Obama’s “Jobs Plan” Endangers Social Security and Medicare

Posted: September 9, 2011 | Author: | Filed under: U.S. Economy, U.S. Politics, We are so F'd | Tags: , , , , , | 17 Comments

Via Naked Capitalism, The Real News Network interviewed an actual economist, Robert Pollen of the University of Massachusetts at Amherst, about Obama’s “Jobs Plan” as describe in last night’s speech. It’s well worth a listen.

According to Zach Carter at HuffPo, next week Obama plans to propose a deficit reduction package that will include increasing the eligibility age of both Social Security and Medicare.

Jon Walker at FDL also has a couple of posts about the Villagers’ plans for Medicare:

Political Forces Lining up to Raise Medicare Retirement Age

The threat to Medicare is very real and pressing. Over the past several months more and more political forces in Washington have being slowly lining up behind a campaign to raise the Medicare eligibility age. This most recent effort really got started when Sen. Joe Lieberman (I-CT) and Tom Coburn (R-OK) put forward a bill to raise the Medicare retirement age in late May.

It got a major push in July when Obama privately offered it up as part of a “grand bargain” on the debt ceiling with Speaker John Boehner. It probably got another push in Obama’s jobs speech last night when the president suggested he still wants to change Medicare in a way “some in his party” won’t like.

The campaign also got a behind-the-scenes boost this week. First, the Democratic members of the House Ways and Means committee included raising the Medicare retirement age in a memo to the Super Committee outlining possible deficit reduction options. But more importantly, the powerful Obama is coming to cut Medicare Walker points out the part of Obama’s speech in which he suggested that Democrats are rigid and unreasonable in opposing changes to Medicare. Walker counters:

Progressives support ways to reduce Medicare spending by methods such as allowing Medicare to directly negotiate for drug prices. Progressives just do not support shifting costs onto old people. Obama saying he supports Medicare changes “some in his party” won’t like is code for saying he will support cutting benefits.

Most of the jobs parts of the speech are unlikely to pass, so on the policy front they won’t really matter much. On the other hand, there is a Super Committee currently empowered to make large deficit reductions, so this part of the speech about cutting Medicare benefits could be the only policy from the speech that is enacted.

I fear all that may result from this speech is that Obama gets a campaign message about how the Republicans don’t care about jobs, and Obama helps the Super Committee raise the Medicare retirement age.

Obama Must Go!!

The Devil in the Job Act Details

Posted: September 9, 2011 | Author: | Filed under: U.S. Economy, unemployment | Tags: , | 22 Comments

There’s a few more details–and as you know the devil is always in those–coming out about the president’s proposed American Jobs Act.  The first hurdle will be the Republican Congress who will most likely rip out anything that hasn’t got anything to do with subsidizing rich people and corporations through worthless tax cuts. But, there are some other issues likely to come up also.  I’ve found a few to share.  Bear with me, this is long and wonkish in places.

This first one deals with one part of the Act that may not exactly deal with jobs but could help people stay in their homes and stabilize the housing industry. The President inkled it in one line.  The President’s original plan–called HARP–has not really lived up to its promise of large scale help for struggling home owners. Many of the folks that may have qualified for the program have not been able to get help and those upside down on mortgages have had real issues. This ProPublica article explains why this program failed and the new program–if passed– may have it’s own issues.  One of the biggest problems is coming and will come from the Federal Home Financing Authority (FHFA), the regulator and conservator of Fannie and Freddie.

Some of the reasons the old program has fallen short are complicated and aren’t likely to be easily fixed. Loans with mortgage insurance, for instance, are often denied because the insurer must agree to transfer the policy to the new loan. Loans with a second mortgage present their own difficulties.

But there have also been two key players who are obstacles to the program’s success — the banks and, perhaps surprisingly, the federal regulator overseeing Fannie Mae and Freddie Mac. Both seem likely to continue their skeptical stance, because both view helping underwater homeowners as risky.

The banks have been widely reported to be wary of offering new mortgages to borrowers who owe more on their house than its worth. Although the loans are backed by Fannie or Freddie, the bank could still be on the hook if the homeowner defaults and Fannie or Freddie finds that the bank didn’t properly underwrite the new loan. The bank could be forced to buy the loan back. Because underwater homeowners are seen as being at a greater risk of defaulting, they’ve been wary of taking those on. (You might have noticed that since the housing bubble burst, banks have become much more cautious.)

Fannie and Freddie’s federal regulator, the Federal Housing Finance Agency (FHFA), could choose to remove that risk for banks. Doing so, however, would shift that risk from the banks to Fannie and Freddie, and that’s something FHFA hasn’t been eager to do. As a former White House aide put it to The Wall Street Journal, FHFA head Edward DeMarco’s “first instinct is to say no.”

FHFA is an independent federal agency, so even though taxpayers have kept the two companies afloat, they are not under the administration’s direct control.

FHFA’s independence has lately been a big obstacle for the White House. We reported in December of last year on FHFA’s opposition to cutting mortgages for underwater homeowners facing foreclosure. Reducing the principal amount would make homeowners much less likely to re-default, but would lead to short-term losses for Fannie and Freddie. A public White House push on the idea has so far gotten nowhere.

Any more fixes to the old program or additions to the new program will need FHFA approval and that seems in doubt.  If you’re interested in this detail, go read the article.

Okay, let’s look at the major problem.  That’s getting the plan past the likes of Eric Cantor who looked positively sullen while taking notes at the   presidential speech last night.  Actually, he had a rather strange bespeckled pallor in his face and put me in mind of Uriah Heep or the onset of melanoma.

“This is my objection to the message that was delivered tonight,” House Majority Leader Eric Cantor (R-Va.) told reporters in the Capitol after the speech. “The message was: either accept my package as it is, or I will take it to the American people. I would say that that’s the wrong approach. What we’re here to do is try to transcend differences, not let them get in the way in the areas we can make progress on.”

Cantor added that “as majority leader, I certainly would like to see us be able to peel off some of these ideas, put them on the floor, vote them across the floor and get the senate to join with us so we can actually get something to the president and make some progress as quickly as possible.”

The quick reaction from a top congressional Republican suggests the GOP is not outright dismissing all of Obama’s ideas, but certainly is not going to pass the entire $450 billion package in one fell swoop.

Cantor has already pooh poohed the idea of an infrastructure bank which is actually one of the more meaningful aspects of the proposed act.

“I’m wary of the suggestion of an infrastructure bank,” House Majority Leader Eric Cantor (R-VA) told reporters at a roundtable lunch hosted by the Christian Science Monitor. “I am one who agrees with the notion that an infrastructure bank is almost like creating a Fanny and Freddie for roads and bridges.”

That’s President Obama’s favored infrastructure spending idea — to loan both private and public dollars to states and municipalities to speed up new and existing building projects, and to lure private investment with the promise of returns from tolls and other fees. Cantor’s counter offer is to nix the requirement that states “set aside 10 percent of federal surface transportation funds for transportation museums, education, and preservation would allow states to devote these monies to high-priority infrastructure projects, without adding to the deficit.”

These are pretty different ideas, though they could meet similar ends in some circumstances. The infrastructure bank wouldn’t require canceling some projects (mainly for bikers and pedestrians) to fund different ones, and would fund projects that meet high bang-for-the-buck, and environmental standards.

Jared Bernstein — an economist at the Center on Budget and Policy Priorities and Vice President Joe Biden’s former top economic adviser — told TPM, “the [infrastructure] bank has real advantages in terms of rigorous cost benefit analysis in choosing projects that this idea doesn’t sound like it would…. but 10 percent isn’t a lot and this kind of flexibility can be a useful thing I would just want to know what kind of criteria the project choice involves. Because the last thing we want to do is waste these scarce resources.”

Additionally, I firmly believe that Republican Governors are committed to killing Teacher’s Unions and don’t seriously want any incentives to keep teachers on the payroll.  Here’s a good example of how much they hate these organizations from NJ Fat Cat Governor Chris Christie.  Teacher’s Unions are seriously important to local Democratic Candidates.  They work and they donate funds.  You can see their importance in the Wisconsin Cheddar Revolution.  Restructuring the New Orleans school District down here to accommodate charter schools has really only been successful at one thing:  replacing teacher contracts negotiated by unions with non union lower paying, less job security contracts.  I’m sure the Republicans won’t want any money funneled to states aimed at keeping union worker’s in place.

“There’s nobody in this room who runs a successful business who says, tells an employee after three years and a day — I’m sure this doesn’t happen at Koch Industries — where they call ‘em in after three years and a day and say, ‘Hey, you have been great for three years and a day, and guess what? You have a job here at Koch Industries for the rest of your life. Congratulations!’ Christie said.

“But this is the way we’re running our schools. We need to get rid of tenure… It’s just not right. And so we need to do these things and that’s where we head next. We’ve taken care of the first two big of the big things, at least for the moment, and now the third big thing is we need to take on the teachers’ union once and for all and we need to decide, who is determining our children’s future? Who is running this place? Them or us? I say it’s us, and we’ve got to go fight to do it now.”

Here’s Paul Krugman explaining a portion of the President’s Plan. He has one similar question that I voiced most of yesterday.  The original stimulus didn’t really stimulate as much as it stopped the freefall of the economy.  That’s an okay thing, but as you can see, it really has left the plan open to a lot of criticism because it didn’t really go far enough.  This plan has the same issue.  If many measures currently in place are allowed to expire, things will get worse.  However, stopping things from getting worse still doesn’t move things forward.

O.K., about the Obama plan: It calls for about $200 billion in new spending — much of it on things we need in any case, like school repair, transportation networks, and avoiding teacher layoffs — and $240 billion in tax cuts. That may sound like a lot, but it actually isn’t. The lingering effects of the housing bust and the overhang of household debt from the bubble years are creating a roughly $1 trillion per year hole in the U.S. economy, and this plan — which wouldn’t deliver all its benefits in the first year — would fill only part of that hole. And it’s unclear, in particular, how effective the tax cuts would be at boosting spending.

The other thing that I really still don’t understand–accept in pure political terms–is the fascination with decreasing spending to balance the budget while making the budget deficit worse by providing less productive tax cuts.  It is still your basic Voodoo Economics.  Yes, tax cuts can do some things, but the multipliers on tax cuts pale in comparison to direct government spending.  I’ve mentioned this before, but putting money back to consumers and businesses via tax cuts means that a portion of that drains to unproductive things. That’s okay policy for a small recession, but it’s not good for what’s happened to us since 2007. Redirecting money from good spending to iffy tax cuts doesn’t make a lot of sense to me.

Moody’s must have a much more powerful computer program than I have intuition and understanding of macroeconomic theory.  Direct government spending on infrastructure goes out full force and then starts multiplying by going additional rounds to businesses and consumers.  The first dose is full force and the draining doesn’t occur until the second round.  I really don’t think the lawyers in the White House get the idea of economic multipliers at all, but then, maybe it is just because of the politics.  Republicans could care less about the health of the general economy and working population as long as they retain power, feed their ideological base, and prop up corporations.  I wouldn’t put numbers out at all–like Moody’s–until I see the recessionary impact of the offsets.

So, here’s Ezra Klein–Baghdad Bob of the DC villagers–with a good laundry list of details.  See which ones you think the Republicans will pick off.  I’m more interested in that last statement because, again, you can’t really judge how much it can’t do without looking at the offsets.  It could wind up a wash or worse.

– It cuts the payroll tax for workers in half, which amounts to a $175 billion tax break, and cuts it in half for businesses until they reach the $5 million mark on their payrolls, at a cost of $65 billion. The idea there is to target the tax cut to struggling small businesses, rather than the cash-rich large businesses. It also extends the credit allowing businesses to expense 100 percent of their investments through 2012, which the White House predicts will cost $5 billion.

– It offers $35 billion in aid to states and cities to prevent teacher layoffs, and earmarks $25 billion for investments in school infrastructure.

– It sets aside $50 billion for investments in transportation infrastructure, $15 billion for investments in vacant or foreclosed properties, and $10 billion for an infrastructure bank. It also makes mention of a program to “deploy high-speed wireless services to at least 98 percent of Americans,” but it doesn’t offer many details on that program.

– It provides $49 billion to extend expanded unemployment insurance benefits. $8 billion for a new tax credit to encourage businesses to hire the long-term unemployed, and $5 billion for a new program aimed at supporting part-time and summer jobs for youth and job training for the unemployed.

– It also encourages the Federal Housing Finance Authority to make it easier for underwater homeowners to refinance their mortgages.

If all of that could be spent out in 2012 — a big if, but given the reliance on tax cuts and state and local aid, much of it could certainly hit before the year’s end — it would be bigger, in annual terms, than the Recovery Act. The White House also promises the entire proposal will be paid for, and the specific offsets will be released next week.

My other concern comes at the end of this analysis by Macroadvisers.  It looks good if it goes as proposed by the President and if there were no offsets but the entire thing is quite temporary.  All of these are HUGE ifs.  The analysis is sound under the ifs, however.

Because these initiatives are planned to expire by the end of 2012 — except for the infrastructure spending, which has a longer tail — the GDP and employment effects are expected to be temporary.
  • That is, these proposals will pull forward increases in GDP and employment, not permanently raise their level.
  • Nevertheless, there may be good reasons to want to implement such programs today, if the government can follow through on the commitment to trim deficits later:
    • There remains considerable slack in the economy and nearly all forecasts anticipate only a gradual decline in the unemployment rate over the next couple of years.
    • Given the elevated risk of recession the U.S. faces today, additional near-term stimulus reduces that risk.
    • Given the deleterious effects of long-term unemployment on an individual’s skills and long-term employment prospects, speeding a return to employment is both individually and socially beneficial.
    • With monetary policy’s limited room to lower rates and stimulate demand, there is a role for counter-cyclical fiscal policy.

I’ve got one nifty graph on the job gap. The gap is basically a measurement of what jobs have gone missing because of the great recession. I’ll send you t0 another shorty, wonky link.  It’s here at The Economic Policy Blog where it’s argued that the plan--again with all the IFs in tact–makes a step towards closing the gap.  However, the gap is 11 million jobs.  This is what needs to be created to get the economy back to Full Employment.  The propsed plan adds around 4 million jobs.  In simple math, it’s not even half way there which suggests another half ass plan which will be dialed down even further in the sausage making phase.

So, I’ve gone on quite a bit and all of this is quite wonky in places.  It’s way longer than I usually make my posts but I thought that you should get a chance to see as much as possible.  The bottom line for me is that I’m not going to get tingly legs until I see the offsets that will be produced on Monday and until I get an idea of what the Republicans will go for.  It’s not giving an rehearsed speech that’s important, it’s getting the right things into law that matters.

The “Jobs” Speech: Aftermath

Posted: September 8, 2011 | Author: | Filed under: Barack Obama, U.S. Economy, U.S. Politics, unemployment, voodoo economics, We are so F'd | Tags: , | 14 Comments

Desperation Time

Reuters has a summary of the “key elements” of President Obama’s speech. Mainly he proposed a payroll tax holiday for employees and employers.

EMPLOYEE PAYROLL TAX HOLIDAY

Obama is proposing a $175 billion one-year extension and expansion of the employee payroll tax holiday that would halve the tax rate to 3.1 percent in 2012.

EMPLOYER PAYROLL TAX HOLIDAY

Obama is seeking $65 billion to encourage small businesses to hire more workers. This includes halving employer payroll taxes to 3.1 percent for the first $5 million of a company’s wage bill in 2012, which the administration says will reach 98 percent of small businesses. He also wants a complete payroll tax holiday for increasing the size of the payroll by up to $50 million above the prior year, either by hiring new workers or raising the salaries of the existing labor force.

That would help the people who still have jobs, I guess, but it hasn’t done much to create new jobs so far.

In addition to that:

He proposes to help homeowners, and says he’ll have a plan in the next couple of weeks–no specifics.

$5 billion to provide 100% tax deductions for businesses that spend money on new plants and equipment. Of course, as Dakinikat has repeatedly told us, that won’t create jobs as long as consumers can’t spend.

$85 billion for state and local governments, which would be good if the Republicans would allow it through. This would include money for improving schools, helping keep teachers and other public employees in their jobs, improving already foreclosed homes, and money for young people.

$50 billion for transportation infrastructure. Hasn’t this one been around for awhile? I don’t think the Republicans will go along.

A one-year extension of unemployment benefits and tax credits for the long-term unemployed.

So what do you think? What are you hearing in the media?

Personally, I think it’s time for Obama to give a speech like this one.

Thursday Reads: The GOP Debate, Obama’s Narcissism, and Generations

Posted: September 8, 2011 | Author: | Filed under: Baby Boomers, Barack Obama, jobs, morning reads, psychology, Republican presidential politics, the villagers, U.S. Economy, U.S. Military, U.S. Politics, unemployment, WE TOLD THEM SO | Tags: , , , , , , , , , , , | 41 Comments

Good Morning!! Last night we live-blogged the Republican debate, and it was borrrrrinnngggg! The less said about that debate last night the better. I can’t begin to pick the best or worst of that bunch. They were all horrible. For the media the big story in the debate was the conflict between Rick Perry and Mitt Romney. From CBS News:

The sparks flew early at Wednesday night’s Republican presidential debate, with onetime frontrunner Mitt Romney and the man who has overtaken him in the polls, Texas governor Rick Perry, trading barbs over their respective records on job creation.

Romney was asked about the fact that Massachusetts was ranked 47th in job creation during his time in office. After making the case that he had improved a bad situation, Romney took a subtle shot at Perry, who has been in politics since 1984, saying, “Look, if I had spent my whole life in government, I wouldn’t be running for president right now. My experience, having started enterprises, having helped other enterprises grow and thrive, is what gives me the experience to put together a plan to help restructure the basis of America’s economic foundation so we can create jobs again, good jobs, and compete with anyone in the world.”

Pressed on his reference to spending a “whole life in government,” Romney, who touts his experience in the private sector, added: “It’s a fine profession, and if someone were looking to say how can we restructure government, and which agency should report to which other agency, well, maybe that’s the best background. If you’re thinking about what it takes to reshape and update America’s economy, and to allow us to compete with China and other nations around the world, understanding how the economy works fundamentally is a credential I think is critical.”

Perry countered by saying that while Romney had a good record creating jobs “all around the world” in the private sector, “when he moved that experience to government, he had one of the lowest job creation rates in the country.”

“So the fact is, while he had a good private sector record, his public sector record did not match that,” the Texas governor continued. “As a matter of fact, we created more jobs in the last three months in Texas than he created in four years in Massachusetts.”

Whatever.

I don’t expect the President’s jobs speech tonight to be much more interesting, but we will be live-blogging it anyway. I do expect that after the Obama has nothing new to offer in his speech tonight that he will have “crossed the Rubicon,” so to speak. He will have passed the point of no return. He’ll be done, finished, caput. I’ll say again what I’ve been saying for awhile now: this president needs to follow in the footsteps of that  other failed president, Lyndon B. Johnson. Realize it’s all over and withdraw from the race so someone else can try to beat whichever nutjob the Republicans nominate.

If Obama refuses to withdraw, I think the media should hold debates where the President debates candidate Obama from 2008. They could play clips of his campaign promises and then ask him to explain why he adopted the Bush policies instead. Now that might be an entertaining debate.

For a long time now, we’ve been seeing former Obot bloggers expressing their disappointment in the man they forced down America’s throat. Lately the disappointment and even disgust has been coming from more mainstream sources. It’s quite amazing really. Yesterday Richard Cohen, the aging WaPo columnist told the Villagers that Obama has lost the Hamptons.

Over the Labor Day weekend, I went to a number of events in the Hamptons. At all of them, Obama was discussed. At none of them — that’s none — was he defended. That was remarkable. After all, sitting around various lunch and dinner tables were mostly Democrats. Not only that, some of them had been vociferous Obama supporters, giving time and money to his election effort. They were all disillusioned.

Let me call the roll. I am talking about are writers and editors, lawyers and shrinks, Wall Street tycoons and freelance photographers, hedge funders and academics, run-of-the-mill Democrats and Democratic activists. They were all politically sophisticated, and just a year ago some of them were still vociferous Obama supporters. No more.

Frankly, I was surprised. The Hamptons are a redoubt of New York liberalism. It is to campaign money what the Outer Banks are to fishermen. I expected more than a few people to defend the president. No one did. Everyone — and I do mean everyone — expressed disappointment in him as a leader. In that area, they thought he was a bust. Some articulated detailed critiques — the nature of his stimulus program, for instance. They argued that more money should have gone into long-term infrastructure programs. Most, though, skipped the details and just registered dismay: Where had their “change” agent gone?

Today, Al Gore attacked Obama as anti-science and anti-environment.

Instead of relying on science, President Obama appears to have bowed to pressure from polluters who did not want to bear the cost of implementing new restrictions on their harmful pollution—even though economists have shown that the US economy would benefit from the job creating investments associated with implementing the new technology. The result of the White House’s action will be increased medical bills for seniors with lung disease, more children developing asthma, and the continued degradation of our air quality.

BTW, why hasn’t Gore been protesting outside the White House? Why hasn’t he been arrested? Wouldn’t that have a powerful effect? But I digress.

I want to highlight another elite critique–although this critic apparently saw through Obama early on. Yesterday, HuffPo published an outstanding post by Professor of International Affairs Michael Brenner, from the University of Pittsburgh: The Great Betrayal.

Barack Obama’s betrayal will resonate in history long after he has become just another name on the over-priced celebrity speaker circuit. It is a betrayal of far more than the youthful idealists and loyal progressives who put him in the White House. Obama has unmoored the Democratic Party from its foundations — philosophical and electoral. No longer is it an expression of the persons, programs and ideas that crystallized with the New Deal and which dominated the country’s politics for sixty years. Its future is that of ad hoc assemblage of hustlers and special interests whose sole claim to govern will be that it is not the amalgamated Tea/Republican Party. Obama, by this Oedipus-like act of patricide, has also betrayed the country that voted for an enlightened leader with a social conscience — a country in desperate need of the opposite to the fate he has laid on us.

Brenner argues that Obama’s extreme narcissism reflects our contemporary culture and that we’ll see more like him in the future {shudder}.

A narcissist has no convictions other than a total dedication to his own gratification. That gives him the freedom to maneuver without inhibition or conscience with the revered self as the only reference point. All expressions of ideals, of opinions, of intentions are implicitly so qualified. A complementary narcissistic trait is an ease with blurring the line between virtual reality and actual reality. Narcissists believe everything they say — at the moment they say it. Their declarations are sterile acts that have no pride of parentage nor can they expect honor from offspring. Witness Obama’s momentarily rousing support of a labor movement that he has scorned for thirty months. This is the same President who has launched an all-out campaign against public school teachers whose unions serve as the whipping-boy for all that ails American education. Narcissists take as given that they never dissemble or lie — because to do so is to acknowledge that reality has an intolerably constraining claim on them.

Of course, this last is a feature of contemporary American political culture in general. Facts are taken to be infinitely malleable, the very notion of truth is denied, speaking honestly is viewed as a lifestyle choice, and communication is more a matter of self affirmation than an attempt to convey knowledge, emotion or intention to somebody else. We have externalized navel gazing to a remarkable degree. One consequence is that public discourse is not anchored by common standards of honesty. It is a maelstrom of opinion, emotive outbursts, mythology and primal screams. Accountability, therefore, ceases to exist. There is accountability only where there are benchmarks of veracity, a reasonably rigorous monitoring of what is said and done, and a dedication on the part of some at least to ensuring that these requirements for a viable democracy are met. The abject failure of the media to perform these functions to any reasonable degree is a hallmark of our times. The think tank and academic worlds are little better.

This amorphous environment is narcissist friendly terrain. It is permissive of twists and turns, leaves no record of what was done yesterday or the day before — much less a year ago, and focuses only on the evanescent existential moment. Case in point is the remarkably uncritical coverage that Obama has received from the supposedly responsible media — especially those who claim to be upholders of the ideas and policies and interests that he has betrayed.

Wow! Can that guy ever write! As I said Brenner apparently saw Obama pretty clearly from the beginning. Here is an excerpt from a paper he wrote in October, 2008 Who is Barack Obama? In this piece, Brenner comments on Obama’s strange disdain for the political and cultural movements of the 1960s and 1970s.

Obama is not a philosophical progressive or a populist. Little if anything in the roiled public life of America seems to anger him or even irk him. At a time of multiple crises – constitutional, economic, and in the nation’s foreign dealings – he keeps his emotional distance. It is hard to imagine him getting worked up about any of the developments in American society or attacks on the body politic that so deeply dismay many others

In all respects, Obama is very much a man of his times. Weak or absent convictions, dispassion even about grievous wrongs, incapacity for moral outrage, quiet acceptance of the precept to put self first – if not quite the measure of all things, a natural egoism – all the hallmarks of contemporary American society. A man who amasses $10 million at a relatively young age after a late start and married to a woman with no inherited wealth whatsoever is a man who looks after himself. He has none of the idealism that exemplified his mother’s life, and for which she paid a steep price in comfort and security. Obama’s disparagement of the 1960s social movements that shaped his mother is revealing. It confirms the absence of serious interest in his own lineage. It hints at an introspection, such as it is, that has the instrumental needs of the present as its magnetic pole. It exemplifies a strongly ahistorical approach to the current world he occupies. Obama’s public remarks that the whole 1960s experience was a ‘psycho-drama’ is astonishing. He is what he is, where he is, as a direct result of the 1960s. The same holds for his wife and children. Indeed, he simply would not be were it not for the ideals and attitudes that became full-blown in the 1960s.

Perhaps at the root of Obama’s narcissism there is a sense of disgust about where he came from and who is is? Or maybe he disdains the movements of the ’60s and ’70s–the Civil Rights movement, the Women’s movement, the anti-war movement, the gay rights movement–because he has no convictions of his own and can’t understand why anyone would have convictions worth fighting for? I don’t know. I admit I simply do not understand the man. I just know he’s toxic for America and he was toxic for the Democratic Party, which, thanks to him, is now truly dead.

Interestingly, I came across another post at HuffPo today that address the issue of generational conflict: Generation X Simply Doesn’t Get it, by Joshua Grant. The post seems to have been written in reaction to the August unemployment numbers. Joshua longs for the days when America really was a great country that everyone could be proud of. His generation, Gen Y, has never experienced it, he says.

We, Generation Y, are a people who have lived through the need for “ADHD medicines,” “anti-depressants,” dysfunctional and broken families, a dot-com bust, financial collapse, failed government institutions, world hunger, terrorism, and international conflicts. Simply put, there has been little to celebrate in life since we’ve been around.

Some people think we are self-absorbed, concerned only with our interest, but can you blame us? The only glimmers of hope have been what personal achievements we have accomplished, of which we hang onto to for dear life. After all, in a country that is supposed to be so “great,” something doesn’t add up, and we want to know why? It’s not that we are conceited or don’t want to be a part of something better, but why get in the middle of a national mess that looks like a downward spiral?

Joshua is so young that lacks any historical perspective. He blames the problems he sees on Generation X. Poor Gen X! They grew up under Reagan and never experienced an America that produced prosperity for anyone but the rich. I’m not sure Joshua even knows about difficult passages that members of other still living generations experienced–like the Great Depression, World War II, Vietnam, racial discrimination and segregation. He wants to know why things are so terrible in this country right now. And if Gen X-ers aren’t going to do anything about it, he wants them to get out of the way so his generation can. To his parents’ generation, he writes:

Let me thank you on behalf of my generation, Y, for all that you have done, and now I ask that you step aside, open your books, and let us, with all the right questions, begin to solve the problems you can’t seem to figure out. It all starts with Why/Y.

If you won’t ask, we will.

I don’t want to be too hard on Joshua, because he’s obviously very young. But what on earth is his generation waiting for? Why aren’t they in the streets protesting already? Why aren’t they out there demanding jobs and a guarantee they’ll get social security in their old age instead of complaining about being stripped of hope? Why aren’t they protesting the wars, torture, and domestic spying? Why are they waiting around for someone else to do it?

In the comments on Joshua’s article, everyone hammers the baby boomers and says it’s all our fault. At least we tried to fight the powers that be. Our generation didn’t sit around waiting for our parents to change things. We fought for change and we had a powerful effect on the culture even though we couldn’t stop the growing corruption and corporatization of the government. What are these kids waiting for? I admit I just don’t get it.

Well, this post has turned into a bit of a rant, so I guess I’ll wrap it up. What are you reading and blogging about today?

Real Job Creation Policy vs. Bizarro World

Posted: September 7, 2011 | Author: | Filed under: 2012 presidential campaign, Surreality, Team Obama, U.S. Economy | Tags: , , | 15 Comments

I just can’t step back from the crap being pushed by politicians as “jobs” policy these days.   I can’t believe any one is actually falling for the line that basic corporate welfare programs and subsidies are actually going to create jobs because there’s never been any evidence of that being correlated in the past and there is certainly no evidence of that happening today.  Lest we forget, we have about 11 years of experience with corporate tax largess, deregulation of financial markets, and low taxes on capital gains. Yet this century has seen nothing but miserable job creation.  We’ve got nothing to show for it but the biggest recession since the Great Depression.

Here’s Robert Reich calling Romney’s job creation approach “bizarre”.  However, it doesn’t really sound any different from that offered up by any of the other candidates either and that includes the President.  This bothers me to no end and hence, I keep blogging on about it.

“Mitt Romney kind of has the odd idea, and it is a bizarre idea, that at a time when corporations are scoring record profits. At a time when you’ve got them sitting on $2 trillion of cash they don’t even know what to do with, that somehow if you give them more tax cuts and deregulate so you reduce their costs even further, they will then create jobs.

“They don’t create jobs now, he assumes, because their costs are too high or they’re not making enough money. Well, the reality of course is just the opposite,” former Secretary of Labor Robert Reich said on MSNBC’s “The Last Word.”

“They don’t need more money, companies are doing very well,” Reich said later on in the segment.

Corporations are flush with cash at the moment.  They just aren’t doing anything with it because they won’t expand unless there’s demand for their products and services.  As I demonstrated yesterday, the bottom has fallen out of consumer demand and that’s stymied economic expansion.  We do not need to appease some imaginary confidence fairy.  Businesses need paying customers. One of the primary drivers of economic activity in this country since World War 2 has been construction.  The housing market is still in big trouble and we have excess supply of both commercial and consumer real estate.  What business person is going to hire more people and produce stuff that no one buys?

We’re going to be live blogging both the Republican debate tonight as well as the President’s job speech.  Neither promise anything more than distinctly unproven economic policy.  Even the President is thought to not believe what he’s going to be saying if you believe this. What kind of leader pushes policy he knows to be wrong?

The centerpiece of the job creation package that President Obama plans to announce on Thursday — payroll tax relief for workers and perhaps their employers — is neither his first policy choice nor that of many economists. But it is the one that they figure has the best chance of getting Republicans’ support.

Mr. Obama has signaled that he will propose to extend for another year a reduction of two percentage points in the 6.2 percent Social Security payroll tax that employees pay, which means about $1,000 more for the average household. And he is considering a proposal to expand the tax relief to employers’ share.

In his prime-time address to a joint session of Congress, Mr. Obama is expected to call for a package totaling several hundred billion dollars that would also extend other business tax cuts, put federal dollars into building and repairing roads, rails, airports, schools and other infrastructure projects, and provide aid to states to avert more layoffs of teachers.

But the single biggest stimulus measure he will propose is likely to be temporary payroll tax relief. If the current tax cut, due to expire at the end of the year, is expanded next year to employers as well as employees, it would pump roughly $200 billion into the economy, with the aim of stimulating much-needed demand for goods and services from consumers and businesses and, additionally, of giving companies an incentive to hire.

For the White House, its appeal is that it may be the only large stimulus measure that can pass Congress this year given Republicans’ preference for tax cuts.

And if Republicans oppose him, the White House figures Mr. Obama has the better of the political argument because he will be trying to block a tax increase that otherwise would apply to virtually all households on Jan. 1.

Republican leaders have said they might support the payroll tax cut’s extension if its cost is offset by equal spending cuts, a condition they did not apply for extending the Bush-era tax cuts on high incomes. Mr. Obama has said he will propose long-term deficit savings to offset the short-term costs of his stimulus proposals, though that is not likely to satisfy Republicans.

Look, what in his 2 1/2 years in office should leave him with the impression that he’s going to get anything past the Republicans in Congress?  Half of them are indicating they probably won’t show up for the speech.  Ever since the man’s taken office he’s offered one Republican plan after another.  I still can’t believe after years of fighting Dolecare in the 1990s, the Democrats were forced to pass that stupid thing and it now wears the Obamacare label.  What kind of leader pushes policy that his own party fought for decades?

I have no idea what trade agreements or patent reform or reducing regulations have to do with job creation either.  None of that has ever been shown through research to be germane.  But again,  all you have to do is look at the amount of cheap money and the excess cash sitting on corporate balance sheets right now to know that businesses don’t need any more incentives to do something they aren’t doing any way.

The other thing that is most confusing is that the President’s plan will rob Peter to pay Paul because he’s going to make this ‘revenue neutral’ to appease Republicans.  Again, with this appeasing pipsqueak Cantor and the rest of the whackos in the Republican caucus.  Supposedly, some direct infrastructure spending and some direct aid to states to keep teachers in place is going to some how magically turn around a 9.1% unemployment rate.  I don’t see how that’s going to do anything on the level that he’s talking about –$300 billion–is a token amount of money in a $15 trillion economy and the offsets will likely take away jobs from wherever they’re pulled. The other simply confusing proposal has to do with tax breaks for equipment which is really strange given that it’s likely to increase current worker productivity making hiring additional workers questionable.

In his speech on Thursday night to a joint session of Congress, Obama will also consider a tax benefit to those businesses that hire the unemployed, with a price tag of around $30 billion. Public works projects will be included, but the AP reports that this will be less than $50 billion of the package.

The president also will continue for one year a tax break for business that allows them to deduct the full value of equipment.

The local aid that Obama intends to propose it aimed at preventing teacher layoffs, officials said.

The New York Times said the cost of the package would be “several hundred billion,” while the Washington Post estimated it to be “at least $200 billion.”

This is clearly a set of tax giveaways that the government can’t afford that won’t achieve much of anything other than further the Republican agenda of starving the beast.  What on earth does this president have in his head?  I can’t figure out any logical, reasonable strategy for doing these things.  Every time he furthers the Republican agenda it basically makes things worse for his reelection outlook.  His actions are completely unpopular when measured by polls. He’s numbers are approaching those of Bush by basically repeating the Bush-Cheney policy on steroids.  Unless he’s trying to become the President of the Chamber of Commerce, I’m not seeing any strategy here.  It’s like he so desires bi-partisan approval that he’s willing to throw anything up against the wall to see what possibly sticks.  Meanwhile, the Republicans are getting Republican policy without even putting any skin in the game. I just don’t get it.

Anyway, Minx and BB have promised to watch and liveblog the Republican debates tonight.  I don’t think I can do that because it will just be a contest to see who can be the meanest in a contest to beat up modernity, science, and people that aren’t rich.  I frankly see no purpose in continually watching people talk about issues that the civil war settled. I will watch the President’s speech because at this point, I’m looking for any sign of lucid economics and a strategy that doesn’t just infer faulty marketing.  Who knows, maybe the sky will open up, a choir of celestial beings will start singing, ray of sunshine will start streaming out of gold-rimmed clouds, and all my questions will be answered.  OR NOT.

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