra-rich, [whereas] this is a provision authorized by law, perfectly legal, perfectly sensible, that governors of both parties have utilized…[Calling Food Stamp cuts "closing a loophole" is] basically a fabricated excuse. And it’s a smokescreen to obfuscate the fact that they’re taking food away from hungry families.”

Berg goes on: “George W. Bush proposed a billion dollars in cuts to SNAP, and virtually all these people were aghast at how horrible it is. For them to then turn around and justify cuts that are [eight] times as large as what George W. Bush proposed is a little hard to swallow. I do think our political system is basically evil versus spineless now.”

This. It’s the same dynamic you see on the NSA, on the Grand Bargain, and on countless other issues. And this is why I hard to find it to take so many Dems seriously anymore. Here’s the bill passage pablum from Senate Ag Chair Debbie Stabenow: “Congress is on the verge of taking bipartisan action that will create jobs and help reduce the deficit. This is not your father’s Farm Bill. It implements major reforms and ends unnecessary subsidies…Congress can pass a bipartisan bill that helps take us into the future and beyond the policies of the past.” And here’s the missing subtext: “Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) has received more contributions from the crop production industry than any other senator.”

Ain’t no use jiving, ain’t no use joking. Everything is broken, and we need to stop enabling it or it will never, ever get better.

Not Too Distant Mirror.

“The ritual, by now, is well-established. President Barack Obama will travel to the lower house of the national legislature from the executive mansion, and…give a long speech extolling the nation’s virtues and present circumstances — the state of the union is invariably described as ‘strong’ — and laying out the regime’s priorities.”

A day before the big show, Joshua Keating’s consistently funny If It Happened There column at Slate looked at the State of the Union. “Members of the opposition typically do not applaud, though they occasionally join in with approval of paeans to the nation’s powerful military, the leaders of which typically sit stone-faced in front of the gallery.”

Which, of course, is exactly what happened. There are innumerable things Congress could be doing right now to create jobs, spur opportunity, expand the frontiers of knowledge, and generally make life better for families in America. Some of them — raising the minimum wage, ensuring equal pay for women, investing in infrastructure and early childhood education, admitting climate change is happening and proceeding accordingly — were even mentioned in Obama’s remarks, not that we can expect much in Year Six of this presidency (and an election year to boot.)

But with all due respect to Sgt. Remsburg’s sacrifice, when the only thing all of our nation’s legislators can get effusive about is venerating Americans wounded in battle, the republic is in a bad way indeed. As James Fallows put it: “[W]hile that moment reflected limitless credit on Sgt. Remsburg…I don’t think the sustained ovation reflected well on the America of 2014…the spectacle should make most Americans uneasy.” That it should – The last refuge of scoundrels and all that.

“This Sunday, the eyes of millions of Americans will turn to a fetid marsh in the industrial hinterlands of New York City for the country’s most important sporting event — and some would say the key to understanding its proud but violent culture.”

ICYMI, If It Happened There has aptly covered the Superbowl also. “The ethics of such an event can be hard for outsiders to understand. Fans, who regularly watch players being carted off the field with crippling injuries, are unbothered by reports of the game’s lasting medical impact on its players. Nevertheless, fans and the national media can become extremely indignant if players are excessively boastful at the game’s conclusion.”

Speaking of the handegg finals — as usual, also not lacking for tawdry paeans to militarismcongrats to the Seahawks on a convincing Superbowl XLVIII win. As I said on Twitter, I had no real dog in this fight – I was just happy to see the two states with sane marijuana laws karmically rewarded for their forward thinking.

Pope and Change.

“It is no longer simply about exploitation and oppression, but something new…In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting.”

In his recent major encyclical, Evangelii Gaudium, Pope Francis calls out the obvious shenanigans that is trickle-down economics, and has some choice words for the financial sector:

“How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?” “This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation…To all this we can add widespread corruption and self-serving tax evasion, which have taken on worldwide dimensions. The thirst for power and possessions knows no limits. In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule.”

I already sung the praises of this Pope a few months ago, but it can’t be said enough: this Holy Father is such a breath of fresh air. His recent courage in this regard even encouraged our President to make his own quite-good speech about income inequality last week: “So let me repeat: The combined trends of increased inequality and decreasing mobility pose a fundamental threat to the American Dream, our way of life, and what we stand for around the globe.”

Unfortunately — like Obama’s Osowatomie speech in 2011 and his election night speech in 2012 — this seems to be just another example of Obama’s rhetorical tourism on the progressive front. He’s talked a good game — on the occasions when he’s not hippie-punching or parroting Third Way — for close to five years now. But where’s the action to back this rhetoric up? After years of his touting grand bargains and deficit hysteria and allowing sequestration, and looking at the emerging budget deal, I’m not holding my breath. Whatever happens the next three years, it’s already past clear that the tremendous, once-in-a-generation opportunity granted to Obama in 2008 to effect real and positive change has, unfortunately, been wasted.

Update: Pope Francis is TIME’s Person of the Year. A worthy choice, though I would’ve probably have gone with Edward Snowden.

The Neverending Shutdown.

“[W]ith recovery still perilously weak in 2010, the obvious response would have been a second dose of stimulus spending. But the political world was already moving in the opposite direction…In the end, for reasons both political and ideological, Obama decided that he needed to demonstrate that he took the deficit seriously, and in his 2010 State of the Union address he did just that…The Beltway establishment may have applauded Obama’s pivot to the deficit, but much of the economic community saw it as nothing short of a debacle.”

It’s the Austerity, Stupid: In Mother Jones, Kevin Drum surveys the rise of deficit hysteria in the Beltway over the past several years, with particular attention paid to the Reinhart-Rogoff debacle. “It’s not as if we needed the skills of Nostradamus to predict the consequences of austerity. It’s pretty much textbook economics.” (Rhino via here.)

“It was an awful time. Federal employees had to take unpaid furlough days. Beneficiaries were thrown off of federal programs. Courthouses had to be sold. Federal agencies like the FBI, the Food and Drug Administration, and the National Institutes of Health strained to meet commitments, leading to more crime, more outbreaks of disease and less basic research, among other horrors. This may sound like a description of the recent government shutdown, which ended October 16. But this describes the fallout from sequestration, the across-the-board cuts to discretionary spending that took effect March 1—arbitrary reductions that closely parallel the effects of the shutdown.”

Meanwhile, as David Dayen recently noted in The New Republic, the deficit witchhunt is continuing to wreak havoc across America, in the form of the sequestration budget. “Sequestration and artificial spending caps have become the new normal, and it’s redefining the role of government, rolling back the ambitions of the past, and constraining needed investments in the future. So let’s call it what it is: a government shutdown that’s infinitely worse than the one that just ended.”

Nihilists, Dude.

“‘It’s imperative to act now, Cruz warns, before the full benefits of Obamacare kick in and Americans get “hooked on the sugar, hooked on the subsidies.’ His plan: Yoke the defunding of Obamacare to the must-pass budget bill the House will take up in September. The endgame? To force a government shutdown so painful and protracted that Barack Obama would have no choice but to surrender the crown jewel of his presidency. ‘As scary as a shutdown fight is,’ Cruz insists, ‘if we don’t stand and defund Obamacare now, we never will.’”

Another dispatch from the madhouse: In a fine piece of reporting, Rolling Stone‘s Tim Dickinson delves inside the Republican suicide machine. “Having backed the GOP into a shutdown fight that congressional leaders never wanted, the insurgents are winning, and establishment leaders are running scared. America is now careening toward a catastrophic voluntary default on our debt because no one in the Republican Party with the authority to put on the brakes has the guts to apply them, for fear of being toppled from power.”

An important point Dickinson makes here that cannot be emphasized enough: We didn’t just stumble into this crisis: Taking the government and the debt ceiling hostage was the strategy all long, and the right-wing insurgents have been planning for this for months. “They’d drawn a dangerous lesson from the previous battle: Brinksmanship works…In February, the House temporarily suspended the debt ceiling — intending to give the president’s poll numbers three months to come back to earth.”

Hey, speaking of polling numbers coming back to Earth

In any case, see also the NYT on this: “To many Americans, the shutdown came out of nowhere. But interviews with a wide array of conservatives show that the confrontation that precipitated the crisis was the outgrowth of a long-running effort to undo the law, the Affordable Care Act, since its passage in 2010 — waged by a galaxy of conservative groups with more money, organized tactics and interconnections than is commonly known.”

So we’re not in this hostage crisis by accident. The GOP even changed the House rules so they could maximize this confrontation. Republicans saw Obama fold in December 2010 on the Bush tax cuts and in August 2011 on the last debt ceiling hike. They think they can make him fold again here, and on every subsequent debt ceiling hike, and sadly, history is on their side on this. As Ted Cruz put it a few months ago: “If you have an impasse, you know — one side or the other has to blink. How do we win this fight? Don’t blink.”

Another small digression: If, like Ralph Nader this morning, you’re wondering why the right-wing of the GOP always seems to pull these sorts of stunts off while the left-wing of the Dems are usually completely marginalized, two quick answers: 1) The lefties don’t have billionaires backing their plays, and 2) we’re the People’s Front of Judea. They’re the right, they’re inherently better at the goose-stepping.

That being said, this whole episode also illustrates why it’s useless for Democrats to try to meet these fools halfway on policy: Republicans have now spent almost three years voting constantly to end the Affordable Care Act. To break a health care law originally penned by the Heritage Foundation and enacted by Mitt Romney, they have shut down the government and sent us to the brink of an economic default. So, how, exactly, would things be different if we had just passed Medicare for all, and/or a public option? They were going to lose their shit regardless, just like they did on Social Security, on Medicare, and any other progressive issue you can think of. There’s no point in trying to placate people who aren’t bargaining in good faith.

Anyway, as it happens, and as Andrew Sullivan recently pointed out, we’ve seen a minority party in America rejected at the polls try to take the entire nation hostage before. Here’s Abe Lincoln in 1861:

“What is our present condition? We have just carried an election on principles fairly stated to the people. Now we are told in advance, the government shall be broken up, unless we surrender to those we have beaten, before we take the offices. In this they are either attempting to play upon us, or they are in dead earnest. Either way, if we surrender, it is the end of us, and of the government. They will repeat the experiment upon us ad libitum. A year will not pass, till we shall have to take Cuba as a condition upon which they will stay in the Union.”

So too here: This time the scalp the GOP wants is the Affordable Care Act, or the Ryan budget, or social insurance cuts, or Malia Obama. “‘The girl. Bring us the girl,’ said Congressman Steve King (R-IA)..’The bill may pass, but the firstborn shall be ours.’” It’ll be something else the next time and the time after that.

That’s why John Judis is calling this “one of the worst crises in American history“, and why Jon Chait wrote that “Allowing Republicans to default on the debt now is better than trading something that allows them to threaten it later.” Because if Obama buckles this time — and, let’s remember, we already gave the GOP their sequester-funding-levels — the Republicans will just keep taking the American government and economy hostage to get whatever they want. And quicker than you can say he-said, she-said, the rest of the lazy Beltway media will come to treat this sort of hostage-taking as politics as usual. It has to end here, or it never will.

Dispatches from the Madhouse.

“There have been lazier Congresses, more vicious Congresses, and Congresses less capable of seeing forests for trees. But there has never been in a single Congress — or, more precisely, in a single House of the Congress — a more lethal combination of political ambition, political stupidity, and political vainglory than exists in this one…We have elected an ungovernable collection of snake-handlers, Bible-bangers, ignorami, bagmen and outright frauds, a collection so ungovernable that it insists the nation be ungovernable, too. We have elected people to govern us who do not believe in government.”

In other words, the best lack all conviction while the worst are full of passionate intensity. Or put another way: “It’s a Madhouse…a Madhouse!” So, yeah, this is my day job, and, sad to say, it’s mostly been like this since 2010: Two-to-three days out of the week, the House votes to repeal, defund, delay, or otherwise hamstring the Affordable Care Act. On the off day, it usually pays homage to some other deeply stupid and destructive Republican shibboleth, like, say, scrapping literacy programs, gutting the EPA, or kicking four million poor people off of Food Stamps.

That’s business as usual ’round these parts, and this idiotic, self-inflicted shutdown is just the apotheosis of the creeping crazy that has afflicted the House over the past three years. On the off-chance that people just might get better access to affordable health insurance — from a free-market-based plan originally conceived and enacted by Republicans, mind you — the GOP have now completely shut down the federal government. And since it’s looking like America just isn’t backing their play on this, the GOP already have their eye set on a bigger hostage: the nation’s credit rating. Here’s Clownshoes Ryan on this: “I think it will fold into the debt-ceiling fight. I think that’s inevitable, and preferable in my opinion…I like combining all of our leverage, which is sequester and the debt limit.”

That Ryan quote brings up an important and often-overlooked point about this current madness: There is a method to it, and for the GOP — however bad the headlines — this is mostly going according to plan. For, absent all the Sturm und Drang surrounding the Affordable Care Act, when it comes to the actual budget situation: The Democrats have (once again) already caved, and the Republicans will almost assuredly be getting the Austerity Economy they so desire. To wit:

Dave Dayen: “The new fiscal year, which begins October 1, is the natural moment to assess the harm sequestration has wrought, and fix it to prevent more damage. But the extreme nature of the House Republican demands has made a ‘clean’ budget resolution with spending cuts intact the compromise position in the debate.”

Digby: “The Democrats already folded. Sequestration is now the ongoing law of the land and Paul Ryan’s budget wet dream is considered the ‘clean’ continuing resolution…the Democrats have been losing on policy every step of the way since these budget battles began, even as they seem to be winning the politics. What could be more telling than the fact that the numbers in Paul Ryan’s budget are now considered the starting point in any new negotiations to end the shutdown?”

Rep. Jim McGovern (D-MA): “It’s baffling to me that the Republicans aren’t claiming victory. I’ve talked to a lot of them, privately, and a lot of them say, ‘Yeah, this is what we want. We should call it a day.’”

The point being, and with the caveat that a crisis situation has its own dangerously combustive logic — who knows what happens once ambitious, patently amoral dudebros like Ted Cruz and Paul Ryan call the shots? — the ACA fight is mostly a big shiny object to keep the fringiest of the right-wing loons happy and everyone else distracted. However much further down the rabbit hole the Republicans intend to take us — and it seems like they now want this to bleed right into the debt ceiling fight for maximum destructiveness — they’ve already got what they wanted in many of the ways that matter. They’re happier than a pig in slop whenever government seems broken. They rejoice every time lazy Beltway media pundits shrug and publish he-said, she-said stories about DC dysfunction. And they for all intent and purposes won their Austerity budget the moment Senate Democrats sent back and began pushing a “clean”-CR — meaning a government funded at sequester levels — as the compromise solution.

So, yeah, it’s a demoralizing time in Washington and no mistake — especially since, if anything, we’ll be lucky if the White House doesn’t try to step into the breach with another social-insurance-slashing Grand Bargain at some point. Hope and Change! But ah well, at least they keep making movies.

Party Like It’s 1928.

“Most of the coverage has focused on the rate of change for incomes of the top 1 percent, particularly the fact that the top 1 percent have enjoyed 95 percent of all income growth from 2009 to 2012. But I want to focus on levels. I’m going to modify one of Saez’s charts to show something I don’t think has been pointed out.”

Per Mike Konczal of Rortybomb, writing over at Next New Deal: In 2012, the Top 1% (notwithstanding capital gains, which only slightly changes the picture) took home the largest share of the national income since 1928. Socialism!

Strange Voices Are Saying…

“I don’t think there’s much hope at this point in blocking the nomination from the outside; apparently a chief executive can make terrible choices for dodgy reasons whenever he wants, as we’ve learned time and again…It’s good to be the king, especially when the court is so cowed (and by court I mean the professional DC liberal class).”

As rumors fly that — despite the obvious terribleness of the pick — Obama has virtually settled on Larry Summers as Fed Chair, David Dayen wonders aloud if this is all part of a Grand Bargain redux:

“You’re a President with a very tough set of fiscal fights coming up. You’ve wanted entitlement reforms for five years, but cannot get it worked out. You’ve been playing footsie with the Senate Republican caucus all year. Now you’re in a situation where you need Republican votes…I mean, any rational human would have given up on grand bargaineering by now…[but now] the White House can argue that they simply had to go along with, I don’t know, the chained CPI measure they put in their own budget, because it was a way to ‘get’ Larry Summers, among other things.” Frighteningly plausible.

Welcome to the Machine.

“We end up with a question of just how long the slow decay of existing systems (many of them admittedly dysfunctional) will go on without anyone, technocrat or otherwise, having to deal with the fact that the needs that created those systems remain as acute as ever while the ability of our society to satisfy those needs is more and more deficient…Defund the schools in Philadelphia and the children of Philadelphia who can’t flee to private institutions or move with families to the suburbs are still there. Incentives can only push so much dust under the rug before the rug itself is mounded high to the ceiling of the room.”

In a less-than-positive review of the administration’s recently-proposed higher education reforms — in short, Race to the Bottom for colleges — Tim Burke attempts to explain the madness behind Obama’s technocratic method. “Technocrats live in the wonderland of the question marks in the Underpants Gnomes business model, endlessly fussing over the exact terms of Point #1 and certain that the Profit! of #3 will follow.”

Also, I said this in the Virtually Speaking chat the other day, but we’ve tried this sort of business-minded technocratic leadership before in America — It didn’t pan out. (Burke post by way of Tropics of Meta.)

Worse than Enron? Shrug.

“Look at the numbers. Of the $410 million, $125 million represents the disgorgement of illicit profits from Morgan’s scheme — money the bank wouldn’t have collected at all if it operated within the law. (The sum is supposed to be returned to ratepayers.) So that doesn’t count. The real punishment is the balance of $285 million. How badly will that hurt JPMorgan Chase? Well, the big bank collected $97 billion in net revenue last year, so it represents a little more than a single day of intake.

Ask yourself: If you could steal $125 million, with the only downside being that if you got caught you might have to give the money back and lose a single day’s income, would you give it a go? Me too.”

On the announcement that J.P. Morgan will be paying a pittance for engaging in massive Enron-style energy fraud, the L.A. Times‘ Michael Hiltzik calls out the regulatory sham for what it is. “Our top regulators actually think they’ve gotten the better of a huge illegal enterprise, which is a good sign that they’re delusional. They didn’t even get Morgan to admit that it had done anything wrong.”

It’s tempting to hate on FERC for agreeing to this sucker’s deal, but let’s face it, this type of wink-and-a-nod, Potemkin oversight is endemic across our supposed regulatory agencies. (See also: the (lack of) fallout from JP Morgan’s Whale Trade.)

It used to be, not even all that long ago, people and companies who engaged in systemic energy and financial fraud went to prison. Now…not so much. Today, they not only continue to be treated as esteemed citizens by the highest levels of government — They even have the temerity to complain they’re being over regulated.

Meanwhile, our ostensibly progressive administration spends much of its days trying to prosecute whistleblowers and poor people to the fullest extent of the law. Some system. Honestly, if you’re not disgusted at this point, you’re not paying attention.

The Minimum is Not Enough.


“As of today, it’s been four years since the last increase in the federal minimum wage, to $7.25 per hour, or $15,000 per year for full-time work…[T]he current level, by all measures, is just too low…[I]f it had kept up with inflation since its peak in 1968, the federal minimum wage would now be $10.75 an hour. And if the minimum wage had grown along with workers’ productivity, it would be as high as $17.19 today.”

After four years of inaction, CEPR examines the costs of a stagnant minimum wage. Conversely, raising the minimum to $10.10 an hour — as supported by 80% of Americans — would create an estimated 300,000 jobs and add $33 billion to the economy. So you’d think Congress would get on that, yes? Umm…

In very related news, a new AP poll finds that, as a result of stagnant wages, income inequality, and a deteriorating job market, fully 80% of Americans experience poverty, unemployment, and deprivation at some point in their lives. “By 2030, based on the current trend of widening income inequality, close to 85 percent of all working-age adults in the U.S. will experience bouts of economic insecurity.” The American Dream, now with Vegas casino odds.

The Tao of Steve.

“Graduates from College — Gets Hired.” In the Burgeoning Meme department — and as a counterpoint to the recent trolling of the youth of today in TIME — experience the wit and wisdom of Old Economy Steve. “Fights Universal Healthcare at All Costs — Bitches About $5 Medicare Co-Pay for Viagra Refill.”

Too Big to Countenance.

“Today, the nation’s four largest banks — JPMorgan Chase, Bank of America, Citigroup and Wells Fargo — are nearly $2 trillion larger than they were before the crisis, with a greater market share than ever. And the federal help continues — not as direct bailouts, but in the form of an implicit government guarantee. The market knows that the government won’t allow these institutions to fail. It’s the ultimate insurance policy — one with no coverage limits or premiums.”

Joining ranks across the partisan divide, Senators Sherrod Brown and David Vitter introduce legislation aimed at ending Too Big To Fail: “The senators want the major banks to increase their own tangible equity so that shareholders, and not just taxpayers, take responsibility for their risky actions. They want the banks to have greater liquidity by holding more assets they can immediately turn into cash in a financial crisis. They say they want to keep Wall Street banks that enjoy government backing from gaming the financial system with credit derivatives and other risk-inflated schemes, which even JP Morgan Chase’s own employees failed to catch until too late.”

Naturally, the banks will be fighting this with everything they have, and Goliath usually wins these fights in Washington. They’re already leaning on one of their favorite Senators, Chuck Schumer, to block Brown from ascending to Chair of the Senate Banking Committee. Nonetheless, the progressive-conservative alliance here suggests, at the very least, a new wrinkle in the game.

In related news, companies are also wheeling out the Big Guns to threaten the Securities and Exchange Commission over potential new corporate disclosure rules for political spending — namely, making businesses disclose their campaign donations to their shareholders. Seems innocuous enough, but of course, “[t]he trade associations lining up in opposition to the rule amount to a roll call of the most politically influential — and highly regulated — industries in the country.”

For Want of a Spreadsheet Check…

“This error is needed to get the results they published, and it would go a long way to explaining why it has been impossible for others to replicate these results. If this error turns out to be an actual mistake Reinhart-Rogoff made, well, all I can hope is that future historians note that one of the core empirical points providing the intellectual foundation for the global move to austerity in the early 2010s was based on someone accidentally not updating a row formula in Excel.”

As Mike Konczal of Rortybomb explains, the Reinhart-Rogoff paper “Growth in a Time of Debt,” which argued that high debt-to-GDP ratios stymie growth and has been one of the key economic foundations for recent deficit hysteria, turns out to be fundamentally flawed.

“This has been one of the most cited stats in the public debate during the Great Recession,” embraced by both Paul Ryan and the Washington Post. And it’s totally upside down. As Konczal says, “[t]he past guides us…it tells us that a larger deficit right now would help us greatly.”

Update: Dean Baker weighs in. “If facts mattered in economic policy debates, this should be the cause for a major reassessment of the deficit reduction policies being pursued in the United States and elsewhere. It should also cause reporters to be a bit slower to accept such sweeping claims at face value.”

Don’t Blame Me, I Voted for Kodos. | Deficits Now!

“Barack Obama proposes a painful hit to middle-class and working-class seniors, in return for an increase on taxes on the rich so small that they will hardly notice. Bargain? Yes. Grand? Not so much. By legitimating changes that could lead over time to the conversion of Social Security into a means-tested program for the elderly poor only, Barack Obama has proven himself to be a true and worthy successor of his predecessor, George W. Bush.”

As Obama — to no one’s surprise who was watching the last two years closely — definitively reveals he wants to go all Nixon-in-China on Social Security, Michael Lind notes the many similarities between Bush and Obama on social insurance. “Both Bush and Obama crafted their Social Security plans solely with an eye to the approval of the bipartisan economic elite, most of whom prefer cutting Social Security benefits, which they don’t need, to raising taxes on members of their class.”

One key difference: When Dubya tried to slash Social Security benefits in 2005, Democrats stood up as one against him. Now that an ostensible Dem is in the White House and wants to enact social insurance benefit cuts for ridiculous reasons, not so much. But this time, we can’t countenance the usual Third Way spinelessness. As PCCC’s Stephanie Taylor said: “‘You can’t call yourself a Democrat and support Social Security benefit cuts…The President has no mandate to cut these benefits, and progressives will do everything possible to stop him.’”

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“People really don’t like deficits…But hold on a second. Why do we hate deficits? ‘Balancing the budget’ sounds really nice, but what reason do we have to believe it’s actually valuable?” In the WP and in very related news, Dylan Matthews punctures the various talking points driving deficit hysteria:

We’re broke! America is going to be bankrupt! We’re really not. The U.S. Treasury never has to default on any of its debts. That’s because we control our own currency. If we owe debts and don’t have the tax revenue to pay them, we can always just print the money and hand it over. That may not be the best approach, and in the very worst-case scenario this leads to hyperinflation so bad that defaulting is the less-bad option. But we’re so far from that situation today that worrying about it doesn’t seem worthwhile.”

***

Update: “The president’s major purpose is not to address mass unemployment, not to build a new foundation for the economy, not to revive the middle class or redress Gilded Age inequality. The president’s overriding priority is to cut a deal – and a deal that continues to impose austerity on an already faltering recovery.”

As Obama’s budget is officially released — $2 of spending cuts for every dollar in revenue is NOT a good thing. See also: Austerity in EuropeRobert Borosage reads the administration the riot act. See also Bob Kuttner: “You can understand Republicans wanting to crush government and hoping to slow the recovery in a way that harms the Democrat in the 2014 midterm elections. But what is the president thinking?…Now voters can conclude that they can’t trust either party.”

Oh yeah, and all that happy talk about addressing climate change and raising the minimum wage in the State of the Union? You won’t see it in this budget. Meanwhile, the GOP are loading up the cannons.

The Dismal, Ignoble Science.

“The obvious medicine for a slump due to inadequate private-sector demand is to run government deficits large enough to restore the economy back to its potential. The private sector isn’t going to increase demand on its own, no matter how much we profess our love for job creators. That is the simple reality. But instead of preaching what the textbooks prescribe, much of the economics profession has become enamored of numerology, telling us that all hell will break loose if the debt-to-GDP ratio crosses some magical number.”

CEPR’s Dean Baker, one of the only economists to anticipate the collapse of the housing bubble, calls out his many colleagues currently collaborating in the deficit witchhunt. [Y]oung people today can expect many more years of dire labor market conditions, because the remedies that could turn around their job situations have been blocked by nonsense spewing from economists. Incidentally, this situation works out very nicely for those on top, who are enjoying the benefits of record-high profit shares, which have also helped to fuel a soaring stock market.”

Along very similar lines, here’s James K. Galbraith on the state of economics in 2002:

“Leading active members of today’s economics profession, the generation presently in their 40s and 50s, have joined together into a kind of politburo for correct economic thinking. As a general rule — as one might expect from a gentleman’s club — this has placed them on the wrong side of every important policy issue, and not just recently but for decades. They predict disaster where none occurs. They deny the possibility of events that then happen. They offer a “rape is like the weather” fatalism about an “inevitable” problem (pay inequality) that then starts to recede. They oppose the most basic, decent, and sensible reforms, while offering placebos instead. They are always surprised when something untoward (like a recession) actually occurs.

And when finally they sense that some position cannot be sustained, they do not re-examine their ideas. Instead, they simply change the subject. No one loses face, in this club, for having been wrong. No one is disinvited from presenting papers at later annual meetings. And still less is anyone from the outside invited in. Only the occasional top-insider-turned-dissident — this year the admirable Stiglitz — can reliably count on getting a hearing.

Fear of a Phantom Right.

“Broockman and Skovron find that legislators consistently believe their constituents are more conservative than they actually are. This includes Republicans and Democrats, liberals and conservatives. But conservative legislators generally overestimate the conservatism of their constituents by 20 points…This finding held up across a range of issues.”

Put another way, when it comes to our elected representatives, the best lack all conviction while the worst are full of a passionate intensity. A new study finds politicians consistently overstate the conservatism of the American electorate. Which may be why we’re all very busy discussing ridiculous cuts to everything in Washington right now, instead of working harder to create jobs and foster economic growth.

Inequality is Way UnCool.


A must-watch going around the Interweb: A fellow who sounds not unlike the guy from King Missile explains concisely and succinctly how terrible wealth inequality has gotten in America. “Since 1976, the share of national income earned by the top one percent of workers has nearly tripled, from 9 percent to 24 percent…While the earnings of the top 1 percent have tripled, the average household income has effectively stagnated.”

In very related news, the Dow reaches a new high — 14,164 — even as household income hits a decade low. “As a percentage of national income, corporate profits stood at 14.2 percent in the third quarter of 2012, the largest share at any time since 1950, while the portion of income that went to employees was 61.7 percent, near its lowest point since 1966.”

Children of the Atom No Longer.

“‘There is enormous angst in the field,’ said Michael S. Turner, a physicist and cosmologist…After canceling the Superconducting Super Collider, which would have been the world’s most powerful physics machine, in 1993, and shutting down Fermilab’s Tevatron in 2011, the United States no longer owns the tool of choice in physics, a particle collider.”

As CERN in Switzerland becomes the new frontier in particle discoveries, physicists worry the United States is falling behind. “How such efforts will fare in this age of sequestration and federal cutbacks is unknown, he admitted, but particle physics has produced important spinoffs into medicine, including imaging devices and beams to treat cancer, and in materials science.”

The High Cost of Deficit Hysteria.

“Greater risk of wildfires, fewer OSHA inspections and a risk of more workplace deaths, 125,000 people risking homelessness with cuts to shelters and housing vouchers, neglect for mentally ill and homeless Americans who would lose services, Native Americans getting turned away from hospitals, cuts to schools on reservations and prison lockdowns. There’s also a higher risk of terrorism with surveillance limited and the FBI potentially unable to disrupt plots, closed housing projects, and 600,000 women and children thrown off WIC. In short: Unless a budget deal is cut, the country will be in deep trouble.”

It’s not just pandas and sea lions: Chris Good of ABC News lists fifty-seven terrible consequences America can expect from the looming sequestration, the deep automatic cuts resulting from the August 2011 debt ceiling deal that — unless action is taken — are set to go into effect on March 1st. Among the probable damage: 700,000 jobs lost. “With the House in recess and with Obama playing golf [with oilmen] over the weekend, a deal does not appear imminent.”

There’s a lot of back-and-forth going on in Washington right now about whose fault these lousy sequesters are. Clearly, the GOP loved the idea back when, and they’re the ones preventing any action on averting the cuts now. So make no mistake — if these deep and indiscriminate cuts go into effect, it’ll be because the GOP wants them. It’s the same reason they hold up disaster relief constantly, and are currently holding the US Postal Service hostage — Because they seem to get an ideological kick out of seeing Big Guvmint fail at its basic responsibilities.

That being said, let’s remember: The president handed House Republicans a loaded gun. It takes a very short-term view of things to forget how, throughout 2010, 2011, and 2012, President Obama actively fomented the deficit witchhunt, and continued to promote both Simpson-Bowles and a deadly Grand Bargain even as it became patently obvious that investment, spending, and economic growth should be the order of the day. (By the way: Not in the Simpson-Bowles package of deficit-defeating awesomeness? The corporate tax loophole that just made Erskine Bowles $114,000.)

In short, this lousy sequester is the GOP’s baby, yes. But it’s also the ultimate consequence of both parties trafficking in unresponsible hysteria over a phantom problem for years one end. Now the chickens have come home to roost, and our fragile economic recovery, weakened by several years without any serious stimulus, faces a real crisis. Let’s be clear: This crisis was not caused by the illusory danger of deficits, but because Republicans and the administration both, when the chips were down in August 2011, elided over basic economic sense and instead embraced the nonsense of austerity.

Update: The Story of the Sequester in GIF form, via AFSCME, and Sequestered Development, a not particularly inspired mash-up of Arrested Development and recent events.

Pay-to-Play, Enshrined. | The Veal Pen.

[I]n establishing OFA and through it extending an open palm to Washington’s corps of lobbyists and their masters, Obama is in danger of hitting the history books as a president who gamed, exploited, and ultimately joined a corrupt system rather than cleaning it up…Millions of Americans voted for Barack Obama thinking he understood what’s happening and would do something about it. Instead, he’s making things worse.

Common Cause president Bob Edgar reads Obama the riot act for his many transgressions on the campaign finance front. “He still has time to change course and I’m enough of an optimist to hold out hope that he will. But it’s getting tougher.” On this as on so many other fronts, I myself am no longer that optimistic. (Obama Lucy picture via this Atlantic Monthly article.)

“We talk a lot about broken models. The DC progressive model is broken. It does nothing but facilitate the injustices readily evident in this case.” In related news, and in the wake of his recent Salon piece about the administration’s phantom financial fraud task force, Dave Dayen argues its time for progressive organizations in DC to get adversarial or go home. Well-meaning people all over this country concerned about any number of issues hand over their hard-earned money to these groups, and they aim to speak broadly for liberal values. The accountability doesn’t stop on Wall Street. It needs to be shared by the DC progressive community.”

Update: “There’s a certain conventional wisdom that President Obama wants stronger campaign finance laws, and to protect our democracy from the corrupting effects of money in politics. It’s a story that you should no longer believe.” The Sunlight Foundation weighs in against Obama as well. “The arc of the Obama presidency may be long, but so far, it has bent away from transparency for influence and campaign finance, and toward big funders.”

Warren vs the Banksters.


“People may have outrage fatigue about Wall Street, and more stories about billionaire greedheads getting away with more stealing often cease to amaze. But the HSBC case went miles beyond the usual paper-pushing, keypad-punching­ sort-of crime, committed by geeks in ties, normally associated­ with Wall Street. In this case, the bank literally got away with murder – well, aiding and abetting it, anyway.”

In Rolling Stone, Matt Taibbi explains how and why the Justice Department refused to prosecute HSBC for sundry violations of the law. In short, they were Too Big to Jail. “An arrestable class and an unarrestable class. We always suspected it, now it’s admitted. So what do we do?”

In related news, Wall Street bankers throw one of their customary hissyfits over a gaggle of fully complicit, bought-and-paid-for regulators finally being asked a hard question or two by the Senate Banking Committee — thanks to its and our new champion, Senator Elizabeth Warren. “The anonymous banker followed up [with Politico, naturally]: ‘Elizabeth Warren and Ted Cruz are dueling for the title of ‘most extreme fringe freshman senator.”

Anonymous Banker, let me choose my words carefully: Go fuck yourself. If this administration’s promises of change-we-can-believe-in were worth a dime, you and so many others would be doing hard time right about now.

The Clown has a Point.


Hey all. Apologies yet again for the lack of updates around here. As I said a couple of times last year, I’m still figuring out where the old Ghost fits in the scheme of life these days. There’s a negative feedback loop happening where I don’t post at GitM that often, so fewer people swing by here, so there are no comments or feedback on the posts that I do spend some time on, which makes me even less inclined to post, so thus even fewer people swing by here…you get the point.

I was thinking of starting up the movie reviews around here again for 2013, but having just spent a looong time on another giant project that few if any will ever peruse, I’m not really seeing the point of dedicating myself to spending even more hours of my day writing long-winded reviews that nobody ever reads. It’s just a lot of work with very little gain. I’ve been writing this blog for over 13 years and the reviews for over ten — If either were ever going to gain an audience, they would have done so by now.

As for politics…eh. On the domestic front, all reasonable and common-sense attempts at achieving forward progress have been stymied for years now, mainly because of bipartisan infatuation with a totally fake problem. Sure, Obama (finally) talked a good game last night about climate change, voting rights, infrastructure, equal pay, housing, the minimum wage — things we expected from a progressive president four years ago, and that would undeniably make a profound difference for a lot of American families. But this is year five of this presidency — We know the score by now. When push comes to shove, he’ll be promoting Simpson-Bowles nonsense, extolling the Grand Bargain again, and advocating a chained CPI, all because, presumably, those evil, evil Republicans made him. Good cop, bad cop.

Over on foreign policy, our Hope-and-Change president has accorded himself the power to kill anyone he so desires by executive fiat. And the response? Ostensible progressives back this ridiculous play, and a full 83% of America is totally cool with Death from Above without due process. Awesome.

Speaking of due process, it is flat-out-ridiculous that we live in a world where Aaron Swartz was hounded to suicide by a DoJ-enabled Javert for freeing up JSTOR articles, of all things, and Bradley Manning is kept in a tiny box as Public Enemy #1 for exposing bad behavior by the military. And yet, our national torture experiment has still gone unpunished (because, hey, it worked!), and not a single bankster of note has been prosecuted, despite the massive levels of fraud that have been exposed and that brought the American economy to its knees. To the contrary, the president can’t stop asking self-serving and patently corrupt assholes like Jamie Dimon and Lloyd Blankfein how we can better structure our public policy to cater to their whims.

Admittedly, I partake in it myself semi-often, but I’m just tired of a Twitter-driven political-journalism culture that seems to think that the lulz of Marco Rubio being really thirsty is a more pressing issue to cover than the myriad holes in his obviously stupid, self-serving, and faith-based ideas. Or that Jack Lew having a funny signature is a more vital point to discuss about the probable next Treasury Secretary than whatever the hell he was doing at Citigroup when the goddamned house was burning down.

I hate on the hipster Twitter kids, but establishment journalism is even worse. We live in a world where the totally inane Politico rules the roost and “wins the day”. Where our papers of record will keep warrantless wiretaps and drone bases quiet for years because the powers-that-be asked them to. Where idiot right-leaning “centrists” like David Brooks, David Gergen, Gloria Borger, and Cokie Roberts are queried for their inane views constantly, even though they don’t know anything and have never done anything with their lives but constantly mouth Beltway platitudes as if they were Holy Scripture. Where “journalists” like Chuck Todd, John King, and Jake Tapper — the latter of whom, let’s remember, made it big by kissing-and-telling on his Big Date with Monica Lewinsky — are taken seriously because they tsk-tsk about deficits like Serious People™ and passively nod along whenever obvious liars are lying. This isn’t journalism. It’s Court Stenography, Versailles-on-the-Potomac.

Ain’t no use jiving. Ain’t no use joking. Everything is broken. So, no, I don’t feel particularly inclined to talk about politics these days either, because there’s only so many times you can bellow in rage about it all, especially when nobody swings by this little corner of the Internet anyway. I’m not officially quitting GitM or anything, but let’s be honest. I’m not really what sure when, if ever, it’ll get its groove back. I’m not sure I see the point. And besides, as Richard said, a withdrawal in disgust is not the same as apathy.

Panetta/Burns or Bust.


“Think of the economy as a car, and the rich man as a driver. If you don’t give the driver all the money, he’ll drive you over a cliff. It’s just common sense.” As a public service announcement of sorts, the estimable C. Montgomery Burns explains the fiscal cliff. (See also Tom Tomorrow on this.)

The 39% of Americans with an opinion about Bowles/Simpson is only slightly higher than the 25% with one about Panetta/Burns, a mythical Clinton Chief of Staff/former western Republican Senator combo we conceived of to test how many people would say they had an opinion even about something that doesn’t exist.” Speaking of a different Burns — Conrad, not Monty — a Public Policy Polling survey finds that Simpson-Bowles fares only slightly better than completely imaginary legislation in the public mind. As it should!

Actually, if you’re a looking for a good summary of the Simpson-Bowles plan, it’s hard to beat this one by Kevin Baker (via Past Punditry): “A prescription for hunting down every last remaining vestige of the middle class in this country and beating it to death with a stick…By the way, if the notion of putting a crazy old, obnoxious right-wing coot and Bill Clinton’s chief fund-raiser at Morgan Stanley in charge of a committee to make the very richest people in America still infinitely richer while at the same time ripping open the underbellies of working people in this country from stem to stern seems like a puzzling idea coming from the great avatar of hope and change, you’re onto something.

Also in PPP’s findings: “49% of GOP voters nationally say they think that ACORN stole the election for President Obama. We found that 52% of Republicans thought that ACORN stole the 2008 election for Obama, so this is a modest decline, but perhaps smaller than might have been expected given that ACORN doesn’t exist anymore.” [rimshot]

The Grand Bargain…Isn’t.

A simple historical fact: There is no political payoff for Democrats in presiding over governmental austerity. The evidence goes far back to long before Bill Clinton.” Historian Rick Perlstein explains what should be obvious to every Democrat worthy of the party name: America didn’t vote for a Grand Bargain. “Barack Obama didn’t win by promising a grand bargain…He won despite it. Democrats won’t win in the future by ‘reforming’ entitlements. If they do it, they will lose, precisely because of it, and possibly for generations. If he believes things to be otherwise, God help the party of Jefferson and Jackson.”

Along the same lines, Paul Krugman explains why no bargain is a better option than a bad deal. “Mr. Obama essentially surrendered in the face of similar tactics at the end of 2010, extending low taxes on the rich for two more years. He made significant concessions again in 2011, when Republicans threatened to create financial chaos by refusing to raise the debt ceiling. And the current potential crisis is the legacy of those past concessions. Well, this has to stop — unless we want hostage-taking, the threat of making the nation ungovernable, to become a standard part of our political process.

So, is the president listening? Well…er…the jury’s out. Right now, White House spokespersons are emphasizing Obama’s flexibility and the president himself has said that we have to “continue to take a serious look at how we reform our entitlements.” Which is horseshit, quite frankly, because, as Galbraith pointed out in 2010, the Very Scary Deficit Projections everyone’s using to keep this slash-Social-Security-and-Medicare train hurtling along are, in a word, bunk.

In the meantime, the 2011 iteration of the Grand Bargain has leaked, and it’s as terribad as you might imagine.

The Change is Us. It Has to Be.

So, how about that Election Night? Once you factor in that the ridiculous gerry-mandering of 2010, coupled with Obama’s terrible, coattail-cutting first debate performance, killed any chance of Democrats retaking the House, Tuesday night went about as well as it possibly could. Every swing state except North Carolina swung blue. The Senate kept some of its best progressives (Sanders, Brown) and added a few more very promising contenders (Warren, Baldwin). Gay marriage and marijuana decriminalization both made important footholds. California moved to end Howard Jarvis’ Tax Revolt, now in its fourth decade. And the Republicans — again, the House notwithstanding — were routed, and their cruel Ayn Rand-inflected ideology decisively repudiated at the polls.

All things considered, it was a great night, and all the more for what it portended about elections to come. Ever-growing in recent years, the Rising American Electorate — unmarried women, people under 30, people of color — showed its power on Tuesday night, displaying its centrality as the backbone of our new Democratic coalition and sending Karl Rove, Bill O’Reilly, and other White Men of a Certain Age into very public paroxysms of despair. (Good times. Enjoy that 2004 experience, y’all.) And while the Republican base is looking long in the tooth these days, our Democratic coalition is only continuing to grow.

As I noted in 2010, even despite the dismal showing then, demography is destiny, and the rest of the country is and will continue to experience Californication. Today we got the first taste of what a really multicultural America will be like at the polls. See also David Simon of The Wire and Treme on this: “A man of color is president for the second time, and this happened despite a struggling economic climate and a national spirit of general discontent. He has been returned to office over the specific objections of the mass of white men. He has instead been re-elected by women, by people of color, by homosexuals, by people of varying religions or no religion whatsoever. Behold the New Jerusalem. Not that there’s anything wrong with being a white man, of course. There’s nothing wrong with being anything. That’s the point.

So, all in all, 2012 was a great victory for we progressives, and things are suddenly looking up. But, of course, we’ve been here before.

I really hope President Obama and his closest advisors are looking at the same demographic realities as the rest of us, and that he decides to spend his second term governing closer to what he promised back in 2008. But I trusted in hope last time around, and, needless to say, that didn’t get it done.

The fact of the matter is our Democratic standard-bearer, at least up to this point, is behaving and governing in a fashion that is clearly to the right of the growing Democratic base that got him elected and now re-elected. No more benefit of the doubt: It is up to us to put pressure on this administration to make sure they hold to the promises they’ve made. That work has to begin right now.

We all know what’s coming up first, and Glenn Greenwald already laid out the dismal pattern we can expect — and need to break — on the Grand Bargain front. True to form, Peter Orszag — and what does it say about our president’s priorities that he staffed up his first administration with this kind of jackass? — has already sent out the let’s-fiddle-with-social-security trial balloon. Erskine Bowles’ name has been aggressively floated as the new SecTreas and High Inquisitor in the matter of the Deficit Witches. By all accounts, President Obama seems to think he can play Nixon-in-China on Social Security and Medicare. But this is not at all why voters gave him a Democratic mandate, and that’s exactly the sort of wrong-headed notion, coupled with Katrina, that turned the electorate against Dubya in 2005.

In his victory speech on Tuesday night, President Obama continued his recent turn toward the progressive rhetoric of citizenship and self-government. He said: “The role of citizens in our Democracy does not end with your vote. America’s never been about what can be done for us. It’s about what can be done by us together through the hard and frustrating, but necessary work of self-government. That’s the principle we were founded on.”

On one hand, I should be overjoyed that the President has taken this rhetorical turn, since it’s something I’ve been pushing for here for as long as GitM has been running. At the same time, President Obama has shown over the years an irritating penchant for co-opting progressive rhetoric only to serve centrist, corporatist, and/or neoliberal ends. It would be a shame if we let that happen again.

A presidency really concerned with fostering civic responsibility and self-government would look quite different than the one we have experienced up to this point. In the strictest and most literal sense, it would acknowledge, sometime before the second-term election night, that both our voting and campaign finance systems have been broken for decades, and require a significant overhaul. But, even more than that, a philosophy of encouraging citizenship and self-government presupposes different priorities and different policies.

First and foremost, to paraphrase Franklin Roosevelt, it would recognize that necessitous men and women are not free men and women, and work harder to ensure everyone has the basic economic liberty to choose their own path through life. It would not, to take just one example, make the center of their housing reform a foreclosure program designed to help banks rather than homeowners.

An administration advocating citizenship and self-government would do more to emphasize the fundamental importance of education at all levels, and invest mightily not just in schools and teachers but in after-school programs, early childhood education, anti-poverty and anti-hunger initiatives, and all the other efforts that can help alleviate the various and persistent environmental factors limiting children’s potential in America. That requires a significantly different and more comprehensive approach to the education issue than simply competitive grants that reward grant-writing skills and teaching to the test.

It would mean emphasizing a conception of citizenship that is broader and richer than just a world of workers, consumers, and automatons — one that, as per Walt Whitman, Ralph Waldo Emerson and Herbert Croly, encourages introspection, critical thinking, and self-exploration. This is a hard nut to crack, of course. But at the very least we could fight to give more men and women freedom from the necessities of work to do whatever it is they want to do. We are not just our jobs, or at least we shouldn’t be, unless that’s what we want. That means pushing for a higher minimum wage, equal pay for men and women holding the same job, increasing access to affordable child care, more worker protections, and a shorter work week.

Emphasizing self-government only works if the political system remains accountable to its citizens. That means, along with voting and campaign finance reform, working to break the hold of any particular special interest over the political process — namely, corporate power. But as Matt Stoller, Glenn Greenwald, and others have noted, this administration has perpetuated and even accelerated a two-tiered system of political and economic justice in America. The losses of bankers and corporate elites have been subsidized by the public, even when they clearly broke the law. Meanwhile, the average homeowner and debtor has been disparaged and left on their own underneath a crushing burden — so much so that inequality has actually increased over the last four years. Similarly, the Bush-era torture regime has been swept under the rug, while whistleblowers have been aggressively prosecuted. This will not do.

Meanwhile, even though Obama himself has been a user of illcit drugs, as have the last several presidents, there has been no attempt at all by this administration to undo the drug war destroying communities and putting so many in jail — Quite the contrary, in fact. Nor has this administration done anything to stop the reprehensible practice of private prisons selling their “workforce” as forced labor.

Citizenship is a bond — Being a citizen means that one is part of a larger community and has a stake in it, a sense that we’re all in it together. So emphasizing citizenship means investing in big projects and big ideas that bring the American community together in larger purpose, from a massive rebuilding of America’s infrastructure to a re-energized space program to a WWII-sized response to the climate change crisis. Instead, this administration has trafficked in deficit hysteria for several years, and clearly plans to bring another dose of it in the months and years to come. Meanwhile, the biggest project we have been involved with as a people in recent years is expending blood and treasure on remaking Afghanistan and Iraq. This, it is now clear, has been not just a considerable waste of public resources, but a policy that has resulted in thousands and thousands of lives lost around the world.

Especially in America, where we are tied together not by blood but by an idea, being a citizen also means agreeing on a story — a shared narrative that ties the members of the community together. Because our connection is a story — even a fiction, some might say — it is all the more important that our government uphold the founding values of that story. (As Charles Pierce eloquently argues here, this is why Obama’s re-election is important independent of everything else — it reaffirms our conviction that race is no longer any barrier to the highest office in the land.) But, quite obviously, this administration has not lived up to our founding ideals in many ways, especially with regard to how it has prosecuted the War on Terror. As Mark Danner says in the piece I just linked, “President Obama has taken a position so strongly in favor of unremitting military violence that he has left his Republican rival, struggle though he may to shoulder his way past him, no place to stand.” And let’s be honest: As a party, we Democrats utterly failed to call the president out on this.

So, yes, an emphasis on citizenship and self-government could very well be the basis of a new progressive politics. But, unless he makes a marked shift from his first term, I fear this president is just going to use these words as a new rhetorical toolbox to push for more half-assed, neo-liberal Third Wayisms and lousy Republican ideas from the mid-80′s. We face dire problems in this country, and yet this administration is somehow afraid to even consider the time-tested New Deal ideas, from public works to the HOLC, that worked in the past.

The only way President Obama will make that progressive shift, it is now clear, is if the American people push him in that direction. In this, what Obama said on election night is absolutely correct. No matter what the president has said on the campaign trail, we can no longer hope this administration will bring change we can believe in. He is going to have to be forced into it by a Democratic electorate that refuses to accept anything less. It’s not a coincidence that the two progressive reforms Obama finally embraced this year — same-sex marriage and the DREAM Act — were ones that had passionate, vocal, and uncompromising reform movements behind them.

The election results showed that progressives are and can be ascendant in America. But we need to be much tougher on this administration than we have been in the past. Lip service to good intentions and progressive ideals is no longer satisfactory. And that hard work of keeping this administration in line has to begin right now, before the tentpoles of our current social insurance system are chipped away at by way of Grand Bargain.

Democrats just elected this president for a second time, and we don’t want to see any more compromising with and capitulating to economic terrorists. It is past time for this president and this administration to do right by us.

The Rightward Drift.

What you saw, I think, anyway, was…the end product of thirty years of a Democratic Party that has slid so far to the center-right that a Democratic president found himself arguing with a ‘severely conservative’ Republican candidate over the issues of how much the Democratic president had cut out of the budget, how many regulations he’d trimmed, how much more devoted to the middle-class-kick-in-the-balls Simpson-Bowles ‘plan’ he is, and how he would ‘reform’ Social Security and Medicare — and, frankly, a Democratic president losing some of those arguments to his left.

Hey all. Haven’t given up on the blog again, but I am in the midst of the final ascent on the old dissermatation. (With two more hopefully brief chapters to go, I just rounded page 1055. Yes, I know. This whole thing has just gotten out of hand. Ohhhh well. Everybody needs a coping strategy.) Anyways, between that and work GitM is back to being neglected for a few weeks. In the meantime, I strongly endorse this Esquire piece by Charles Pierce on exactly why Obama stunk up the bed so badly in the first Republican primary debate general election debate.

Basically, if you give America a choice between a Republican and a Republican, the Republican will win every time. The problem wasn’t Obama had an off night. The problem is this former great hope of the left actually believes Simpson-Bowles is a good idea (it isn’t) and that the deficit is a huge problem (it’s not.) Even while the Obama campaign is trying to convince us to get more than just a wee bit cult-y “For All”, the Grand Bargain train is already leaving the station.

In short, we seem to have reached a point where so many top Democrats have spent so many years doing the protective camouflage thing that they’ve completely forgotten which way is up. As a party, we are now clearly to the right of Nixon and verging on being right of Reagan. The president’s stinker of a performance on Wednesday was just a clearer-than-usual, real-time manifestation of the Democratic Party’s deeper dilemma: We have lost our way.

The Fed, Unreserved.

“Fed action this week was also primed by the Jackson Hole conference from a few weeks ago. There, two important papers and a statement by Ben Bernanke set the tone of the future of monetary debate during the Great Recession. Let’s examine them in animated gif format.” The estimable Mike Konczal of Rortybomb explains current monetary policy through animated gifs.

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