What’s at stake in the State of the Union

Outsourced to Charlie Pierce:

In any event, thanks to Ezra Klein’s invaluable House Of Wonks, we discover that all the howling about The Deficit has obscured the fact that, whatever real problems with the deficit are, they’re actually being slowly solved. This is a good thing to remember since it’s better than 6-5 that almost all the commentary after the president’s speech tonight is going to carry the theme that he didn’t do enough to address The Deficit. Here is something else to remember — given that chart, anyone who still argues for austerity in any form — and this means you, Dancin’ Dave [Gregory, of NBC -- Lex] — is doing so because they want government to hurt people, or they don’t give a damn whether it does or not. There’s no third alternative.

We don’t need deficit-fixin’. We need hirin’. Lots of it. Now.

Quote of the Day

From Steve M. at No More Mr. Nice Blog:

… we think we live in a democracy, but mostly we just watch the rich fight. We just get lucky when a few of them fight on our side.

President tells truth, Senate Republicans only CLAIM he’s giving then hell.

Senate Republicans have been misbehaving, the president finally calls them out on it, and what do they do? They whine. Pardon me while I refuse to give a damn.

I’ve looked at clods from both sides, now …

Pretty much every single professional journalist in Washington, and a lot of regular Americans, think there are virtues to be had in balance, moderation and centrism. Perhaps as an extension of that belief — for it certainly is not on the basis of even moderately complicated economics, or, for that matter, mathematics — they believe that both the rich and the poor must give something up to address the nation’s budget issues.

(I refuse to call them budget problems, let alone crises; they are issues in the way that we say that sociopaths have issues in that they are the perfectly predictable, and pretty well predicted, results of predictably sociopathic decisions made by known sociopaths.)

So a lot of people who either ought to know better, or who do know better but stand to profit from pretending otherwise, are out there arguing that we need to screw the rich a tiny bit and the middle class and poor a lot to “fix” the deficit (which is fixing itself pretty nicely at the moment, plunging dramatically as a percentage of GDP, but never mind that) and that if both sides are angry, as they are about the nonexistent Simpson-Bowles “report,”  then we must be doing the right thing. The problem, of course, is that not all anger is justified, valid, moral or even sane, as Charlie Pierce reminds us:

Can we please have an honest assessment of credibility here? If billionaires are angry because they might have to chip in some boutonniere money on April 15, and a middle-class family is angry because their 82-year old grandmother with Alzheimer’s is lying in her own filth in a substandard nursing home because of Medicare “reforms,” are we honestly saying that the anger of both sides is equally justified? Has anyone even asked that question?

To the best of my knowledge, no one in the DC media has asked this question, and my friend Doug Clark at the N&R, who’s usually much more sensible, doesn’t seem to be concerned with it, and, hey, I’ve got a blog, so I thought I’d raise it here.

“I’ve got $3 in my wallet and it feels like a million.”

My friend and fellow blogger Billy Jones has been through a rough few years. He just had an experience most of us who are more comfortable would describe as somewhere between bad and awful. And yet, in a message to me, he calls it a small victory.

I’ll let you decide just how small.

Spain dances with the devil, and the newspaper El País’s CEO leads

If you’ve followed the European economy much, you probably know the following things:

• Spain has been particularly hard hit by the 2008 crash and its aftermath, with official unemployment at 25% and youth unemployment at 52%.
• Spain’s problems were almost all caused by the collapse of the housing bubble. Before that, the country was running a surplus.
• Nonetheless, the EC (read: German bankers who don’t want their bonds to take it in the teeth) are forcing austerity measures onto Spain that are making a horrific situation worse.

And here’s something you might not know: A newspaper editor who once helped fight off a military coup against a fragile new democracy is now a newspaper CEO who has joined the rapine:

“When you look at it from here, it doesn’t seem like there’s a crisis on,” observed one of the striking El País journalists I spoke to later that evening, gesturing at Madrid’s central shopping district, lights and logos glistening in the rain. But he said it wearily – he was above the cut-off age of 50, specifically earmarked by El País chief executive Juan Luis Cebrián as too old to be needed. A week before the high profile general strike, the newspaper’s employees were on strike over the “ere,” a kind of mass lay-off with next to no severance pay that had been enabled by the new labor reforms. El País will sack 139 journalists from a workforce of 450, a plan implemented by a chief executive who, they despaired, had once been a brave, campaigning editor, using his newspaper to fight the attempted military coup in 1981 with passion and integrity, and helping to establish a new pluralistic, democratic ethos in a febrile country still feeling its way into the light after 40 years of dictatorship.

Cebrián, who takes home 13m euros a year, told his striking journalists “we can’t keep living so well.”

For those of you keeping score at home, at the current exchange rate of $1.2975 to the euro, that’s close to $17 million. So if Cebrián could satisfy himself with making a ton of money instead of a shit-ton of money, he could pay the laid-off workers an average of more than $86,300 a year and still have $5 million left over for himself.

We can’t keep living so well?

WE?

¿Quién, hijo de puta, es este de quien hablas “nosotros”? Who, you son of a bitch, is this “we” of whom you speak?

 

Also, if you don’t want to repeat after me, kids, repeat after economist Dean Baker: The deficit problem is not an entitlements problem.

Listen to the man before you go giving away your — and my — Social Security and Medicare:

The gang for gutting Social Security and Medicare (aka “The Campaign to Fix the Debt”) are running in high gear. During the long election campaign they gathered dollars, corporate CEOs and washed up politicians for a full-fledged push in the final months of the year. They are hoping that the hype around the budget standoff (aka “fiscal cliff”) can be used for a grand bargain that eviscerates the country’s two most important social programs, Social Security and Medicare.

They made a point of keeping this plan out of election year politics because they know it is a huge loser with the electorate. People across the political and ideological spectrums strongly support these programs and are opposed to cuts. Politicians who advocated cuts would have been likely losers on Election Day. But now that the voters are out of the way, the Wall Street gang and the CEOs see their opportunity.

It is especially important that they act now, because one of the pillars of their deficit horror story could be collapsing. Due to a sharp slowing in the rise of health care costs over the last four years, the assumption that exploding health care costs would lead to unfathomable deficits may no longer be plausible even to people in high level policy positions.

As we all know, the large budget deficits of the last four years are entirely due to the economic downturn caused by the collapse of the housing bubble. The budget deficit was slightly over 1.0 percent of GDP in 2007 and the Congressional Budget Office (CBO) projections showed it remaining low for the near-term future. The origin of the large deficits of the last few years is not a debatable point among serious people, even though talk of “trillion dollar deficits, with a ‘t’” is very good for scaring the children.

However, the big stick for the deficit hawks was their story of huge deficits in the longer term. They attributed these to the rising cost of “entitlements,” which are known to the rest of us as Social Security, Medicare, and Medicaid.

While they like to push the notion that the aging of the population threatened to impose an unbearable burden on future generations, the reality is that most of the horror story of huge deficits was driven by projections of exploding private sector health care costs. Since Medicare and Medicaid mostly pay for private sector health care, an explosion in private sector health care costs would eventually make these programs unaffordable.

As some of us have long pointedout, there are serious grounds for questioning the plausibility of projections that the health care sector would rise to 30 or 40 percent of GDP over the rest of the century. Recently a paper from the Federal Reserve Boarddocumented this argument in considerable detail.

Even more important than the professional argument over health care cost projections is the recent trend in health care costs. While the CBO projections assume that age-adjusted health care costs rise considerably more rapidly than per capita income, in the last four years they have been roughly keeping pace with per capita income.

In fact, in the last year nominal spending on health care services, the sector that comprises almost two-thirds of health care costs, rose by just 1.7 percent. This is far below the rate of nominal GDP growth over this period, which was more than 4.0 percent. While at least some of this slowing in health care costs is undoubtedly due to the downturn, it is hard to believe that it is not at least partially attributable to a slower underlying rate of health care cost growth.

CBO and other budget forecasters can ignore economic reality for a period of time (they ignored the housing bubble until after its collapse wrecked the economy), but if it continues, at some point they will have to incorporate the trend of slower health care cost growth into their projections. When this happens, the really scary long-term deficit numbers will disappear.

A projection that assumes that health care costs will only rise as a result of the aging of the population, and otherwise move in step with per capita income, will lop tens of trillions of dollars off the most commonly cited long-term deficit projections. It would cost some deficit hawks, like National Public Radio, more than $100 trillion of their long-term deficit story. This would be a real disaster for the deficit hawk industry.

This is why the Campaign to Fix the Debt and the rest of the deficit hawk industry will be operating at full speed at least until a budget deal is reached over the current impasse. If CBO adjusts its long-term health care cost projections downward then their whole rationale for gutting Social Security and Medicare will disappear. Now that is really a crisis.

And in light of today’s horrid front-page News & Record article on the so-called fiscal cliff, here’s a question for Greensboro peeps: Would it really be too much trouble to get Jeff Gauger and his crew at the N&R to introduce some fact-based economic coverage? The voters last week seemed to indicate a taste for that kind of thing.

OK, if you don’t want to repeat after me, kids, repeat after Kevin Drum: There. Is. No. Fiscal. Cliff.

The former Calpundit and Political Animal econowonk, now with Mother Jones, explains it all for you:

Which part has the worst effect: the spending cuts or the tax increases?

That’s tricky! CBO estimates that the effect per dollar is greater for spending cuts than tax increases: roughly a dollar of GDP for every dollar of spending cuts versus about half a dollar of GDP per dollar of tax increases.

However, the absolute size of the tax increases is much larger than the absolute size of the spending cuts. Overall, CBO estimates that the spending cuts will reduce GDP by about 0.8 percentage points; the end of the payroll tax holiday will reduce GDP about 0.7 percent; and the expiration of the Bush tax cuts will reduce GDP by 1.4 percentage points.

But wait a second. There are two parts to the Bush tax cuts: the middle-class cuts and the cuts for the rich.

Right. And here’s the thing: CBO figures that letting the middle-class tax cuts expire would shrink GDP about 1.3 percentage points.

But that’s almost the entire effect of letting the Bush tax cuts expire.

Right. And everyone agrees we should extend the middle-class tax cuts. So if we did that, but let the tax cuts on the rich expire, it would have virtually no impact on growth.

So that would make a ton of sense. Are we going to do that?

Good question! Republicans are dead set against it, so it’s going to be a big fight.

What about the payroll tax holiday?

Everyone seems willing to let that end, so that’s not really very controversial.

Why is that? It has a pretty big effect.

Beats me. It would make a lot more sense to extend the payroll tax holiday than to extend the Bush tax cuts for the rich, but Republicans are opposed to the tax holiday and Democrats have already caved in on this. Mostly it’s because they’re worried that extending it would set a precedent for keeping payroll taxes lower forever, and that would hurt Social Security’s finances.

Conversely, Republicans care a lot about tax cuts for the rich. At the moment, they claim they’ll kill any deal to avoid the fiscal cliff unless they get to keep them.

Are they serious?

Yep.

There’s more, but that’s the gist. Having just been told by voters not to blow up the economy any more, the GOP is dead set on doing and the Dems are less than fully dead set on stopping them. Sigh.

There is some good news, though. President Obama has been asking the Republicans for $1.6 trillion over 10 years in tax increases ever since the Great Debt Ceiling Joke of 2011. He campaigned for a year on that very proposal. And on Nov. 6, he won by a — what’s that word, again? Oh, yeah, landslide. So, Mitch the Turtle and the Weeping Cheeto can just take that.

Oh, and Kevin also says, for the love of God, stop talking about raising the retirement age.

Blessed — uh, I mean kicked — are the poor

Today’s sermon comes from the Rev. Athenae:

If you added up all the fraud and waste and horror that poor people supposedly cause, I doubt it would total a month’s worth of time blowing [stuff] up in Afghanistan, but hey, people on public assistance are already down, so that makes them much easier to kick.

I do not understand what we get out of this, as a society. I really, really don’t. If I thought making poor people feel like [crud] about themselves would actually end poverty maybe I’d be a little more in favor of doing it, but you know, it’s not about the objects of our charity. It’s about us, and what we deserve to do. To send outward into the world. To show others.

And all of the testing, the probing, the constant suspicion that somebody somewhere is getting away with something, that doesn’t do [anything] to make people any less poor. All it does is make those of us who are not poor a little less rich.

 

Learning from the (not-so-ancient) Greeks

Thereisnospoon (@DavidOAtkins), writing at Digby’s Hullabaloo:

It turns that when you throw a proud people who have lived a relatively decent lifestyle with modest provisions for the middle class into the desperate grinder of austerity economics, fascist movements start to develop. That’s pretty much how it happened in Germany in the first place, which is why the the rest of the world learned from its Post-WWI mistake to implement the Marshall Plan after the Second War. When people start to lose everything, it’s easy to blame immigrants and the dispossessed. Those people start to become scapegoats for the sorts of scoundrels who use jingoistic xenophobia for career advancement in the guise of patriotism.

It’s no surprise that the ascendance of the far right in the United States tracks alongside the erosion of the middle class. Fortunately, America has been spared the full force of austerity. So far.

But the rise of a Golden Dawn [Greece's fascist neo-nazi movement, now polling at 14% there -- Lex] in the U.S. isn’t at all unthinkable. All that need happen is for the Very Serious People to get their way in voucherizing Medicare and Social Security, destroying the safety net, and remaking society in Ayn Rand’s image.

History repeats itself, and sometimes, if it doesn’t feel like you heard it the first time, it shouts.

 

Our terrible, horrible, no-good, very-bad news media and the deficit; or, Don’t point that gun unless …

Economist Dean Baker:

In the middle of a steep recession, any measure that reduces the deficit will cost jobs. That is because it will reduce demand. If anyone wants to see a lower deficit in 2013 (certainly the Post does), then they want to throw people out of work.

This is sort of like pulling the trigger on a gun pointed at someone’s head. Presumably this is not done unless the desire is to see the person dead.

 

Child abuse

Economist Dean Baker:

Yes, on this great day when we hear the unemployment rate is 8.3 percent, NYT columnist Bill Keller is still pressing on the need to curb Social Security and Medicare spending and calling on his fellow baby boomers to rise to the occasion. He has even brought in Jim Kessler, the senior vice-president for policy at Third Way, to help him make the case.

I’m sure that Keller and Kessler would consider my mention of the 8.3 percent unemployment rate to be rude, after all what does that have to do with the need to cut Social Security and Medicare? There is a simple answer to that. The 8.3 percent unemployment rate should be seen as comparable to a school fire where the children are still inside the building. Tens of millions of people are seeing their lives ruined.

This is not a short-term story. Many of the families that will break up under the stress of high unemployment or the loss of their home will not get back together when the unemployment rate falls back to a more normal level. Similarly, the kids who have their school lives disrupted because their parents lose their homes or must move in search of jobs and/or family break up will not have the damage repaired later. This is why 8.3 percent unemployment should be problems #1, #2, and #3.

And yes, we do know how to fix this. Spending money puts people to work. Contrary to a bizare cult in policy circles, it does not matter whether money comes from the private sector or public sector –dollars will get people to work. And the people who get those dollars will spend them and put other people to work. If Keller and Kessler want to be responsible baby boomers they will do everything in their power to try to get us back to full employment quickly so that so many children do not have to grow up in families that are troubled by unemployment. The next generation will thank them for their efforts, I assure them.

UPDATE: Link added. H/t to Beau for alerting me to the omission.

UPDATE: Greensboro folks, this Keller piece appears on the front of today’s Ideas section in the News & Record.

Steve King’s priorities

Steve King, the dog-slaughtering mutt who represents unfortunate parts of Iowa in the U.S. House, is moving on. After creating enough jobs to reduce unemployment to below 5%, he pushed a bill today to make English the country’s official language.

What?

Oh.

“This is the gate of the Lord, enter into it, you who have fed the hungry.”

From my friend Rabbi Fred Guttman, originally posted on Facebook, via my friend John Graham:

Food Stamps – Last week, the House Agriculture Committee passed a Farm Bill which slashes $16 billion from one of the most effective anti-poverty programs in our nation, the Supplemental Nutrition Assistance Program. At the same time, the overall cost of the bill does not go down but adds an additional $9.5 billion over 10 years for an entirely new agribusiness subsidy under the guise of crop insurance. A cut of this magnitude means that at least 2 million families will lose access to the program. All told, about 1 billion fewer meals will be available to low-income families each year—meals that are a bargain for taxpayers at about a $1.60 a meal—as well as a basic responsibility for our society. 85 percent of those receiving Food Stamps are living on incomes below the federal poverty line of $23,350 for a family of four. In addition, the U.S. Department of Agriculture has calculated that each dollar of supplemental nutrition assistance benefits create $1.79 in increased economic activity. America’s “hunger bill”—the cost of avoidable illness due to poor nutrition and poor education outcomes due to hunger—is already over $165 billion.

Three points:

Here in Greensboro, both Conservative and Liberal congregations support the very needed and I would say holy work of the Greensboro Urban Minsitry. The leadership at GUM is extremely concerned about such proposed cuts.

Second, I cannot see how this is not class warfare, an example of taking from the poor to give to the wealthy.

Finally, I leave you with a small piece of rabbinical teaching from the time of Jesus himself. “When you are asked in the world to come, ‘What was your work?’ and you answer: ‘I fed the hungry,’ you will be told: ‘This is the gate of the Lord, enter into it, you who have fed the hungry’” (Midrash to Psalm 118:17)

(Some additional context, from the News & Record.)

A presumably well-meaning but misguided friend of mine took issue with this point, suggesting that government anti-poverty efforts have been both inefficient and wasteful:

Now let me be clear, I don’t object to poor people getting help. My problem is a government throwing money at programs that clearly aren’t working. Consider this: All this welfare spending adds up to $20,610 for every poor man, woman and child in the country.

For a poor family of three, that’s nearly $62,000 dollars. The poverty line for that family is just $18,500. With this kind of spending, poverty should be wiped out – instead it’s growing.

Today, one in seven Americans is living in poverty. The most in almost two decades. All the while spending is soaring.

And, welfare spending for the last four decades — adjusted for inflation? Up, up, up. How can we spend all this money, and see so little progress? …

… we should be stopping the taxes and bloated regulations that hold back economic growth and job creation. People need work, not handouts.

Unfortunately the only solution the president sees is throwing more money at the problem. More government, instead of less. More dependency instead of empowerment.

Leaving aside for a moment the “up, up, up” argument, whether or not adjusted for inflation, and whether or not more properly calculated on a per-capita basis or as a percentage of GDP, that was an awful lot of both factual and contextual inaccuracy in just a few lines. I responded:

You know what, [friend's name]? First of all, don’t change the subject. Second of all, I can sleep a lot better at night if govt money is being wasted so that people don’t go hungry than I can if it’s being wasted blowing sh*t up in an illegal war or bailing out criminal banksters.

Poverty is growing because the government hasn’t done enough direct economic stimulus to stimulate demand enough to lead businesses, which are sitting on $2 trillion in cash, to create jobs. And it hasn’t done enough because Republicans LIKE having American workers poor and desperate.

Deficits are soaring primarily because of 1) our broken health care system, the least efficient in the Western world, which the ACA at least goes some way toward fixing; 2) two wars, both of which Obama put back on budget after Bush ran them off-budget, and a defense budget unnecessarily sized at bigger than those of the next 26 largest combined, most of whom are our allies; and 3) the fact that federal taxation is at its lowest rate as a % of GDP in 60 years AND that top marginal rates on the wealthy are at their lowest rate in longer than that.

And why is that? Because of GOP obstructionism, aided and abetted by a few badly confused and/or corrupt Democrats.

You want to make excuses for screwing over poor people? Fine; go do it on your own page.

All most religions ask of us is basically that we not be dicks. And stealing food from the mouths of the hungry to give it to large corporations is being a dick.

 

 

Sorry, but, yes, the 2008 bank bailouts really were as much of a reaming of the American taxpayer as we thought at the time

Another crappy “both-sides-do-it” column: Betsey Stevenson and Justin Wolfers write at Bloomberg that our current political debate on the economy is a “sham” because leading economists unanimously agree that  the bailouts helped the unemployment situation. But economist Dean Baker provides the missing context: While that claim might be technically true, the bailouts could have been structured far more constructively than they were, both to address then-current problems and to help prevent the recurrence of similar problems:

The Wall Street banks were on life support in the fall of 2008. Without trillions of dollars of government loans and guarantees (much more came from the Fed than the TARP money that went through the Treasury), they would be dead, deceased, pushing up daisies, out of business. The boys and girls getting those huge paychecks on Wall Street were at Uncle Sam’s doorstep pleading for help. There was no one else to save them from destitution.

In this context there were three main choices. One was to drag out Mitt Romney and give them a lecture about the free market and tell them the government is not about giving people stuff. In this case the banks go under leading to a full-fledged financial melt-down. In this story, the economy certainly takes a bigger immediate hit, but the advantage is that we have a Wall Street free world. Goldman Sachs, Citigroup, Morgan Stanley, J.P. Morgan and the rest would be history. They are in receivership, waiting to broken up and sold off. This parasitic sector that has led to so much waste, corruption and inequality is no longer a drag on the economy. Consider this short-term pain for long-term gain. (Just kidding about the Romney part, he supported the bailout.)

The second choice is hand over the money, which is the route we took. Oh yeah, Congress did put conditions on the money, but we know that was just for show. One of the most disgusting things I’ve seen in my years in Washington were the excellent stories on how executive compensation was treated in the TARP that the Washington Post and Wall Street Journal ran after the TARP passed.

Both articles featured comments from compensation expert Graeff Crystal who explained that the government could have changed compensation patterns on Wall Street forever (the Wall Street boys needed the money), but Congress instead took a pass. It would have been great if Crystal’s views were part of the public debate before the bill was passed.

This brings up option number 3, hand the money over but with real conditions. Congress could have said that banks that got TARP money, funds through the Fed’s special lending facilities, or benefited from the various Treasury and FDIC insurance commitments had to:

a) strictly limit all pay in all forms for the next five years;

b) set up a clear, legally enforceable plan for writing down underwater mortgages on their books;

c) agree to a breakup schedule that would get them below “too big to fail” size by a set date.

To my mind, option #3 was clearly the best route since it would fix the financial industry and avoid the crash that would result from going cold turkey in option #1. But let’s say that the choice is just the full crash in option #1 or the handout in option #2. In order to seriously decide between these we need some basis for assessing the size of the downturn. Saying that the short-term impact would have been worse in option #2 doesn’t tell us anything about the proper policy choice. We pay short-term costs for long-term benefits all the time. We need the terms of the trade-off.

In ths respect, the commonly claimed “second Great Depression”scenario is, to use a technical economic term, “crap.”  The first Great Depression, by which I mean a decade of double-digit unemployment was not locked in stone by the mistakes made at its onset. There was nothing that would have prevented the government from having the sort of massive stimulus spending that eventually got us back to full employment (a.k.a. World War II) in 1931 instead of 1941 and without the war. The fact that we remained in a depression for more than a decade was due to inadequate policy response.

In this respect, to claim that if we let the banks collapse we would have been destined to suffer a decade of double digit unemployment is absurd. That would only be the result if we continued to have bad policy, not just in 2008, but in 2010, in 2012, right through to 2018.

The serious question is how bad could we reasonably expect the downturn to have been if we had gone the cold turkey route. The place to look for insight on this question is Argentina, which went the financial collapse route in December of 2001. This was the real deal. Banks shut, no access to ATMs, no one knowing when they could get their money out of their bank, if they ever could.

This collapse led to a plunge in GDP for three months, followed by three months in which the economy stabilized and then six years of robust growth. It took the country a year and a half to make up the output lost following the crisis.

While there is no guarantee that the Bernanke-Geithner team would be as competent as Argentina’s crew [indeed, subsequent events have shown that they are not -- Lex], if we assume for the moment they are, then the relevant question would be if it is worth this sort of downturn to clean up the financial sector once and for all. I’m inclined to say yes, but I certainly could understand that others may view the situation differently.

Anyhow, this is the debate that we should have had the time and at least be acknowledging in retrospect.

We had the bastards down in the fall of 2008, and we didn’t hit them with the chair. A century from now that failure will be considered the key turning point in the transition of the U.S. from a democratic republic to a full-on oligarchy.

You really didn’t build that.

Not by yourself, anyway, says John Scalzi:

I am financially successful now; I pay a lot of taxes. I don’t mind because I know how taxes helped me to get to the fortunate position I am in today. I hope the taxes I pay will help some military wife give birth, a mother who needs help feed her child, help another child learn and fall in love with the written word, and help still another get through college. Likewise, I am in a socially advantageous position now, where I can help promote the work of others here and in other places. I do it because I can, because I think I should and because I remember those who helped me. It honors them and it sets the example for those I help to help those who follow them.

I know what I have been given and what I have taken. I know to whom I owe. I know that what work I have done and what I have achieved doesn’t exist in a vacuum or outside of a larger context, or without the work and investment of other people, both within the immediate scope of my life and outside of it. I like the idea that I pay it forward, both with the people I can help personally and with those who will never know that some small portion of their own hopefully good fortune is made possible by me.

So much of how their lives will be depends on them, of course, just as so much of how my life is has depended on my own actions. We all have to be the primary actors in our own lives. But so much of their lives will depend on others, too, people near and far. We all have to ask ourselves what role we play in the lives of others — in the lives of loved ones, in the lives of our community, in the life of our nation and in the life of our world. I know my own answer for this. It echoes the answer of those before me, who helped to get me where I am.

Memo to Simpson-Bowles fanboys/-girls, the New America Foundation, Paul Ryan groupies and everybody else who thinks the deficit is our biggest current problem:

You cannot slash taxes AND slash spending AND still reduce the deficit. It’s mathematically impossible. You can no more reduce the deficit this way than you can walk to the moon or skin-dive the Marianas Trench.

And if you try it, we’ll be in another recession in a heartbeat. Hell, with three straight months of falling consumer spending, we might be heading into another one even if you don’t.

This really is the era of lowered expectations. I used to pray for deliverance from extremist ideologues. Now I just pray for deliverance from people who can’t count.

Dean Baker sums up our economic, political and journalistic problems in three short paragraphs

Baker:

Dana Milbank devoted his [Washington Post] column to the disenchantment of progressives with the current political situation. At one point he comments that “the still-lumbering economy has depressed President Obama’s supporters.”

While this is no doubt true, it is worth mentioning that just about all progressives said at the time that the stimulus would be inadequate to restore the economy to a healthy growth path. The collapse of the housing bubble destroyed close to $1.2 trillion in annual demand from construction and consumption. At its peak in 2009 and 2010 the stimulus only replaced about $300 billion in annual spending.

It is discouraging to see so many people suffering unnecessarily, but this outcome is exactly what our analysis predicted at the time. Unfortunately, having a track record of being right is not generally a factor in determining which views carry weight in Washington policy debates.

Somebody tell me again how the U.S. is a meritocracy. Or, as Driftglass famously observed:

Institutionalized

As befits one of the holders of prime New York Times op-ed real-estate, columnist David Brooks has analyzed American society and concluded that the problem is … us:

I don’t know if America has a leadership problem; it certainly has a followership problem. Vast majorities of Americans don’t trust their institutions. That’s not mostly because our institutions perform much worse than they did in 1925 and 1955, when they were widely trusted. It’s mostly because more people are cynical and like to pretend that they are better than everything else around them. Vanity has more to do with rising distrust than anything else.

I guess Brooks didn’t get the word about the brown acid.

Because, see, the Vietnam War, Watergate, Iran-Contra, Monicagate, torture and other war crimes, and even The New York Times helping lie this country into a war and sitting on a story about unconstitutional and criminal government wiretapping for more than a year while the guilty president who ordered it won re-election, have had nothing to do with collapse of people’s faith in institutions. Nor has the fact that the economy got blown up by the greatest white-collar crime in history while  the people responsible are still massively wealthy and the people who warned about it are continually ignored. Nor has the fact that government in general and the Republican Party in particular are hell-bent on looting this country until there is nothing left to steal.

And Jesus H. Child Molesting Vaginal Ultrasound Christ with Jimmy Swaggart Sauce and Jerry Falwell on top, what could institutional religion possibly have done to warrant such a massive loss of trust?

Without having done any polling, I’ll grant Brooks one possible point: It might actually be true that institutions aren’t performing significantly worse now than they did in 1955 (they were screwing up in 1925, too, and the result was the Great Depression). It might just be that thanks to the Intertubez, we just know more about the screwups than we used to. Certainly I don’t think the Catholic Church’s skirts were any cleaner in 1955.

But the reason followers aren’t following leaders the way they used to has nothing to do with vanity on the rabble’s part. (I and people like me don’t think we’re better than everyone else around us, but let’s face it: If Congress, the Roman Catholic Church and The New York Times op-ed page are the standard, then the bar’s really not all that high.) It’s not even explained entirely by the fact that leaders have manifestly screwed the pooch and/or sold themselves to the highest bidder, over and over again. No, what really gets our goats is that if you have enough money and/or profess to believe certain things, you can commit the most calamitous misfeasances, utterly without consequence — indeed, you can make a career out of failing upward – while those who were right are marginalized and ridiculed.  Blogger Driftglass has neatly encapsulated the phenomenon:

That last bit’s the most maddening part, and for Exhibit A, you need look no further than David Effing Brooks himself,  sitting in his comfy office at the Times Almighty and pulling meretricious and/or delusional observations out of his lower digestive tract, not only getting to keep his lucrative job but actually being celebrated as a public intellectual. He has decided that this country’s biggest problem is that you and I haven’t suffered enough. God help us.

What John Cole gets that the Tea Party and Scott Walker and Mitt Romney do not

This:

I was in Kroger (our chain grocery store) the other day buying a couple things of crab meat to make crab cakes for the party at Walt’s, and in front of me was a young woman with a baby in a stroller, and she was checking out, and she used food stamps, and then had to spend about five minutes counting coins to have enough to pay for her purchases (which, contrary to Republican beliefs, were not 40’s and steaks, but diapers, milk, oatmeal, and vegetables), and I remember thinking, as she was rushing and making counting mistakes, that poor girl is just humiliated and embarrassed she has to go through this. I genuinely felt bad for her. And then she turned around, looked at me and the people behind me, and apologized- “Sorry, it’s the 31st and I just have to have this stuff, and payday and everything isn’t until tomorrow.”

It was a heart-wrenching experience, and then I looked down at my purchases — crab meat, panko, buffalo mozzarella, green onions, dijon mustard, a couple bottles of wine, and some peel and eat shrimp, and I felt like the biggest most entitled [jerk] ever as I was rung up and handed the lady my debit card and then declined a receipt because “I just do my banking online and I’ll deal with it next week.” At which point I realized how debased and out of touch I am. Here is a woman buying what she can to keep her kid alive, and I’m buying luxury foods, for a party, for other people, and I’m not even worried about the price. However ashamed that young woman ahead of me was, I am sure I felt more ashamed as I understood what I had just said.

But if you ask the modern GOP, I pay too much in taxes, and we do too much for the girl in line in front of me. …  We’re just a seriously [messed]-up nation. I’m not one of those making over 250k, but by any metric in the world I am rich beyond the wildest dreams of historical standards (although, admittedly, it takes a lot less to be “rich” in WV). Please, please, please, politicians. Raise my taxes. Spend it on food stamps, job training, road and bridge construction. Spend it on child care, nursery school, and child development. Anything but more god damned wars and tax cuts for Mitt Romney.

Odds and ends, school break edition

I’m really enjoying not having to study, but I haven’t been hit by the inspiration for anything lengthy. So here’s what’s going on:

* * *

Pretty much everybody thinks Rupert Murdoch isn’t fit to run a media company. And, hell, we know that. But when Parliament thinks Rupert Murdoch isn’t fit to run a media company, well, that could have real-life, tangible, bottom-line consequences. Because the UK doesn’t let just any old thieving, lying, wiretapping raper of the hopes of the parents of kidnapped children own a media company the way the U.S. does. No, News Corp. could have to actually divest itself of its 40% share of BSkyB. Ouch.

* * *

So on the anniversary of Osama bin Laden’s death, Obama shows up in Afghanistan and commits this country to spend, at the current rate of $2 billion a week, one and a quarter trillion dollars over the next dozen years in that country. One and a quarter trillion dollars, I hasten to add, that the United States cannot spare. I mean no disrespect to the victims of 9/11, and a great deal of respect to the Americans who have had to fight the resulting military campaigns, when I ask: Tell me again who won the war on terror? and/or, Have you people never heard of Pyrrhus?

* * *

I see that not only do the Republicans want to wage war on women, they insist that only straight men can join the fight.

* * *

Finally, Fec reflects on MLK’s call for a national guaranteed minimum income, varieties of which have been endorsed by such wild-eyed liberals as Milton Friedman (who called it a “negative income tax”):

Consider, if you will, that the oligarchy, by virtue of access to the Fed’s ZIRP [zero interest rate policy -- free loans to banks], has already achieved the status of guaranteed income. Was MLK in reflection so terribly wrong? As we contemplate the end of unemployment benefits for 700k of our citizens, and underemployment for many more, do not the ravages of outsourcing and global corporatism render a circumstance where the least of us is just as entitled to at least a wage of existence as the bankster supping at the .25% discount window, especially as the proceeds are immediately fed into a gamed engine of guaranteed profit?

If we are bailing out the Europeans for their folly, is it nor more just to provide subsistence wages to our own whose only fault is absence of opportunity, particularly by design of the corporatists who enjoy the very same protections manifold?

Are we not finally at the point where Bernanke‘s famous helicopter drops cash upon the least of us, as it has surely rained bountifully upon our most fortunate?

I assure you that the poor have no wish for anarchy or the imposition of some stringent biblical reconstruction. They merely wish to enjoy those essential things we all aspire to: a full belly, a comfortable home and freedom from financial worry.

To those cretins who proclaim such an idea is socialism, I reply they are too late. Socialism is rife among the fortunate; it is merely those left out who have yet to commit this supposed sin. Is not the greatest act of fairness to now include everyone with income, given that the most criminal among us have already lined their pockets to the point of embarrassment?

If we are headed toward a great conflagration of currency devaluation and hyperinflation, is it not right that the poor finally be allowed to join the bacchanal before its end?

Actually, of this much I am sure: No matter exactly how this country goes down, it will go down never once having given any serious policy thought to the true needs of the least among us. That just isn’t how we roll.

(Also, although I am somewhat sympathetic to my friend’s view of the Occupy movement as it manifested itself today on what was supposed to be a big, national show of strength, I also am somewhat sympathetic to Charlie Pierce’s take: “From the start, I said that the best thing about the Occupy movement was that at least they were yelling at the right buildings. … What I do know is that, if it weren’t for the people in the streets last autumn, the Obama people would be running a very different campaign and Willard Romney wouldn’t look half as ridiculous as he does.”

I’m starting to think that Obama might not actually have to run a campaign

I say that because one of the first rules of politics is that when the other guy is destroying himself, don’t interrupt him. And Mitt Romney? Is destroying himself:

Yeah, all you folks who lost your jobs, got bankrupted by your medical bills, whatever, just do what this guy did and borrow twenty thousand bucks from your parents and start a fast food chain.

(And why am I not surprised that the chain in question, Jimmy John’s (at which, by the way, I will never eat again), got busted for illegally firing workers for union activity?)

I thought we’d seen it all when Bush 41 went speedboating in 1990 while U.S. troops were packing up to head for the Middle East and gas prices were shooting up. Then I thought we’d seen it all when Bush 43 ignored New Orleans and told the guy who was trying to warn him about al-Qaeda, “OK, you’ve covered your ass.” But holy crow. It’s not just that R-money doesn’t have a clue. It’s that he doesn’t have a clue which universe to find one in.

(h/t: Angry Black Lady)

We tried it your way. Again. It didn’t work. Again.

Everyone in America who has been screaming about OMGZ Teh_Deficit!!11! needs to sit down and shut up now.

As I and a lot of economists, some of them Nobel laureates, have been pointing out, America’s biggest problem NOW is not the deficit. It is lack of consumer demand, which is caused by joblessness. Deep, extended joblessness. In such an environment, cutting deficits, particularly by cutting spending, is only going to make matters worse.

Don’t believe me? Fine. Look at Britain, where they tried this asinine stunt and now find themselves not only still plagued with high unemployment but also officially in a double-dip recession.

(Helpful graphic from New York Times)

We. Need. Jobs. We. Need. Stimulus.

Our deficit problem is primarily a problem with our health-care system, the world’s most expensive and among its most wasteful, and the ’01 and ’03 Bush tax cuts. We fix those problems, we’ve got surpluses as far as the eye can see.

America: Land of opportunity?

Well, if, by “opportunity,” you mean, “scraping by and desperately hoping not to get sick”:

That’s right, folks: We’ve got a higher percentage of our work force working for less than two-thirds our median wage than any other industrialized democracy, and yet one major party insists that the answer to all our economic problems is more tax cuts for the wealthy and the other major party refuses to call this policy out for the batshit insanity that it is.

And you wonder why people are marching in the streets.

Everyone’s entitled to his own opinion, but not his own math

Dean Baker eviscerates both James B. Stewart of The New York Times and Rep. Paul Ryan’s massive tax cuts for rich folks disguised as a federal budget:

What Stewart tells us is reasonable is that the budget calls for cuts in entitlements and tax reform. He then asks who could disagree with this.

One has to wonder whether Stewart has looked at the Ryan budget. First, on taxes the only specifics are cuts in the tax rates paid by rich people and corporations. None of the offsetting tax increases are specified.

If this sounds like a sensible opening gambit, let’s imagine the equivalent on the opposite side. Suppose that we proposed to increase Social Security benefits for the bottom two income quintiles of retirees. Suppose that we also proposed increased spending on infrastructure, research and development, and education.

Suppose the left-wing Ryan budget wrote down that these spending increases would be offset by unspecified reductions in government waste. We then told CBO to score it accordingly. Is this a good starting point for further discussion? …

Even more to the point: Is there anyone who has been paying attention for the past 20 years who believes that if some leftist proposed such a budget as Baker hypothesizes, the mainstream media (forget Fox) wouldn’t go utterly batshit calling out the many problems, miscalculations and flawed assumptions contained therein, including but not limited to some that were not flawed or miscalculated at all (Politifact and Factcheck, I’m looking at you)?

The Ryan budget is proving to be a wonderful Rorschach test. We have people who want to be part of the inside Washington conversation who praise the budget’s courage and integrity. Then we have people who believe in arithmetic who call it what it is: a piece of trash.

Why does this matter? Because people who ought to know better are running round calling Paul Ryan a serious thinker, when in fact he is either unable or unwilling to do fifth-grade math, and because there’s a nontrivial chance he will be Mitt Romney’s running mate.

The crux of the biscuit …

… and the quote of the new day, from low-tech cyclist at Cogitamus:

You know, when liberating the free market makes “the United States” richer, it doesn’t do a damned bit of good for most of us unless some of that extra richness finds its way into our pockets.  But when the median household in 2010 is only 7% richer than the median household in 1973, despite the fact that we’re clearly way, WAY richer as a nation, that means our economy has failed in a very essential way.

Why, yes. Yes, it has.

Anyone who argues differently is not trying to sell you something, he’s trying to steal what little you have left.

Facts and logic having failed to persuade anyone to do the right thing with respect to the economy, I decide instead to try a good rant, outsourced to Charlie Pierce:

Austerity has murdered any hope of recovery in the UK. It seems to have done the same thing in Italy. And, in Greece, the citizens of democracy’s birthplace seem to be taking offense at the notion that their first obligation is to punish themselves to make a lot of international bankers whole again, and to cement Angela Merkel’s place in European history, which will be further propped up in Germany by an economy that depends on strong labor unions, a thriving government safety net, and the world’s oldest universal health-care system, to which Germans are entitled, but to which Brits, Italians, Greeks and, if you believe David Gregory, Americans, are not. Make no mistake about it. “Austerity” is a theological construct. It is about punishing the alleged sins of sloth and gluttony. It is about purging through pain. It is about enshrining into law every misbegotten slander about the poor and struggling that’s been floating around the political dialogue for generations. And it doesn’t work.

The deficit is not our biggest immediate economic problem. Joblessness is. Questions? See post title.

 

Popcorn; or, It’s fun to watch them eat their own

David Frum, who — have I mentioned this? Why, yes. Yes, I have — has blood on his hands, gets some more on in a good way with this stinging takedown of Charles Murray’s latest not-so-cryptoracist screed:

You are a white man aged 30 without a college degree. Your grandfather returned from World War II, got a cheap mortgage courtesy of the GI bill, married his sweetheart and went to work in a factory job that paid him something like $50,000 in today’s money plus health benefits and pension. Your father started at that same factory in 1972. He was laid off in 1981, and has never had anything like as good a job ever since. He’s working now at a big-box store, making $40,000 a year, and waiting for his Medicare to kick in.

Now look at you. Yes, unemployment is high right now. But if you keep pounding the pavements, you’ll eventually find a job that pays $28,000 a year. That’s not poverty! Yet you seem to waste a lot of time playing video games, watching porn, and sleeping in. You aren’t married, and you don’t go to church. I blame Frances Fox Piven.

When 95 percent of the American work force has got a secure job that provides enough to covers its needs, provide for occasional wants and leave a little over to be put aside toward its dreams, then I might entertain lectures from our social overlords about the morality of the lower classes. Until then, however, Murray and his ilk need to STFU.

(h/t: DougJ)

 

This would leave a mark, if The Washington Post, the administration and Congress had any integrity

Economist Dean Baker on the Post’s reporting on unemployment:

The unemployment rate for the 30 percent of the workforce with college degrees is still more than twice its pre-recession level. If the Post had done its homework it would know that the problem is not the skill levels of unemployed workers, the problem is the skill level of people who make economic policy.

 

“Those who don’t understand history are doomed to condemn those who do.”*

Those wild-eyed liberals at The Economist apparently have figured out that the sky is blue:

D.B. Echo, Another Monkey

So, here’s the thing. The debate we had about the stimulus probably should have been a lot like the book Mr [Mike] Grabell has written: a detailed investigation of what does and doesn’t work in stimulus spending and whether the government really can jump-start a promising industry through investments, tax breaks and industrial policy. But that wasn’t the debate we had. Instead we had a debate about the very concept of whether the government ought to spend money counter-cyclically during a recession in order to keep the economy from collapsing, or whether it should tighten its belt along with consumers and businesses in order to generate confidence in the financial markets and allow markets to clear. We had a debate about whether governments should respond to recessions with deficit spending or austerity.

That was the debate we had. And what’s interesting about this particular moment is that while Mr Grabell is writing about what did and didn’t work in the stimulus, and Mr Obama is staying away from the topic for political reasons, out there on the barricades what’s happening is that the entire argument that governments should engage in austerity appears to be collapsing.

How about that.

There are times when austerity absolutely is the correct approach. This is absolutely not one of them. But our “leaders” continue to insist that the sky is pink with purple polka-dots.

*Quote and link from Digby.