An act of Economic Sabotage

Posted: November 20, 2010 | Author: | Filed under: The Bonus Class, The Great Recession, The Media SUCKS, U.S. Economy, Voter Ignorance | Tags: | 14 Comments

Over at The Washington Monthly, there’s a new hypothesis in town. Steven Benen thinks the Republican Party is working hard to ensure that joblessness remains high and that the economy doesn’t recover.  It is because this would be their certain path back to power.    Evidently there are other liberal/progressive columnists that are floating around the hypothesis so I think it’s worth examining and discussing.

Is there a Republican plot to tank the economy or are they just stuck in VooDoo economics fantasy land?  Is this possibly a new meme for Democratic partisans that’s come from some Journolist replacement?

Benen points first to several other sources, so let’s begin there.  Stan Collender writes at a blog called capital gains and games. Collender mention the idea was while writing on the seemingly endless attacks on the Federal Reserve by the GOP.  The GOP is notoriously filled with gold bugs and with folks that scream communism at any thing they think looks like big government overreach. (Say, fluoridating the water or giving children polio shots, or initiating an income tax to pay for war.) They go through cycles of screaming about the Fed ever so often.  However, this set of attacks is gaining some footing with the populace for some reason.  This is a quote from something Collender wrote last August.

It’s not at all clear, however, whether Bernanke realizes that the same political pressure that has brought fiscal policy to a standstill in Washington is very likely to be applied to the Fed if it decides to move forward. With Republican policymakers seeing economic hardship as the path to election glory this November, there is every reason to expect that the GOP will be equally as opposed to any actions taken by the Federal Reserve that would make the economy better, and that Republicans will openly and virulently criticize the Fed for even thinking about it. The criticism is likely to come both before any action is taken to try to stop it from happening and afterwards to make the Fed think twice about doing more.

Matt Yglesias echoed a similar sentiment which is where Benen comes up with the hypothesis.  They appear to have a mutual admiration society.  He says that every one knows that the path to re-election for President Obama is improvement on the economic front.  Mitch McConnell has made it very clear his goal is to see that Obama is a one term president. Therefore, is it possible that the Republicans are prepared to sabotage anything that improves the economy that might improve Obama’s chance at re-election?

Which is just to say that specifically the White House needs to be prepared not just for rough political tactics from the opposition (what else is new?) but for a true worst case scenario of deliberate economic sabotage.

The next cite is from Paul Krugman who echos a similar theme in his op-ed ‘The Axis of Depression’ in last week’s NYT.

What do the government of China, the government of Germany and the Republican Party have in common? They’re all trying to bully the Federal Reserve into calling off its efforts to create jobs.

Indeed, we’re seeing all kinds of weird things coming from Republicans these days including that infamous WSJ letter where they all are in a panic about inflation.  This teeth-gnashing occurs despite that October’s core consumer price index rose by a meager .6% .  That is the lowest it has risen since records have been taken;  starting in 1957.  Then, we have that ridiculous little cartoon that ramps up the same kind of fallacy-based nonsense with those two cute little bears using some strange form of English.   In all my years of teaching economics, I have never seen so much misinformation get spread around by so many.  We’ve got plenty of data now that completely debunks the anti-Keynsians, the Austrians, and the Reagan worshipers.  The facts recruited infamous supply sider Bruce Bartlett to the truth. What more proof do they need?

So, what is Benen implying, no make that stating?  He’s saying that the data, the proof, and the fact that people are suffering from joblessness has nothing to do with the agenda here.  The agenda is that the folks that want to deregulate us into Somalia status simply want to regain their power.

One of the interesting things Benen does is actually give some thought to  the idea that the Republicans are just misguided ideologues.  He gives the thought a test drive by looking at a column by Jon Chait in the TNR called “It’s Not a Lie if You Believe It” that ascribes less motive and more ignorance.  Benen dismisses it.

That seems largely fair. Under this line of thought, Republicans have simply lied to themselves, convincing one another that worthwhile ideas should be rejected because they’re not actually worthwhile anymore.

But Jon’s benefit-of-the-doubt approach would be more persuasive if (a) the same Republicans weren’t rejecting ideas they used to support; and (b) GOP leaders weren’t boasting publicly about prioritizing Obama’s destruction above all else, including the health of the country.

Indeed, we can even go a little further with this and note that apparent sabotage isn’t limited to economic policy. Why would Republican senators, without reason or explanation, oppose a nuclear arms treaty that advances U.S. national security interests? When the treaty enjoys support from the GOP elder statesmen and the Pentagon, and is only opposed by Iran, North Korea, and Senate Republicans, it leads to questions about the party’s intentions that give one pause.

So, that seems a little paranoid.  It also  seems like there would be some conversations some place outside of left blogosphere that would shun a group of office holders that show such naked hatred of their own country and the people they represent; even if the naked hatred extends mostly to those that don’t vote for them.  Benen says that the that assumes a vigilant press.  I think we can all agree these days that what we do not have is a vigilant and intellectually vigorous set of journalists.

Historically, lawmakers from both parties have resisted any kind of temptations along these lines for one simple reason: they didn’t think they’d get away with it. If members of Congress set out to undermine the strength of the country, deliberately, just to weaken an elected president, they risked a brutal backlash — the media would excoriate them, and the punishment from voters would be severe.

But I get the sense Republicans no longer have any such fears. The media tends to avoid holding congressional parties accountable, and voters aren’t really paying attention anyway. The Boehner/McConnell GOP appears willing to gamble: if they can hold the country back, voters will just blame the president in the end. And that’s quite possibly a safe assumption.

If that’s the case, though, then it’s time for a very public, albeit uncomfortable, conversation. If a major, powerful political party is making a conscious decision about sabotage, the political world should probably take the time to consider whether this is acceptable, whether it meets the bare minimum standards for patriotism, and whether it’s a healthy development in our system of government.

This gets me to another interesting thing that popped up in my mail this week.  It’s an announcement for one of those debate topics that you get if you’re a subscriber to The Economist. The motion this week is “This house believes that America’s political system is broken.” Right now, 76% of the folks voting agree with the motion. Interestingly enough, Matthew Yglesias is the one defending it.

So,  I’m not willing to draw any conclusion at this point, but I am willing to entertain the idea that the Republicans are willing to sabotage the President no matter what he chooses to do.  I am not willing to see it as a take down of the nation’s first ‘black president’.  I am willing to see it as a continuation of the job they wished they’d done on Bill Clinton. The hate all ‘liberals’. Plus, Republicans have felt entitled to power for as long as I can remember.  I do know–from experience–that they will do and say anything to get their agenda through.  Does this now include leaving incredibly large numbers of their own citizens suffering in poverty and without a job to do so?

My guess is that any means justifies any ends if you think some universal power broker is on your side.   Just read about the C Street group if you think that’s an outrageous hypothesis.  Then, tell me what you think.

What Devil Did Obama Make a Deal With?

Posted: November 15, 2010 | Author: | Filed under: Black Agenda Report, just because, Team Obama, The Bonus Class | Tags: , , , , , , | 67 Comments

Barack Obama speaking at 2007 fundraiser in New York

As Dakinikat pointed out in her latest post, Paul Krugman used his column today to describe (and bemoan) Barack Obama’s negotiating style and his apparent lack of ideology. Krugman argues that the problem we face now (emphasis added) is:

…the contrast between the administration’s current whipped-dog demeanor and Mr. Obama’s soaring rhetoric as a candidate. How did we get from “We are the ones we’ve been waiting for” to here?

But the bitter irony goes deeper than that: the main reason Mr. Obama finds himself in this situation is that two years ago he was not, in fact, prepared to deal with the world as he was going to find it. And it seems as if he still isn’t.

In retrospect, the roots of current Democratic despond go all the way back to the way Mr. Obama ran for president. Again and again, he defined America’s problem as one of process, not substance — we were in trouble not because we had been governed by people with the wrong ideas, but because partisan divisions and politics as usual had prevented men and women of good will from coming together to solve our problems. And he promised to transcend those partisan divisions….the real question was whether Mr. Obama could change his tune when he ran into the partisan firestorm everyone who remembered the 1990s knew was coming. He could do uplift — but could he fight?

So far the answer has been no.

Although Krugman has come a long way from the days when he defended Obama’s health care “reform” bill, he is still clinging to the notion that Obama is a well-meaning, although hopelessly weak and gullible liberal. But what if Obama never intended to keep his campaign promises? What if he always planned to help cover up the Bush administration’s crimes and continue their wars?

In a recent post, I linked to this article at Common Dreams: Obama Was Used, And Is Now Used Up, by Robert Freeman. Freeman writes:

Barack Obama was used. Of course, he knew he was being used when he made the deal. But what he didn’t know was how quickly he would be used up. Now he has to face two years of humiliation knowing that he betrayed the people and the country he claimed to champion – and knowing that everyone else knows it as well – but also knowing that he’s gotten what’s coming to him.

Obama made a deal to get the job in the first place. The deal was that he would carry on with Bush’s bailout of the banks, with Bush’s two wars, with Bush’s suppression of civil liberties, that he wouldn’t prosecute or even investigate any of the enormous fraud that had brought down the country, or the lies that had railroaded it into war.

I haven’t been able to learn very much about Freeman. According to the description on one of his earlier Common Dreams pieces,

he teaches history and economics at Los Altos High School in Los Altos, CA. He is the founder of One Dollar For Life, a national non-profit that helps American students build schools in the developing world through contributions of one dollar.

He has been contributing to Common Dreams since at least 2004. Freeman doesn’t say with whom Obama supposedly made a deal, or why that entity would want the U.S. to continue the Bush administration’s policies. For all I know, Freeman could be just talking through his hat when he makes this unsourced claim; but isn’t it something many of us have wondered about for the past several years? I know I have.

Still, Why would Obama do that? Why would he campaign on high-minded generalities, leading gullible “progressives” and even well-meaning liberals to believe he would transform Washington DC and reverse Bush policies like torture, indefinite detention, and concentration of power in the executive branch?

Why did the financial community back him so strongly? Wasn’t it most likely their desire to get their hands on the Social Security trust fund? Perhaps they made a deal with Obama to engineer an assault on Social Security, Medicare, and other social programs, but would the financial community also demand that Obama continue the Bush policies of torture, detention, and endless war?

Now let’s look at the latest article by Bruce Dixon at The Black Agenda Report: Barack Obama, Social Security and the Final Irrelevance of the Black Misleadership Class. Dixon also claims that Obama’s betrayal of all that is liberal was foreordained because of a deal to make him President.

The masters of corporate media proclaim that their raid on social security, is a done deal. “Entitlements,” their code word for Medicare, Medicaid and Social Security, will be cut in the lame duck session of Congress, with Democratic president Barack Obama taking the lead. Though the outlines of this raid have been clear for months, what passes for black America’s political leadership class have been silent. As far as we know, they have not been ordered to shut up. They have silenced themselves, in abject deference to the corporate black Democrat in the White House.

It took a Republican Richard Nixon to open relations with China in the seventies. It took Democrat Bill Clinton to impose draconian cuts in welfare and end college courses for prisoners in the nineties. And today, only a black Democratic president can sufficiently disarm Democrats, only a black Democrat can demobilize the black polity completely enough for the raid on “entitlements” to be successful.

Dixon then points out a fact that many white “progressives” are missing:

Many among the current Congressional Black Caucus are utterly unprepared to stand against the corporate onslaught to gut social security because it is backed by the same forces who have made their political careers possible, and spearheaded by a black Democrat in the White House. The NAACP and similar advocacy organizations too have neutered themselves with a generation of corporate financing and the “reward” of regular meetings with White House officials

Some “progressives” are discussing as possibilities for a primary challenger to Obama in 2012 or, alternatively, a third party challenger. Both of these efforts will fail, because any challenger to Obama will not win the black vote. Dixon implies that Obama’s “deal with the devil” was a sellout to corporate interests.

Inflicting a fatal wound on social security has been the aim of America’s business class for generations. It is a project upon which some of them have spent billions. Thanks to our lack of a functioning black press, or electronic media that address black audiences, most African Americans don’t know who billionaire Pete Peterson is.

Peterson is a billionaire who announced his intention almost 20 years ago to spend every last dime of his net worth to kill social security…. [Peterson has] push[…] the fraudulent notion that social security is “a Ponzi scheme,” unsustainable, a drain on the nation’s finances, and won’t be there when people currently in their thirties and forties get old anyhow. A decades-long campaign of fear, uncertainty and doubt has been waged against the American people to prepare for the final undoing of the New Deal and Great Society programs of social security, Medicaid and Medicare. But it’s a campaign most of us are barely aware of.

Is Dixon right? Did Obama sell out in order to destroy social security? Then who demanded that Obama continue all of the Bush policies and block any close examination of Bush administration crimes?

I’m not suggesting any vast, all-encompassing conspiracy–clearly Obama’s corporate and political backers had differing goals in mind when they gave him their money. They probably didn’t all gather in a large room and deliberately plan to make Obama President. Some, like Teddy Kennedy, probably believed that Obama would really follow in JFK’s footsteps, inspiring a new generation to enter politics and change the system in radical ways. Read the rest of this entry »

Survival of the Richest

Posted: November 11, 2010 | Author: | Filed under: Bailout Blues, Global Financial Crisis, Human Rights, Surreality, The Bonus Class, The Great Recession | Tags: | 41 Comments

In the natural world, the weakest generally don’t survive unless they are part of a highly evolved species.  The lessons of basic evolution are fairly simple, you either develop something that gives you a competitive advantage over those who wish to make a meal of you, or you and your offspring have a very brief and brutal existence.

Humankind evolved into something beyond a herd animal by developing tools and social contracts. Through trade, language, and invention, our evolutionary history has shown that competitive advantage does not have to involve size, brute force, speed, or trickery like camouflage.   Dogs evolved into a smart and numerous population by being genetically flexible.  Indeed, the more advanced beings tend towards flexibility and social interaction.  Nurturing, passing on survival skills, specializing, and adapting are all important survival skills for more highly evolved beings.  Many natural scientists now study the importance of how these species treat their youngest and the oldest, since the young are portents of the future and the elderly are the libraries of past knowledge and skills. Specialization allows creatures other than those with superior brute force to be contributors.  We wouldn’t have The David or knowledge of Gravitational Singularity if we evolved on pure brute force.  Evolutionary Biology learns a lot about a species by the way it treats its weakest, its young, and its elderly.

What amazes me most about the Cat Food Commission report is that it is so Republican that you wonder if anyone Democratic had anything to do with its inception or results. But of course, it was chartered by a Democratic President and co-chaired by a Democratic man.  For a group of Darwin denying theists,  Republicans believe and adhere to survival of the fittest in the most strict terms and this report wreaks of that view.  The winners of the moment get all the spoils, even if this is a short-sighted and factually-challenged view of reality.  Their ‘masters of the universe’ comic book world is everything that nature does not reward in the extreme long run.  It is inflexible and relies on brute force.  Their reality gives a species a very short and brutal life in the scheme of things and assigns the animal the limited roles of predator and prey. To the Cat Food Commission, the  majority of us are mere prey.

The draft from that dreadful commission came out yesterday and you can read the entire thing here at the NYT.  We knew from the moment the Simpson theatrics began that nothing good was going to come out of this effort.  Simpson put Social Security on the agenda immediately which was completely outside a deficit commission’s sphere.  President Obama did nothing to reel them back.  Simpson only got more theatrical and ill-mannered.  The commission itself could only get worse.

The draft–which is all they can achieve at the moment–suggests upending the social and political contracts made between the US government and the people in ways that I would never have thought possible.  It’s as if every third rail of politics is put to a match.  It was announced as a draft with these big bold red letters that say Do Not Cite as if there’s any hope left that we’ll join the rest of the developed and industrialized nations in realizing that we can choose our priorities differently.  It is an announcement to the rest of the world that we, the American Empire, choose to be so exceptional that we’ll do so to our extinction.  The rest of you just go ahead and cooperate and share, while we ensure the survival of the few over the existence of the many.   No one makes Spock’s choice.  We all go down with the ship and  an Ayn Rand third finger salute.

I read this draft and realize how co-opted we are by conservative ideology just as we are co-opted by religion over reason.  This is a nation that would rather believe than realize. The thing reads like a Republican manifesto.  It contains spending cuts in nearly everything imaginable while still making that fairy tale suggestion that if we overhaul the tax system and lower marginal tax cuts, the wealth will just trickle on down.

One of the major suggestions is to revisit the huge tax break given to mortgage holders on their first and second homes.   While it is worthwhile to review the usefulness of this deduction as blank check, the commission questions its entire existence.  I’ve always wondered what the deal is with giving tax breaks for a second home or a boat.  I’ve also wondered why we should give a huge tax break to people living in McMansions.  However, for ordinary people, this deduction leads to wealth building and security.  Perhaps rather than tearing down the entire thing, they should’ve given some consideration to making it something akin to local homestead exemptions?  But, this would be too compassionate and probably too collectivist for our masters of the universe.  Why can’t they just allow destructibility up to say, the average national price of a home? No, no, because their views of the world say that only corporations get get deductions.  People have to make do with making do. Masters of the Universe don’t have to compete because they are special.  Special treatment for them is something other than a handout or a hand up.

It seems like the commission set out to make radical suggestions.  Maybe it’s to make some of the worst portions of it more palatable if they can’t get the entire thing pushed on to some willing Congressional sponsors?   Part of the problem we have now in our struggling economy is those balanced budget amendments passed by states allowing them to spend crazily when tax revenues are coming in–when government spending should be restrained–while telling states to adopt austere budgets when their economies need a government spending boost.  What’s with these inflexible spending quotas rather than adopting rules that reflect the state of the economy?

You can see some of this worst of this obsession with strict guidelines by reading some analysis by Ezra Klein at WAPO.  I can’t imagine how they’re going to deal with caps like this if we do have a serious national threat like an invading army at our borders. Right now, we’re spending way too much money drone bombing Bedouins in caves. Talk about your spending priorities.

The co-chairs freeze 2012’s discretionary spending at 2010’s levels — and then start cutting it back further. By 2015, they project discretionary spending will be more than $200 billion less than the president’s budget currently envisions. They raise taxes, but rather unexpectedly, cap the revenues the tax system can generate at 21 percent of GDP. They also offer a number of options for tax reform, including one that eliminates all tax expenditures (including the mortgage-interest deduction, the exclusion for employer-based health care, and more) and brings the top rate down to 26 percent. Social Security comes in for both benefit cuts and tax increases — though there are substantially more of the former than the latter. There are a number of Medicare reforms. The co-chairs project that the deficit will fall to 1.6 percent of GDP by 2020 if the recommendations are implemented. The vast majority of those savings come from cuts in spending. Tax increases are a relatively minor contributor.

The commission definitely overstepped its charter in many ways.  The biggest overstep was to make suggestions on Social Security, which technically isn’t part of the general budget and is funded and governed off-budget and supposedly away from political hacks.  The recommendations for Social Security are shocking.  Again, I have to say that Social Security is not an entitlement.  It is a benefit program that we pay for through working.  To see it perpetually treated as some kind of social welfare scheme appalls me.

Here are a few blurbs from Fox News on the proposals dealing with Social Security.  They seem most interested in it because they support tearing the program to shreds.  It’s demise has been the holy grail of the right wing of Republican Party since its inception during the New Deal.  For some reason, you can buy old age benefits from a insurance brokering shitmonger and it’s just all in a day’s work.  If you let the government offer a lower cost alternative,  it’s communism in our midst.

The co-chairmen of the panel appointed by President Obama to cut the U.S. deficit recommend raising the retirement age to 68. It is currently 67 years for retirees to receive full benefits. The panel leaders also propose reducing the annual cost-of-living increases in Social Security.

The increase to age 68 would be implemented by 2050 and then would increase again to 69 by 2075. A “hardship exception” would be provided for certain occupations where older retirement would be unrealistic.

This “hardship exception” is a divide and conquer strategy if I’ve ever seen one.  It pits those of us that rely on social security for retirement against each other.  I see nothing but a series of political fights erupting over this if any one dares bring it to the legislative floor.  It is telling the dogs to fight for the scraps on the floor rather than going for the banquet on their master’s table.

There are a few other things in that are within the scope of the commission’s charter.  Some of them seem tucked in there as an after thought rather than central to a serious discussion on what should be funded and what should be defunded.

According to a source who spoke to Fox News, the 18-member panel led by former Wyoming Republican Sen. Alan Simpson and former Clinton Chief of Staff Erskine Bowles, also may propose reducing the base rate on corporate taxes, phasing in spending cuts over time, reducing foreign aid by $4.6 billion, freezing federal salaries for three years and banning congressional earmarks. It is unclear how the commissioners would define a congressional earmark.

The proposal would also set a tough target for curbing the growth of Medicare. And it recommends looking at eliminating popular tax breaks, such as mortgage interest deduction. The plan also calls for cuts in farm subsidies and the Pentagon’s budget.

Let me just say this, foreign aid is less than 1 percent of our total budget outlay. It’s a pittance.  These kinds of things can only be seen in conservative dog whistle terms.  It makes me wonder exactly how far these folks are asking congress to go to appease Republicans because this can only be described as a plan tailor made for Republican talking points.

Again, I worry that something wasn’t done to narrow the scope of this motley crew way before this report came due.  It says something about the man in charge.  I’ll leave it to you to decide exactly what because my plan at this moment is to go further into the details and ferret out what remains of our country’s future.

And, just where are the Democratic politicians?  If you want some suggestions on this, just go read Black Agenda Report. Editor Bruce Dixon has his own theory.

The masters of corporate media proclaim that their raid on social security, is a done deal. “Entitlements,” their code word for Medicare, Medicaid and Social Security, will be cut in the lame duck session of Congress, with Democratic president Barack Obama taking the lead. Though the outlines of this raid have been clear for months, what passes for black America’s political leadership class have been silent. As far as we know, they have not been ordered to shut up. They have silenced themselves, in abject deference to the corporate black Democrat in the White House.

It took a Republican Richard Nixon to open relations with China in the seventies. It took Democrat Bill Clinton to impose draconian cuts in welfare and end college courses for prisoners in the nineties. And today, only a black Democratic president can sufficiently disarm Democrats, only a black Democrat can demobilize the black polity completely enough for the raid on “entitlements” to be successful.

Elitism or Elite? Quelle Difference!

Posted: October 31, 2010 | Author: | Filed under: The Bonus Class, Voter Ignorance | 81 Comments

As a kid, I aspired to part of some group labelled elite.  Part of that is because you really do–at some point–want to sit at the kewl kids lunch table.  The other is because when you hear things like “elite team” of marines or “elite” group of astronauts, you think wow, to be THAT outstanding must be something!  I’ve always aspired to achieve.  That type of elite should not be spit out of one’s mouth like we’re talking about the Bourbon aristocracy in revolutionary France.

Elitism, however, is a different critter.  That implies that just because you think you’re good at something or you manage to wind up at the kewl kid’s table, every one else is obviously inferior. You get your ‘Mean Girls’ act on.  That’s the true dirty word and it popped up again as a headline today at the NYT from Peter Baker.  That would be ‘ Elitism: The Charge That Obama Can’t Shake’.  Time and again we do hear reports that POTUS may be thinking us little folks just don’t get him and if he just articulates that POTUS knows best, we will  suddenly throng to the polls on Tuesday and pull the Democratic Lever.

In the Boston-area home of a wealthy hospital executive one Saturday evening this month, President Obama departed from his usual campaign stump speech and offered an explanation as to why Democrats were seemingly doing so poorly this election season. Voters, he said, just aren’t thinking straight.

“Part of the reason that our politics seems so tough right now, and facts and science and argument does not seem to be winning the day all the time, is because we’re hard-wired not to always think clearly when we’re scared,” he told a roomful of doctors who chipped in at least $15,200 each to Democratic coffers. “And the country is scared, and they have good reason to be.”

The notion that voters would reject Democrats only because they don’t understand the facts prompted a round of recriminations — “Obama the snob,” read the headline on a Washington Post column by Michael Gerson, the former speechwriter for President George W. Bush — and fueled the underlying argument of the campaign that ends Tuesday. For all the discussion of health care and spending and jobs, at the core of the nation’s debate this fall has been the battle of elitism.

Well, I would expect that charge to come from a Dubya speech writer.  Afterall, the Republicans have made a national sport of making fun of ‘cultural’ elites, ‘hollywood’ elites, and ‘ivory tower’ elites.  Hey, what happened to aspiring to being more than you can be?  Let’s not confuse the talented  and bright in our society with the folks that peer down their noses and go ‘tut, tut’.  They’re two distinct groups.

We need more innovators and elites to move the country forward.  We do no need lectures from effete snobs, however.  How can we tell the difference before they land in office and better yet, how do we get every one to make a distinction between out right snobbery and the pursuit of a higher state of existence?  How can we stop every one from hijacking lexicon?

That being said, Obama does not project any kind of empathy along the lines of  “I feel your pain” or speaking out to even a “silent majority”.  Evidently, even Democratic strategists are discussing the tin ear issue.  But c’mon, how touchy feeling does Mitch McConnell strike you?  Would you want to share a lunch table with that guy?

“The elitism argument is kind of a false one because the president talks about people’s economic interests and middle-class families,” said Anita Dunn, a Democratic strategist who advises Mr. Obama. “And those who are supporting Republican candidates right now — because they think they’ll look out for their interests — are going to be very surprised when they find out what the corporate sponsorship of that party is buying.”

But Ron Bonjean, a Republican strategist, said Mr. Obama had not connected with popular discontent. “A lot of people have never been to Washington or New York, and they feel people there are so out of touch,” he said. “When you’re unemployed and you’re sitting in your living room and you hear the president say, ‘You don’t understand what the problems really are — you’re just scared,’ that makes people really, really angry.”

For a party of bankers, the Republicans sure have the ability to boil the words down to a populist message these days.   The Democrats are the ones  that come off as supremely out of touch.   I still remember the old George Bush looking flummoxed by the grocery store experience.  How silver spoon Dubya turned into a comic book rancher is still a mystery to me.  But, this new breed of Democratic progressives have lost the common touch, the common message, and the search for the common good.  No doubt about it.  Obama is symptomatic of that.  Funny how they all think it’s just the inability to market themselves in the most resonant way rather than looking at the sincerity of their messages.  It’s difficult to fake sincerity.  People with common sense can smell it a mile away.

And, I think at the heart of it all is that most of the people in the beltway right now have no idea what it means to be middle class these days.  It’s like American is searching for ‘Mr. Smith Goes to Washington’ and political consultants are still watching ‘Wag the Dog’.  Why can’t we get some combination of common sense Harry Truman and definitely elite FDR who truly set forward an agenda to expand the American Dream to every one?

What is wrong with our political process that it seems to create the very thing we love to hate?  Does reaching the membership in a society of elites automatically lead one to be an elitist?  If so, that doesn’t say much for the character-building nature of striving to reach the top of one’s field of endeavor; whatever it may be.

The Fleecing of America

Posted: August 1, 2010 | Author: | Filed under: Economic Develpment, The Bonus Class, The Great Recession | Comments Off on The Fleecing of America

It’s hard to find the silver lining behind the American Economy any more for ordinary Americans. There is a platinum one, however, for the ultrarich. The difference in socioeconomic status and buying power have become so pronounced recently that it’s difficult to think about this as the same country that was once called the “land of opportunity”. There are several profound articles up today that point to the extreme differences in growing up in America now compared to growing up in America about 30 years ago. It’s so bad, that the FT’s article that I’m going to point you to says that you have a better chance of being upwardly mobile just about any where in Europe these days than in the United States. The excellent coverage of the developing nature of our corporate serf status here is covered by Edward Luce in “The Crisis of middle-class America”. While it profiles the struggles of two U.S. families, the statistics behind the stories tell us that their stories are not just anecdotal, they are today’s every family. There’s no hand-up these days. That is unless you are a Wall Street Executive, an American Politician, or some CEO or lawyer that gain from the every day plight of others, then the government stands ready to bail you out, go further into debt for you, and give you tax breaks that no one else enjoys.

The slow economic strangulation of the Freemans and millions of other middle-class Americans started long before the Great Recession, which merely exacerbated the “personal recession” that ordinary Americans had been suffering for years. Dubbed “median wage stagnation” by economists, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973 – having risen by only 10 per cent in real terms over the past 37 years. That means most Americans have been treading water for more than a generation. Over the same period the incomes of the top 1 per cent have tripled. In 1973, chief executives were on average paid 26 times the median income. Now the ­multiple is above 300.

The trend has only been getting stronger. Most economists see the Great Stagnation as a structural problem – meaning it is immune to the business cycle. In the last expansion, which started in January 2002 and ended in December 2007, the median US household income dropped by $2,000 – the first ever instance where most Americans were worse off at the end of a cycle than at the start. Worse is that the long era of stagnating incomes has been accompanied by something profoundly un-American: declining income mobility.

Alexis de Tocqueville, the great French chronicler of early America, was once misquoted as having said: “America is the best country in the world to be poor.” That is no longer the case. Nowadays in America, you have a smaller chance of swapping your lower income bracket for a higher one than in almost any other developed economy – even Britain on some measures. To invert the classic Horatio Alger stories, in today’s America if you are born in rags, you are likelier to stay in rags than in almost any corner of old Europe.

We are becoming a deeply socioeconomically unequal country. You’ll read that many of these folks struggle because of medical insurance costs as well as stagnant earnings. No comfort knowing that what the Obama administration is calling success in its plan to reform health care turns more people over to be fleeced by these third party payers who look more to their bottom lines than their customers. The fleecing continues to appease the already rich.

In a similar vein, I was struck by Susie Madrak’s latest at C&L: “Retirement” You must be Kidding?” as she outlines how many workers are emptying out their personal retirement plans just to ‘stay afloat’. Staying afloat is the primary middle class activity these days. Every time a bubble bursts from the latest Wall Street fiasco, I joke to my students that I’ll die at the podium. Now, I don’t even know about that given the number of teachers and others in usually safe jobs out on the street these days. It could be the ice floes for me and many others if the cat food commission gets its way.

In the midst of all this bad economic news for the middle class, the political class is debating the extension of the Bush Tax Cuts for the bonus class. I consider this piece of legislation to be the hallmark of the New American Order. If you haven’t checked out WaPo and William G. Gale’s Five Myths about the Bush Tax Cuts, you should. It talks about some of the things we’ve talked about here. First is the idea that you’re going to stimulate the economy by giving people money that really don’t spend it. It will just get trapped in somebody’s balance sheet to use to arbitrage their way to paper profits. It won’t create jobs, customers for businesses, or physical capital that this country so desperately needs like better roads, airports, and infrastructure. It won’t help small businesses or lead to high growth. It will just continue the wealth transfer from the majority of people and the public good to the richest of the rich. Which leads me to the screeds that you will hear from the right wing and from those Dinocrats that now seem to make up the majority of our decision makers.

As Sen. Orrin Hatch (R-Utah) recently put it, allowing the cuts to lapse would amount to “a job-killing tax hike on small business during tough economic times.”

This claim is misleading. If, as proposed, the Bush tax cuts are allowed to expire for the highest earners, the vast majority of small businesses will be unaffected. Less than 2 percent of tax returns reporting small-business income are filed by taxpayers in the top two income brackets — individuals earning more than about $170,000 a year and families earning more than about $210,000 a year.

Even budget guru David Stockman of the Reagan travesty op-ed’ed this morning for the NYT with this comment.

IF there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt — if honestly reckoned to include municipal bonds and the $7 trillion of new deficits baked into the cake through 2015 — will soon reach $18 trillion. That’s a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.

But all this even means nothing if you got a group of very confused an selfish people making the decisions. House Minority Leader John Boehner (R-OH) thinks he doesn’t need no stinkin’ economists or data to help him make decisions. I guess the voices in his head tell him what’s good for the rest of us. Good thing he was on Fox New Sunday where he’s joined by others who have their own and don’t care if others don’t. It’s not their concern after all. We don’t have jobs because we’re lazy not because they’ve all gone abroad or they’ve gone off to the black market where employers can hire undocumenteds and treat them like slaves.(One of the big things I’ve noticed down here since Katrina is the number of solid middle class jobs that were in the public sector that have now been farmed out to private companies. Part of their plan is to kill SEIU. A lot of they jobs they cover are now farmed out to private companies who are using undocumenteds. Here in New Orleans, we’ve lost the black middle classed and gained a Hispanic underclass.) So now there’s the memes that lazy Americans need entitlements and handouts, not the social insurance benefits for which we paid. Actually, Chris Wallace did bring up the incredible costs of extending the Bush tax cuts but only because fiscal conservatism is in vogue since the Democrats have both houses and the white house. Not like he cares or anything.

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If any one of them would listen, there are a number of economists with good suggestions on how to turn this situation around. Unfortunately, the offices of decision makers are filled with industry insiders and lobbyists in training. In fact, public service these days is just a way to get your ticket punched to the big bucks. It seems almost none of them is immune. However, like all Ponzi schemes, something happens, and it collapses.

Back to the FT article for this one.

Statistics only capture one slice of the problem. But it is the renowned Harvard economist, Larry Katz, who offers the most compelling analogy. “Think of the American economy as a large apartment block,” says the softly spoken professor. “A century ago – even 30 years ago – it was the object of envy. But in the last generation its character has changed. The penthouses at the top keep getting larger and larger. The apartments in the middle are feeling more and more squeezed and the basement has flooded. To round it off, the elevator is no longer working. That broken elevator is what gets people down the most.”

Unsurprisingly, a growing majority of Americans have been telling pollsters that they expect their children to be worse off than they are.

May wisdom beings bless the family that that stays afloat. The bonus class doesn’t need it for the government showers blessings on them

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