Thank you Sir May I have Another?

Oh, the economic hardships of giving up those charitable deductions!

White House minions Ken Baer and David Plouffe tried the hard sell on a few liberal and progressive bloggers in a teleconference on Monday Night according to Susie Madrak at C&L. Yes, it was yet another access blogger telethon where the White House tries to sell  the progressive blogs with all the readership on the way to “Tote dat barge! Lift dat bale!”  for the reelection effort and this stinker of a White House Budget.  After all, the Republican we have in the White House now will be marginally less evil than the Republican we could get in the White House then if every one doesn’t just bend over and ask for more.

Although the minions said the budget asked for “shared sacrifice’, Plouffe had a difficult time coming up with concrete examples on how the very rich in the country would be doing their share of the sacrificing.  The only examples they could provide were less deductions for mortgages and no deductions for charitable giving.   I’m sure all the folks relying on charitable giving aren’t thinking the sacrifice part of the deal goes to their rich donors.  Do they really think honest liberals will agree with this let alone try to sell it to others?

A conference call with Congressional Budget Office spokesman Ken Baer and White House adviser David Plouffe tonight was probably aimed at growing indignation in the blogosphere over the proposed Obama budget, which features your proverbial draconian cuts to just about every social program — except Social Security and Medicare.

It’s good that the administration is engaging in these calls because we get to hear more details about their budget instead of the usual MSM drone, but I’m not sure that bloggers are happy with the overall conversation since once we got into the details of arguing different cuts, it looked as though we were buying into the White House frame that the cuts were urgently needed in the first place, and many of us don’t believe that’s true.

The audio of the call is in our media player–above. What do you think?

Baer’s opening remarks focused on “shared sacrifice.”

My question: “When you’re talking about shared sacrifice, clearly, the working and middle class is getting a disproportionate slam everywhere they turn with this budget, and you’re talking about a few, what sound like token items to the rest of us out here, and I wonder how you rationalize that during this severe economic recession.”

Baer said people got that impression from the stories that were released early, without looking at the big-budget picture. (Click here.)

David Dayen at FDL was also on the call.  His post draws similar conclusions. There’s an insane explanation of why the White House version of draconian cuts is better because of  the timing of undesirable cuts.  It seems straight out of newspeak world.  It appears that the White House is still very confused about basic economics and multipliers.  They appear to believe that March is an unsafe time for cuts but by October, recessionary budget cuts will be hunky dory.

Didn’t the mess they made of the first opportunity to get a stimulus right teach them anything? Do they really think they can finesse every economic variable to acquiesce to a hope and dream speech at a particular point in time?  After all, they’ve done such a bang up job with the labor market already that we still have record rates of long term unemployed and full on market exits.  How do you get a president re-elected when the lowest unrealistic unemployment rate you can offer up is around 7.5%?  Even the Gipper was getting  nervous about a re-election attempt with rates that high.  Reagan’s administration switched to massive recapitalization of the military ala Keynesian stimulus to buy a re-election boost.

WTF do these people think we’re smoking over here in our pajama wearing hippy dreamland? The only thing I can figure is that this delay buys enough time to get through an election cycle so that the first wave hits but not the tsunami of recessionary anti-stimulus as the impact multiplies through out the economy.  This way, Obamas gets to still happy talk  some of the people all of the time about how things are getting better without looking like a complete liar.  He also fights off conservative angst about deficit improvement before the next recession takes hold and makes everything much, much worse.

My question was this: Where does the Administration think demand will come from to reverse a three-year demand shortfall if you cut budgets in the immediate term at a time when 14 million people are unemployed, if state budgets show the same contraction, if trade remains in imbalance and if corporations are sitting on $2 trillion in cash? In other words, do you think economy can generate its own demand right now? I added this for Plouffe to give it a political angle: The budget predicts 8.2% unemployment at the end of 2012. No President has ever run for re-election with unemployment over 7.8% since 1948. Do you think it’s worth cutting budgets over the next two years and reducing aggregate demand at a time when 14 million Americans are unemployed, if the political benefit appears to be facing re-election with the highest unemployment in recorded history?

So here was the answer. Plouffe said that the employment estimates, they hope are conservative. (Actually, one criticism of the budget I heard yesterday was that the projections were pretty aggressive and above what CBO projects for the next few years.) He said that there is a lot of positive trajectory in terms of job growth, though not nearly enough, he stressed. He said that the President has said repeatedly that we cannot jeopardize the recovery with the budget, and that it does not have negative effects on the economy in terms of hiring and growth.

I don’t know how he can say that. Simple math indicates that taking $90 billion out of the economy, which this does in the first fiscal year starting in October, would have negative effects. The positive trajectory on job growth, reflected by two consecutive months of reductions in the topline unemployment rate by 0.4%, have not carried with it actual hiring growth, and could be attributed to noise in the data and rejiggering of population statistics. So when you’re talking about actual job growth, not many economists see it yet. And sucking money out of the economy when states are contracting and businesses aren’t spending will necessarily reduce that hiring.

This is when Ken Baer stepped in. And his answer was baffling. He said that the President’s budget covered Fiscal Year 2012, which was “a bit away,” and that the budget was constructed so that the cuts wouldn’t go into effect until a little later. Republican cuts from the current budget year will start March 5 if they get their way, and there’s a risk there.

I haven’t seen a complete list of invitees, but my guess is that there wasn’t an economist among them.  Yup, it’s a tough life when you join the league of uncommon bloggers.

20 Comments on “Thank you Sir May I have Another?”

  1. janicen says:

    …coming up with concrete examples on how the very rich in the country would be doing their share of the sacrificing. The only examples they could provide were less deductions for mortgages and no deductions for charitable giving.

    This almost made me laugh out loud. Are we expected to believe that the “very rich” actually have mortgages? I’m thinking most of them pay cash for their houses.

    Doing away with deductions for charitable contributions isn’t going to hurt the wealthy nearly as much as it is going to hurt the charities.

    • dakinikat says:

      my very rich sister has two houses that are both twice the size of mine. One’s on the puget sound and the other one’s in Seattle. Both are paid for. I’m the one that needs the mortgage deduction.

      • janicen says:

        Wow, she is rich. I used to live in Seattle and housing, especially on the Sound or in the city is quite pricey. Good for her!

  2. bostonboomer says:

    David Dayen has another post today saying that Social Security cuts are probably still on the table.

    • dakinikat says:

      you know, if they’re really sincere about the federal deficit, congress should give up all their benefits and salaries and pensions and health care and just work for the patriotic orgasms

    • dakinikat says:

      More shiny, happy Republicans smoking fundie religious joints:

      In yet another example, the Frederick County, Maryland, Board of County Commissioners voted to end the county’s contribution to its Head Start program, cutting overall funding for the program by more than 50 percent. Two of the Republican officials justified their decision to cut Head Start — which provides early childhood education to the children of low-income parents — by saying that women should really be married and home with their kids, thus rendering the program unnecessary:

      Let’s just go ahead and sterilize all the seed corn while we’re at it too!!! That way we can have forced pregnancies and starving people with children they can’t feed! What a friggin future!!!!

      • paper doll says:

        Let’s just go ahead and sterilize all the seed corn while we’re at it too!!! That way we can have forced pregnancies and starving people with children they can’t feed…..

        Now you’d getting the picture!
        ( I wish I was kidding )

      • bostonboomer says:

        Women should be home with their kids? They forced single mothers to get jobs in return for welfare that ends after two years. Now they are supposed to stay home with their kids? And live on what?

        Anyway Head Start isn’t just for children of working mothers. The ignorance callousness of these people is beyond belief.

      • paper doll says:

        Now they are supposed to stay home with their kids? And live on what?

        bb, you forgot the part where they should married! lol! So maybe the Commissioner’s plan includes e.Harmoney funding?

      • Fannie says:

        Definitely a culture of retardation.

      • Minkoff Minx says:

        women should really be married and home with their kids, thus rendering the program unnecessary

        Oh geez, I see so many politician quotes that sound like they are The Onion sound bytes.

    • madamab says:

      I agree – of course SS cuts are on the table.

      The kabuki goes like this:

      Obama: I believe in strengthening Social Security. Really, really I do!

      Republicans: We want to cut everything! Everything! Let’s dismantle Social Security entirely. Let them eat cat food! We hate old people. And sick people! We hate everyone! Booga booga!

      Obama: Well, I DO want to be bi-partisan. So, let’s cut just a little bit. Okay, a lot. But let’s PRETEND we’re cutting a little bit so the “professional left” will continue to kiss my butt.

      Republicans: Yay! Rich people rule!

      Obama: Yeah, they do!

  3. paper doll says:

    As long as the progressive bloggers and the like tote this guy’s poisoned water…why shouldn’t the WH pitch the insanity ?

    In that phone call, a WH determined to slash social programs and endlessly bail out the wealth isn’t the crazy one…it’s those progressive bloggers doing its dirty work, over and over …the very people who use to ask “what’s wrong with Kansas…why do people vote against themselves??” When it was a matter of people voting right wing, the bloggers could see the question. But they need to look in the mirror and ask themselves that one. I’m real tired seeing the left be Obama’s S/M john and beg for beatings

  4. Fannie says:

    I live in California, and for years the unemployment rate averaged around 7%, until 2009, when it it 12.1%. The only county that has a 7% unemployment rate is the richest county in the state, Marin County.

    The bottom has dropped out in the County I live in, and nobody is stooping to help us.