Ghost in the Machine
Obamanomics
The Tao of Steve.
Too Big to Countenance.
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…
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!
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.’”
“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 Europe — Robert 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.
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.
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.
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.
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.
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.”
The Grand Bargain…Isn’t.
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.
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.
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.
More of the Same.
Change you can believe in? If you relished the first term but really wished the White House would fold a winning hand even more often, the president has your back for Term 2. Because, in the face of 8% unemployment, 15% poverty, and rising seas, what America really needs right now is more mealy-mouthed centrism, hysteria about a fake problem, and rank capitulation to domestic terrorists. Real Democrats please. Our party has lost its way — We’re now rather clearly to the right of Nixon and coming up on Reagan these days.
Mitt’s Serious Man™ is Clownshoes.
Unfortunately, Mitt choosing Paul Ryan this morning means we’re probably going to be stuck with the media treating the Congressman from Wisconsin like he’s a Very Serious Person™ for at least the next three election cycles. But on the bright side, I’ve already said everything I need to say about this clownshoes, so I’ll just direct you to my post on Ryan from last year. And if you don’t particularly feel like clicking through, here’s the meat of what I said, below.
“For months, as you all know, the Serious People in the media have been banging the drum of the deficit witchhunt even though, from an economic perspective, austerity at this hour makes about as much sense as Birtherism. And, in the past few weeks, they have doubled down on this idiocy by trying to elevate the most recent flavor of the month, Wisconsin Congressman Paul Ryan, as a Serious Man, come to tell us hard truths about the need for sacrifice.
In fact, Congressman Ryan is scarcely any less of a huckster than the Donald. This is a guy who laments the intrusions of the welfare state at every turn, but only made it to college thanks to Social Security benefits received upon the passing of his father. (To be fair: Ryan is only emulating his hero with this sort of hypocrisy.) This is also a guy who, when confronted with the Clinton budget surpluses of a decade ago, then lamented that the debt was too small.
And this is a guy whose budget proposal — which he was quick to deem not a budget, but a cause — is basically the same vile, stale concoction of malice and magical thinking that the right has been peddling for decades. It uses made-up numbers to argue that privatizing Medicare (and leaving seniors with the bills), slashing the social safety net, and lowering taxes on the rich will somehow end deficits and save America. (Short answer: It won’t.)
By any reasonable standard, the Ryan budget should have been laughed out of the room as soon as it dropped. But, no, the press needed A Serious Man™ on the right for its lazy he-said, she-said approach to any political story. And, so Ryan got the Trump treatment and the rest is history. Ostensibly liberal pundits fell over themselves praising Ryan’s budget. In response, the president eventually drew progressive kudos for pitching his own deficit reduction plan. (More on that in a sec.) With both sides established, the press can now continue to happily indulge in the usual medley of content-free, he-said, she-said inanities that, to them, constitutes political journalism. And everyone in Washington can continue to ignore the fact that, actually, more spending, not cutting the deficit, is what is needed to fix the economy right now. Win-win!
Regarding President Obama’s deficit proposals, he delivered an eloquent speech on the subject last month, to be sure — one of his best as president. But, even if we hadn’t already been burned far too many times by his rhetoric not matching up to his policies, it’s hard for me to take his remarks as some great moment of the left just because he finally articulated what should be pretty basic principles of American government. Particularly when you consider that the Obama plan is, of course, center-right-leaning, and yet it has nevertheless become the left pole in an exceedingly narrow economic debate.
(By the way, if you’re really worried about the long-term deficit, the answer isn’t rocket science. Try raising taxes on the rich. Or passing real health care cost controls. Or going where the money’s at. Or growing the economy and putting people back to work. Or, y’know, doing nothing — that would work too.)
In sum, the Trump boomlet of last month was not the exception. It was a clear and distilled expression of the rule, a sideshow to a sideshow. And because the Village press is so terrible, our entire politics is distorted — We are living out the consequences of this disaster yet again in the deficit debate. Only the sheer amount of money flooding the system right now is a bigger political problem than the broken state of the newsmedia.“
Bowlesed over.
“For the Obama administration, Bowles has a number of qualifications. For one thing, Republicans adore him. Ryan has called him ‘my favorite Democrat.’ Appointing Bowles to be Treasury Secretary would ensure a smooth confirmation, and it would be interpreted as a sign of goodwill and ‘seriousness’ both by Republicans and by the media.“
Er…Not a single one of those are pluses. And neither the Republicans nor the media are in any way serious anymore, and they haven’t been for close to two decades. So why cater to them? In any case, Ezra Klein starts floating Erskine Bowles, one of the high priests of the deficit witchhunt, as the second term Treasury Secretary. Actually, Ezra, that’s a fucking terrible idea, because guess what? The deficit is not and has never been a real problem, and you should know that. Nonetheless, folks, start girding yourself for the Grand Bargain…Our president has made it patently clear that that’s the direction he plans to head should he be granted a second term. And this is pretty much why I won’t be posting about Election 2012 here all that often.
Attack of the Furry Stomach.
“‘Quite frankly, his behavior is abhorrent,’ said Gardner, who emphasized that Digby does nothing to provide for the Chambers family, subsisting entirely on free handouts. ‘This asshole’s chowing down like he’s in a pie-eating contest. Meanwhile, the nation’s credit rating has been downgraded for the first time in history, and everyone’s fucking job is moving overseas. And he does know we’re fighting a war, too, right? Unbelievable.’“
My favorite Onion piece in a few moons: Pet Eating Like Country Isn’t In Goddamn Recession. “According to reports, the 5-year-old labrador appears callously unswayed by the constant stream of gloomy market forecasts and instead demands greater and greater supplies of dog food, to the point where he must think the Dow Jones industrial average is soaring through the fucking roof or something.“
Calvin, Job Creator.
Also making the rounds on Facebook, this ancient Calvin & Hobbes strip anticipates the socialized-losses-for-me-but-not-for-thee mindset of contemporary “job creators.” Thank goodness they only have one-and-a-half major political parties behind them to back their play.
Decades of Divergence.
“In its report, the budget office found that from 1979 to 2007, average inflation-adjusted after-tax income grew by 275 percent for the 1 percent of the population with the highest income…By contrast, the budget office said, for the poorest fifth of the population, average real after-tax household income rose 18 percent. And for the three-fifths of people in the middle of the income scale, the growth in such household income was just under 40 percent.“
A brand-spankin’ new CBO report concludes what we all already know: Income inequality has surged since 1981, and government, post-Reagan, has consistently failed to address the problem. “‘The equalizing effect of federal taxes was smaller’ in 2007 than in 1979, as ‘the composition of federal revenues shifted away from progressive income taxes to less-progressive payroll taxes,’ the budget office said.” But, hey, let’s sweat that deficit.
Bailout 2: BoA Boogaloo.
“This move reflects either criminal incompetence or abject corruption by the Fed. Even though I’ve expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail.“
Along the same lines, Naked Capitalism‘s Yves Smith responds to the disclosure that repeat offender Bank of America is trying — with the Fed’s help — to foist their more toxic assets into FDIC-backed accounts (meaning that taxpayers will eat the losses.) “[T]his move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral.“
Continues Smith: “The FDIC is understandably ripshit…Bill Black said that the Bloomberg editors toned down his remarks considerably. He said, ‘Any competent regulator would respond: ‘No, Hell NO!’ It’s time that the public also say no, and loudly, to yet another route for running a drip feed from taxpayers to banksters.‘” (Cartoon via here.)
The Wisdom of the Deficit Owl.
“What fiscal crisis? The great unasked question in this summer of sound-and-fury is ‘why?’ The United States has many problems at the moment: a high-and-stubborn unemployment rate, a foreclosure catastrophe, a slowing economy that has not recovered and will not recover…and the ongoing challenges of infrastructure, energy and climate change. Fiscal crisis? The entire thing is a figment, made up of wise-men’s warnings repeated endlessly.“
James K. Galbraith, who warned of the deficit witchhunt a year ago, weighs in on the debt ceiling endgame currently playing out in Washington, as well as Obama’s role in it:
“[W]hat do we have, from a President who claims to be a member of the Democratic Party? First, there is the claim that we face a fiscal crisis, which is a big untruth. Second, a concession in principle that we should deal with that crisis by enacting massive cuts in public services on one hand and in vital social insurance programs on the other. This is an arbitrary cruelty. Third, a refusal to stand on the strong ground of the Constitution, against those whose open and declared purpose is tear that document and the public credit to shreds.“
Yep, that’s about it. When it became clear that Obama had fully inhaled voodoo economics and was once again going to give away the store in these needless negotiations, I said on Twitter: ““I’ll take [Boehner/Cantor/Lannisters/Littlefinger] at his word!” I just realized: Obama negotiates like Ned Stark. Now, winter is coming.“
But, really, that gives this president too much credit. He’s not a nobly deluded sap. He’s getting exactly what he wants: a Third Way-approved Grand Bargain that takes money out of a sputtering economy and needlessly slashes our social insurance system, all in response to a problem that is basically imaginary.
But, of course, the chatterers and the Serious People™ will applaud this bargain as being wise, centrist, and independent no matter what damage it causes — hey, only Nixon can go to China! And all the while the economy and labor market will continue to tank. What a fucking fiasco. [Rorschcat via here.]
Sixty hours, and what do you get?
“Just counting work that’s on the books (never mind those 11 p.m. emails), Americans now put in an average of 122 more hours per year than Brits, and 378 hours (nearly 10 weeks!) more than Germans. The differential isn’t solely accounted for by longer hours, of course–worldwide, almost everyone except us has…a right to weekends off, paid vacation time, and paid maternity leave. (The only other countries that don’t mandate paid time off for new moms are Papua New Guinea, Sierra Leone, Liberia, Samoa, and Swaziland. U-S…A?)“
It used to be a central tenet of progressivism was working to shorten the work week. Now, even unemployment-soothing innovations like workshare go nowhere, and, as Mother Jones‘s Monika Bauerlein and Claira Jeffrey explain (with handy graphs), we are all victims of the Great Speedup…but not the beneficiaries. “For 90 percent of American workers, incomes have stagnated or fallen for the past three decades, while they’ve ballooned at the top, and exploded at the very tippy-top…In other words, all that extra work you’ve taken on — the late nights, the skipped lunch hours, the missed soccer games — paid off. For them.”
This is Why We Can’t Have Nice Things.
“There is a dignity in the Hoover Dam, a massiveness that speaks to a grand national purpose. A country — our country — decided to build it…Great works of infrastructure provided jobs and returned an incredible social investment. It is inconceivable to imagine the modern economy without the vast investments in infrastructure made by preceding generations — everything from rural electrification to developing the Internet.“
Ex-Grayson staffer (and friend) Matt Stoller dissects the lack of political will for infrastructure reinvestment in today’s political climate. “Ultimately, of course, we will have no choice but to rebuild our infrastructure or risk social collapse…Meanwhile, the ideological fight is not over whether to spend more on infrastructure. It’s whether we should privatize what’s left.“
Proving Matt’s point is this thoroughly sad column by ex-Biden Chief of Staff Ron Klain, a man who until very recently was a senior advisor to the president. (Now, he works for a “private investment firm,” natch.). Says Klain: “Hoover Dam nostalgia is misguided…[I]t’s time to let go of the idea that a handful of marquee construction projects, even majestic and lasting ones, can solve our employment problem. Such endeavors alone didn’t bring us out of the Depression in the 1930s, and they won’t end our current predicament.“
Uh, is anyone actually saying that we should only do “a handful of marquee construction projects“? No, no, they’re not. They’re saying we should build big things, build small things, rebuild and repair things big and small, and otherwise put people back to work in any way possible. Where’s the vision? It’s going to take something a mite bigger and more audacious to get the economy moving again than an employer-side payroll tax cut.
A Reckoning At Last?
“The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents. Two of the firms, including Bank of America, refused to cooperate with the investigations, according to the sources.“
As the alleged perps try to get off by paying the (to-them) meager sum of $5 billion, a confidential audit conducted by HUD finds (surprise, surprise) compelling evidence of rampant foreclosure fraud at the big banks. “The audits accuse the five major lenders of violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government…The audit on Bank of America finds that the company — the nation’s largest handler of home loans — failed to correct faulty foreclosure practices even after imposing a moratorium that lifted last October.“
And, in very related news, someone has finally stepped up to the plate with regards to the roots of the financial crisis: New York Attorney General Eric Schneiderman has announced he’s officially going to look into the Street’s role in precipitating the meltdown. “The inquiry appears to be quite broad, with the attorney general’s requests for information covering many aspects of the banks’ loan pooling operations.” Godspeed, Mr. Schneiderman.
Another D’oh From Simpson.
“Told that the data came directly from the Social Security Administration, Simpson continued to insist it was inaccurate, while misstating the nature of a statistical average: “If you’re telling me that a guy who got to be 65 in 1940 — that all of them lived to be 77 — that is just not correct. Just because a guy gets to be 65, he’s gonna live to be 77? Hell, that’s my genre. That’s not true,’ said Simpson, who will turn 80 in September. Understanding life expectancy rates at age 65 in 1940 is central to understanding Social Security itself.“
In keeping with his informative interview with Alex Lawson last fall, former Wyoming Senator and co-head of the president’s deficit commission Alan Simpson — while railing against AARP — proves once again knows as little about Social Security as he does about hip-hop. So, yeah, by all means let’s put him in charge of social insurance “reform.”
“Simpson’s forceful gesture came after an extended diatribe against Social Security, which he said is a ‘Ponzi’ scheme, ‘not a retirement program.’ Simpson argued that Social Security was originally intended more as a welfare program.” Um, no. But, in Simpson’s defense, the president who appointed him also harbors some misunderstandings about Social Security. And at least the Senator is right on public financing of elections. So, there’s that.
Too Big to Jail.
“Lloyd Blankfein went to Washington and testified under oath that Goldman Sachs didn’t make a massive short bet and didn’t bet against its clients. The Levin report proves that Goldman spent the whole summer of 2007 riding a ‘big short’ and took a multibillion-dollar bet against its clients, a bet that incidentally made them enormous profits. Are we all missing something? Is there some different and higher standard of triple- and quadruple-lying that applies to bank CEOs but not to baseball players?“
In Rolling Stone, a simile-happy Matt Taibbi reiterates the open-and-shut fraud and perjury case against Goldman Sachs that was laid out last month in the Levin report — a case that, thus far, nobody in a prosecutorial position seems to be taking up. Too busy going after Wikileaks, I guess.
“To recap: Goldman, to get $1.2 billion in crap off its books, dumps a huge lot of deadly mortgages on its clients, lies about where that crap came from and claims it believes in the product even as it’s betting $2 billion against it. When its victims try to run out of the burning house, Goldman stands in the doorway, blasts them all with gasoline before they can escape, and then has the balls to send a bill overcharging its victims for the pleasure of getting fried.”
Enabling the Hucksters.
“‘Trump’s presidential run is no longer being treated as serious by the easily distracted and resolutely frivolous political press that covered it so thoroughly just a few short weeks ago. While it was always an unamusing joke…we had what felt like a lifetime of New Hampshire trip coverage and Piers Morgan interviews and ‘President Trump? It might be more likely than you think!’“
With last month’s embarrassing Trump boomlet seemingly run its course in the Village, Salon‘s Alex Pareene comes to bury, not praise, the Donald. “[T]ransparent idiocy didn’t cause the press to take Trump less seriously, but it did lead people to gradually grow to hate Trump, which made his ratings suffer, and the exposure of the artifice of the Trump persona was decidedly damaging to his ‘brand.’ Once your ‘brand’ has been damaged, say goodbye to credulous political press coverage!“
To be honest, I couldn’t care less about Trump, and mostly avoided all of his Birther shenanigans as they were unfolding two weeks ago for the same reason I try to avoid any political coverage — from right or left — of the “You won’t believe what Sarah Palin just posted on Facebook!” variety. It’s lazy, it’s boring, and it’s actively pernicious given all the real problems we face right now. (But at the very least, both Trump and Palin are noteworthy indicators of how far the GOP done fell.)
I’m only posting on this now to point out that the Trump boomlet was by no means a one-time-thing. When the President of the United States actually had to come on TV two weeks ago to prove he was an American citizen, there was much pearl-clutching by the Village press about what a travesty this had all become. “What a sad day in American political history,” lamented MSNBC’s Chuck Todd. Meanwhile, the Washington Post opined that the release “says something embarrassing — actually, make that disturbing — about the state of American politics” — soon after that newspaper of record invited Trump to the White House Correspondent’s Dinner. (An evening, by the way, that’s as good as reflection as any of how desiccated and domesticated today’s establishment press has become.)
For his part, ABC’s Jake Tapper — a fellow who, let’s remember, got his big break as a hard-hitting journalist by kissing-and-telling on Monica Lewinsky back in the day — tried to defend the press by pointing to a Pew study which found that the deficit debate was actually the most-covered news story of the week. The problem with this line of argument is that conducting lousy journalism in one arena does not absolve you of conducting lousy journalism in another. And in fact, Village criers have been just as incompetent and/or duplicitous on the deficit.
For months, as you all know, the Serious People in the media have been banging the drum of the deficit witchhunt even though, from an economic perspective, austerity at this hour makes about as much sense as Birtherism. And, in the past few weeks, they have doubled down on this idiocy by trying to elevate the most recent flavor of the month, Wisconsin Congressman Paul Ryan, as a Serious Man, come to tell us hard truths about the need for sacrifice.
In fact, Congressman Ryan is scarcely any less of a huckster than the Donald. This is a guy who laments the intrusions of the welfare state at every turn, but only made it to college thanks to Social Security benefits received upon the passing of his father. (To be fair: Ryan is only emulating his hero with this sort of hypocrisy.) This is also a guy who, when confronted with the Clinton budget surpluses of a decade ago, then lamented that the debt was too small.
And this is a guy whose budget proposal — which he was quick to deem not a budget, but a cause — is basically the same vile, stale concoction of malice and magical thinking that the right has been peddling for decades. It uses made-up numbers to argue that privatizing Medicare (and leaving seniors with the bills), slashing the social safety net, and lowering taxes on the rich will somehow end deficits and save America. (Short answer: It won’t.)
By any reasonable standard, the Ryan budget should have been laughed out of the room as soon as it dropped. But, no, the press needed A Serious Man™ on the right for its lazy he-said, she-said approach to any political story. And, so Ryan got the Trump treatment and the rest is history. Ostensibly liberal pundits fell over themselves praising Ryan’s budget. In response, the president eventually drew progressive kudos for pitching his own deficit reduction plan. (More on that in a sec.) With both sides established, the press can now continue to happily indulge in the usual medley of content-free, he-said, she-said inanities that, to them, constitutes political journalism. And everyone in Washington can continue to ignore the fact that, actually, more spending, not cutting the deficit, is what is needed to fix the economy right now. Win-win!
Regarding President Obama’s deficit proposals, he delivered an eloquent speech on the subject last month, to be sure — one of his best as president. But, even if we hadn’t already been burned far too many times by his rhetoric not matching up to his policies, it’s hard for me to take his remarks as some great moment of the left just because he finally articulated what should be pretty basic principles of American government. Particularly when you consider that the Obama plan is, of course, center-right-leaning, and yet it has nevertheless become the left pole in an exceedingly narrow economic debate.
(By the way, if you’re really worried about the long-term deficit, the answer isn’t rocket science. Try raising taxes on the rich. Or passing real health care cost controls. Or going where the money’s at. Or growing the economy and putting people back to work. Or, y’know, doing nothing — that would work too.)
In sum, the Trump boomlet of last month was not the exception. It was a clear and distilled expression of the rule, a sideshow to a sideshow. And because the Village press is so terrible, our entire politics is distorted — We are living out the consequences of this disaster yet again in the deficit debate. Only the sheer amount of money flooding the system right now is a bigger political problem than the broken state of the newsmedia.
Same as It Ever Was.
“Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals — whether born of incompetence, timidity in the face of a crisis or a mindset too closely aligned with the banks it was supposed to rein in — may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy.” On his last day on the job, outgoing special inspector general for TARP Neil Barofsky laments the failures of the program he oversaw.
In very related news, see also NYT columnist William Cohan on the same subject yesterday: “Not only did the government’s theory fail in practice — unemployment remains relentlessly and historically high and American businesses seem intent on hoarding, rather than spending, the $2 trillion in cash on their collective balance sheets — but it also lost a once-in-a-century opportunity to change the mores of a momentarily chastened Wall Street, which remains badly in need of substantive reform. This is more than a shame; it is prima facie evidence of how deep Wall Street’s hooks have been — and continue to be — into the powers that be in Washington (and vice versa).“
The Priorities of the Serious People™.
“This chart puts the class war in simple, visual terms. On the left you have the ‘shared sacrifices’ and ‘painful cuts’ that the Republicans claim we must make to get our fiscal house in order. On the right, you can plainly see WHY these cuts are ‘necessary.’” Via JackDean and several other sites, This is What Class War Looks Like.
But, hey, Win the Future and all that.
The Village Plays Hathorne.
“Even worse than that is the common assertion by these millionaire pundits that ‘we all’ must sacrifice for the greater good and allow Social Security to be slashed. This is usually spoken with such a tone of lugubrious forbearance that one imagines they would like us to believe that while they might be forced to become Wal-Mart greeters in their elder years, patriotic duty demands we all pitch in. They seem to have no idea that the median wage in this country in 2009 was $26,261 — sadly, lower than it was in the year 2000.“
In very related news: In The Hill, Heather D. Parton of Digby fame rails against establishment media’s complicity in the deficit witchhunt. “It’s very easy to prescribe ‘shared sacrifice’ when you will not personally sacrifice anything at all.”
Obama Ghraib.
“‘There can be no conceivable justification for requiring a soldier to surrender all his clothing, remain naked in his cell for seven hours, and then stand at attention the subsequent morning,’ he wrote. ‘This treatment is even more degrading considering that Pfc. Manning is being monitored — both by direct observation and by video — at all times.‘”
Sometimes I don’t post here because I’m really busy. Sometimes I don’t post here because the news is too damned depressing: The United States takes another big step towards Miniluv by applying Dubya-era torture and intimidation techniques to an American citizen in custody for leaking, Bradley Manning. (Y’see, it’s a four lights = five lights kinda thing. Manning has to break — and then, like Zubadayah and KSM, voice untruths — for there to be any sort of possible criminal conspiracy case against Wikileaks.)
What is there to say, really? State Department spokesman P.J. Crowley already correctly stated that this abusive treatment of Manning was “ridiculous, counterproductive, and stupid,” and, within days, he was fired for stating the obvious.
The president, meanwhile, assures us everything is ok because the Pentagon said so: “I have actually asked the Pentagon whether or not the procedures that have been taken in terms of his confinement are appropriate and are meeting our basic standards. They assure me that they are.” This, as Glenn Greenwald (who’s been on top of this all the way) points out, is exactly the same rationale Dubya used to use: “‘When [Bush] asked ‘the most senior legal officers in the U.S. government’ to review interrogation methods, ‘they assured me they did not constitute torture.’” Well, ok then.
So let’s review. Dubya’s administration constructs an illegal and unconstitutional torture regime — Nobody goes to jail, and nothing changes. (Look forward, not backward!) The Dubya administration lies to the American people in order to prosecute a war of choice in Iraq. Nobody goes to jail, and nothing changes. Through greed and outright fraud, Wall Street traders implode the global economy to the tune of trillions of dollars, and, with the convenient exception of Bernie Madoff, nobody goes to jail, and nothing changes. (Synthetic junk, anyone?) Big banks continue their crime spree by engaging in a massive epidemic of foreclosure fraud, and nobody goes to jail (but we’ll make them promise not to do it again!)
Oh, and an Army private leaks “secret” documents (so secret they were available to millions of people) because “[h]e wanted people held accountable and wanted to see this didn’t happen again” — the very definition of whistleblowing — and now we’re treating him like Winston Smith. (Then again, our president does despise whistleblowers.)
Should Manning be in U.S. custody right now? Yes. He took an oath to the United States military and, knowing full well the consequences, broke it in an act of civil disobedience. If you can’t do the time, don’t do the crime — I get that. But should Manning be abused and tortured in U.S. custody? Of course not — Nobody should be. In fact, I thought we elected Barack Obama as president to make sure this never happened again.
Nope, sorry. Instead, President Obama fired Crowley and is owning what’s happening to Manning right now. He also just reinstated and normalized indefinite detentions at Gitmo. (Obama the constitutional scholar? Meet the Fifth and Sixth Amendments.) And when not perpetuating Dubya-era illegalities, he (and new lefty-bashing chief of staff) spend their days talking up the deficit, talking down regulation, and hoping the Chamber and the NRA take their meetings. Feel those winds of change, y’all. (Obama meme pic above via here.)
Update: “Based on 30 years of government experience, if you have to explain why a guy is standing naked in the middle of a jail cell, you have a policy in need of urgent review.” P.J. Crowley reflects on his recent firing. “I stand by what I said. The United States should set the global standard for treatment of its citizens – and then exceed it. It is what the world expects of us. It is what we should expect of ourselves.“
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