Tuesday Reads: Daniel Inouye, Richard Engel, and Fiscal Slope Trial Balloons and Lead Balloons

Posted: December 18, 2012 | Author: | Filed under: Barack Obama, Fiscal Cliff, Medicaid, Medicare, morning reads, Social Security, U.S. Economy, U.S. Politics, unemployment | Tags: , , , , , , , , , , , , , , | 57 Comments
Sen. Dan Inouye reads with children

Sen. Dan Inouye reads with children

Good Morning!!

Senator Dan Inouye, who died yesterday at age 88 was a Japanese American who fought for the U.S. in World War II. From Time Magazine:

On Dec. 7, 1941, high school senior Daniel Inouye knew he and other Japanese-Americans would face trouble when he saw Japanese dive bombers, torpedo planes and fighters on their way to bomb Pearl Harbor and other Oahu military bases.

He and other Japanese-Americans had wanted desperately to be accepted, he said, and that meant going to war.

“I felt that there was a need for us to demonstrate that we’re just as good as anybody else,” Inouye, who eventually went on to serve 50 years as a U.S. Senate from Hawaii, once said. “The price was bloody and expensive, but I felt we succeeded.”

Inouye had wanted to become a surgeon, but he lost his right arm in a firefight during the war. He was elected to the House in 1959 after Hawaii became a state. Inouye became well known nationally as a member of the Senate Watergate Committee and later as chairman of the Congressional committee that investigated the Iran Contra scandal.

In one of the most memorable exchanges of the Watergate proceedings, an attorney for two of Nixon’s closest advisers, John Ehrlichman and Bob Haldeman, referred to Inouye as a “little Jap.”

The attorney, John J. Wilson, later apologized. Inouye accepted the apology, noting that the slur came after he had muttered “what a liar” into a microphone that he thought had been turned off following Ehrlichman’s testimony.

Inouye achieved celebrity status when he served as chairman of the congressional panel investigating the Iran-Contra affair in 1987. That committee held lengthy hearings into allegations that top Reagan administration officials had facilitated the sale of weapons to Iran, in violation of a congressional arms embargo, in hopes of winning the release of American hostages in Iran and to raise money to help support anti-communist fighters in Nicaragua….

The panel sharply criticized Reagan for what it considered laxity in handling his duties as president. “We were fair,” Inouye said. “Not because we wanted to be fair but because we had to be fair.”

NBC foreign correspondent Richard Engel and his production team have been released after five days in captivity in Syria. The Guardian reports:

The group disappeared shortly after crossing into north-west Syria from Turkey last Thursday (13 December). NBC had no contact with the kidnappers and asked for a news blackout about the incident, which was observed by mainstream news outlets.

There was no request for a ransom during the time Engel and his crew were missing.

After being abducted they were put into the back of a truck and blindfolded before being transported to an unknown location, believed to be near the small town of Ma’arrat Misrin.

Throughout their captivity they were blindfolded and bound, but otherwise not physically harmed, said the network.

Read more at the link.

According to Beltway Bob (AKA Ezra Klein), a deal between President Obama and Speaker Boehner is in the offing, and it isn’t a good deal for old ladies who are trying to survive on Social Security.

Boehner offered to let tax rates rise for income over $1 million. The White House wanted to let tax rates rise for income over $250,000. The compromise will likely be somewhere in between. More revenue will come from limiting deductions, likely using some variant of the White House’s oft-proposed, oft-rejected idea for limiting itemized deductions to 28 percent. The total revenue raised by the two policies will likely be a bit north of $1 trillion. Congress will get instructions to use this new baseline to embark on tax reform next year. Importantly, if tax reform never happens, the revenue will already be locked in.

On the spending side, the Democrats’ headline concession will be accepting chained-CPI, which is to say, accepting a cut to Social Security benefits. Beyond that, the negotiators will agree to targets for spending cuts. Expect the final number here, too, to be in the neighborhood of $1 trillion, but also expect it to lack many specifics. Whether the cuts come from Medicare or Medicaid, whether they include raising the Medicare age, and many of the other contentious issues in the talks will be left up to Congress.

Now how is that a win for Democrats? If we go over the cliff, Republicans are going to be blamed, and taxes will go up on everyone until Republicans give in to public outcry in early January. But Social Security, Medicare, and Medicaid cuts will inevitably be blamed on Democrats, who are supposed to fight for the social safety net. Then in 2014, Republicans will attack them for those cuts, and it will work–just as it did when Romney and Ryan falsely accused Obama of cutting Medicare benefits in the recent presidential campaign. Back to Beltway Bob:

The deal will lift the spending sequester, but it will be backed up by, yes, another sequester-like policy. I’m told that the details on this next sequester haven’t been worked out yet, but the governing theory is that it should be more reasonable than the current sequester. That is to say, if the two parties can’t agree on something better, then this should be a policy they’re willing to live with.

On stimulus, unemployment insurance will be extended, as will the refundable tax credits. Some amount of infrastructure spending is likely. Perversely, the payroll tax cut, one of the most stimulative policies in the fiscal cliff, will likely be allowed to lapse, which will deal a big blow to the economy.

Again, that doesn’t sound like a win for Obama at all. Let’s hope Beltway Bob is wrong again.

Dean Baker on the chained CPI: He argues that the chained CPI is not really applicable to seniors.

The Bureau of Labor Statistics (BLS) has constructed an experimental elderly index (CPI-E) which reflects the consumption patterns of people over age 62. This index has shown a rate of inflation that averages 0.2-0.3 percentage points higher than the CPI-W.

The main reason for the higher rate of inflation is that the elderly devote a larger share of their income to health care, which has generally risen more rapidly in price than other items. It is also likely that the elderly are less able to substitute between goods, both due to the nature of the items they consume and their limited mobility, so the substitutions assumed in the chained CPI might be especially inappropriate for the elderly population.

Baker explains for the umpteenth time that it is wrong to use Social Security cuts to lower the deficit.

It is important to remember that under the law Social Security is supposed to be treated as a separate program that is financed by its own stream of designated revenue. This means that it cannot contribute to the budget deficit under the law, because it is only allowed to spend money from the Social Security trust fund.

This is not just a rhetorical point. There is no commitment to finance Social Security out of general revenue. The projections from the Social Security trustees show the program first facing a shortfall in 2033 after which point it will only be able to pay a bit more than 75 percent of scheduled benefits. While this date is still fairly far in the future, at some point it will likely be necessary to address a shortfall.

It is reasonable to expect that the changes needed to keep the program fully funded will involve some mix of revenue increases and benefit cuts. However if the chained CPI is adopted as part of a budget deal unconnected to any larger plan for Social Security then it effectively means that there will have been a substantial cut to Social Security benefits without any quid pro quo in terms of increased revenue. This hardly seems like a good negotiating move from the standpoint of those looking to preserve and strengthen the program.

There is much much more at the link. Digby has been writing about this issue for months, and she had another good post on it yesterday.

There has always been some fantasy, mostly held by people who are about to be fleeced by Wall Street sharpies, that this country should be run like a cash business. It cannot and should not be done that way. (Ask Mitt Romney about the role of debt in a modern economy.) The problem is that this focus on debt is making it impossible to do the things we need to do to spur economic growth in the short term, which would close the deficit, and apparently the only way anyone in Washington can see to get around that is to sell off the future security of American citizens as some sort of human sacrifice for no good reason. It simply is not necessary, as Krugman shows.

John Boehner came up with a new “offer” this week-end to raise the rates on those who make a million or more each year and also agreed to take the debt ceiling off the table for the next year. Krugman thinks this is a bad deal which Obama has no good reason to take — and I would agree with him if I didn’t still see a very dangerous possibility that the administration wants to pursue some unacceptable spending cuts in order to deliver on that “balanced approach.” A looming debt ceiling fight is a very good excuse for them to do that. If kicking the can down the road another year will stop them from cutting more spending, then I’m inclined to say take the deal.

Obviously, this whole thing is ridiculous. They should get rid of this idiotic debt ceiling vote altogether: after all once they appropriate the funds they’ve agreed to pay for them whether through taxation or borrowing. This yearly vote allows them to get credit for the goodies and then later refuse to pick up the tab. But unless they are willing to give it up completely, I’d be glad to at least see it be delayed until the White House stops talking about cutting vital programs.

And yes, the taxes should go up for all income over $250,000. They can afford it. But not if the price is changing to the Chained CPI which will take the food out of the mouths of 90 year old women and squeeze veterans and disabled people who can’t afford it. In other words, the devil is in the details. If Obama hangs tough as Krugman prescribes and wins on all these points without giving up the store (also known as “making tough choices ” his own base “won’t like”) then I say go for it. I’m just not sure I have much faith that’s the game plan. If it isn’t, then maybe he should take Boehner’s offer, repeal the sequester and put this to bed for the time being. There’s been more than enough cutting already to drag this economy down. Let’s see what happens if we stop the austerity insanity for a while.

Dr. Dakinikat would probably agree with that.

Meanwhile, most Americans disapprove of the the proposed cuts to safety net programs, so maybe this will turn out to be another trial balloon that goes over like a lead balloon.

Most Americans want President Obama and congressional Republicans to compromise on a budget agreement, though they, too, are unhappy about the options that would avert the “fiscal cliff,” according to a new Washington Post-ABC News poll.

The strong support for compromise belies widespread public opposition to big spending cuts that are likely to be part of any deal.

Most Americans oppose slashing spending on Medicaid and the military, as well as raising the age for Medicare eligibility and slowing the increase of Social Security benefits, all of which appear to be on the table in negotiations. Majorities call each of these items “unacceptable.”

Wow. I’m running out of space already? Suddenly, a week before Xmas there’s more happening in the news. We’ll have to discuss other items in in the comments. So what’s on your reading list today?

Ezra Klein Reviews “Confidence Men,” and Finds it Sorely Lacking

Posted: November 5, 2011 | Author: | Filed under: Domestic Policy, Economy, Team Obama, The Great Recession, U.S. Economy, U.S. Politics | Tags: , , , , , , , , , , , | 44 Comments

Ezra Klein, AKA Beltway Bob

Ezra Klein (AKA Beltway Bob) is really coming up in the world. He somehow managed to get a gig writing a review of Ron Suskind’s book Confidence Men for the New York Review of Books. I’m impressed, I must admit.

As you probably guessed already, Klein is quite critical of the book. In fact he thinks Suskind should have written a completely different kind book instead–maybe even a couple of different kinds of books.

As I see it, Suskind set out to write an interesting and entertaining political book about Obama’s economic advisers, how they interacted with each other and the President, and how administration economic policy took shape over the first couple of years. The book is gossipy and very much focused on the people involved and their relationships with each other. As a psychologist, I found it fascinating to read Suskind’s insights.

Klein admits that

The work that went into Confidence Men cannot be denied. Suskind conducted hundreds of interviews. He spoke to almost every member of the Obama administration, including the President…He takes you inside…the Oval Office. He heads to Wall Street and back. He quotes memos no one else has published. He gives you scenes that no one else has managed to capture.

But that isn’t good enough. Klein disapproves of the gossipy, personality-centered tone of Confidence Men. He wants Suskind to provide evidence for his personal assessments of people. For example, Klein objects to Suskind’s description of Treasury Secretary Tim Geithner’s appearance at Obama’s announcement that Elizabeth Warren would be working with Geithner to set up a consumer agency that she had first conceived of and then fought for. Although Warren didn’t know it yet, she would never head the agency, because Geithner had already made a deal with the bankers: they would accept a consumer agency as long as Warren wasn’t put in charge.

Here’s the passage that Klein found offensive:

This has caused discomfort not only for the president, but also for his top lieutenants, including the boyish man in the too-long jacket at Obama’s right hip, bunched cuffs around his shoes, looking more than anything like a teenager who just grabbed a suit out of dad’s closet. That’s Treasury Secretary Tim Geithner, looking sheepish.

Klein so objected to this paragraph that he felt he had to go watch the announcement again himself, to see if Suskind’s description was accurate.

I prefer to verify. So I went back to the tape. I rewatched the September 2010 press conference where Obama introduced Warren to the country. I paid special attention to Geithner. Suskind’s right: his suit is too big. But he doesn’t look sheepish or ashamed. He looks, by turns, bored and interested. He clasps his hands behind his back. He nods attentively. He tries not to fidget. He looks like every experienced bureaucrat looks when they’re asked to stand like a prop near the president. Blank, and trying not to make any news. He failed.

But Klein doesn’t offer any evidence for his observations either. How can he know what Geithner was thinking–that he tried “not to fidget” and tried “not to make any news?” He can’t. Klein has shared his own observations and interpretations, just as Suskind did.  But Klein finds it annoying. He didn’t want to read a book about people, based on the close observations and opinions of its author. No, Klein wanted a book about policy, and he felt that

…any account of what he [Obama] has done wrong, or what he could do right, needs to provide, first and foremost, a persuasive case of how the White House could have done more to promote an economic recovery over the last three years, or could do more to accelerate one now.

Klein wanted a wonky book, heavy on policy and light on human interest, and he can’t understand why Suskind wrote something different. Quite honestly, I think Klein should go right ahead and write a book like that if he wants to. It wouldn’t be as much fun to read as Suskind’s book, but it might make people like Matt Yglesias and Brad DeLong happy.
Read the rest of this entry »

The Big Beltway Chill

Posted: October 8, 2011 | Author: | Filed under: Barack Obama | Tags: , , , , , , | 16 Comments

Autumn brings campaigns and the chilly season.  This year also seems to be bringing chilly retrospectives on the Obama Presidency.  This Presidency has disappointed many.  I think there’s finally some introspection going on within the Washington Press Corps as well as the retrospection.  They may be wondering how they became so enamored of  some one who seems so detached from leadership basics.

People have been leafing through their copies of Confidence Men.   I  read an article today by Ezra Klein called “Could this time have been different?”  Klein almost steps outside of his Beltway Bob mentality.  Almost.  Klein is still making excuses for how the administration got the economy so wrong even though the tick tock and the economic rationale make sense.   Now, politicos will have  to read this one from Scott Wilson–the white house correspondent  at WAPO–with it’s interesting title: “Obama, the loner president”.  It seems the defining campaign moment should’ve have been  “Why can’t I just eat my waffle” because Wilson says that’s how the president handles in job.

Beyond the economy, the wars and the polls, President Obama has a problem: people.

This president endures with little joy the small talk and back-slapping of retail politics, rarely spends more than a few minutes on a rope line, refuses to coddle even his biggest donors. His relationship with Democrats on Capitol Hill is frosty, to be generous. Personal lobbying on behalf of legislation? He prefers to leave that to Vice President Biden, an old-school political charmer.

Obama’s circle of close advisers is as small as the cluster of personal friends that predates his presidency. There is no entourage, no Friends of Barack to explain or defend a politician who has confounded many supporters with his cool personality and penchant for compromise.

Obama is, in short, a political loner who prefers policy over the people who make politics in this country work.

Great.  Now they figure that out.  Isn’t that just special?

So, the theme of the piece is the portrait of Obama as an isolated man about to head into a reelection campaign that’s looking more and more uphill.  His only good fortune at the moment is the one candidate that’s most likely to beat him–Mitt Romney–is the one candidate that can’t appease the vast whacky, moralistic, reactionary Republican base.  I’m actually thinking that if this does turn out to be a race between the two of them that we’re likely to see the lowest voter turnout ever.  We might as well consider the theme to be dull and duller.

The Wilson ‘essay’ is based on conversations with White House  “insiders” and allies over a period of time and although most aren’t named, you can assume that WAPO still does some due diligence in terms of vetting unnamed sources.  Well, maybe I should replace that with you would hope they still do that.  I’ve been supremely interested in the incredible amount of turnover that’s happened in the staff.  It seems the economists all but fled the West Wing.  Confidence Men only partially satiated my curiosity.  The article points out the quick and easy political response that Obama is such an intellectual and policy wonk, so professory, that he’s got some highly developed form of the Carter disease.  The White House still thinks there’s been some major accomplishments and that the press and the public have been slow to appreciate them.  I still can’t figure out how highly compromised, marginally effective legislation is supposed to enthrall and inspire.  Color me jaded.  I’ve gotten way pass the eleven dimensional chess explanation.  The article still trots that out.

To veterans of the campaign, though, it was more a matter of Washington not understanding the leadership upgrade that had just taken place. “He’s playing chess in a town full of checkers players,” a senior adviser and campaign veteran told me in the first months of the administration. Obama had a “different metabolism,” the aide explained.

“It’s not cockiness,” the adviser added, “it’s confidence.”

I wouldn’t have called it cockiness or confidence.  I thought it was basic mismanagement by failing to identify-and effectively dispatch–the priorities that sent you to the office.  People asked for a better economy and an end to wars.  The other request was less torture, less domestic spying, and more respect for the constitution.  What they got was the old Dole Health care plan of the 1990s, incredible bailouts for Wall Street,  and more of the same.  He totally got the agenda wrong.  That doesn’t seem to account for much, however, if you read the article or any of t he other semi apologetic retrospectives I referenced above.  The Washington Media still wants to like him and still wants to be right.  They’ve developed an incredible stake in an Obama come back story.

When AIG was preparing to pay its executives millions in bonuses after receiving billions in bailouts, Obama’s inner populist and inner law professor couldn’t come to an agreement. He talked about contract law, then lashed out at the greed and moral bankruptcy of Wall Street, then urged the country not to scapegoat bankers.

Who was the president listening to? The academics, bankers and campaign operatives who populated his inner circle — with personalities much like his own.

White House officials invariably told me that Obama listened to everyone in meetings, then made decisions within a smaller group, rarely reaching outside the White House. “He’s not a guy that leans on others too much,” David Axelrod, his senior adviser at the time, told me in January 2010. “He processes things in his own mind.”

In that cerebral isolation, Obama used his first year in office to chase history rather than focus on the most immediate problem of the day — an economy shedding hundreds of thousands of jobs a month.

Biden, whose last-minute lobbying had helped push through the stimulus bill, and White House Chief of Staff Rahm Emanuel, the frenetic former congressman from Chicago and onetime Bill Clinton adviser, were among the few who offered a feel for contact politics, a personal heat to offset Obama’s cool. They pressed the president to think and talk about jobs — the issue the public ranked as most important — above all else.

Instead, Obama chose health-care reform, a campaign pledge that promised him a place in American history and, in his technocratic take, would “bend the cost curve” of the country’s fiscal plight.

I wrote this years ago and I’ll write it again.  I think Obama chose health care not because of anything else other than to prove he could push through something that was considered Hillary Clinton’s Waterloo.  It often strikes me as supremely ironic that we got the Republican Health Care plan out of all that and now he owns it big time.  The Lincoln Chaffee plan developed by the Heritage Foundation and anointed Dole Care that was adopted by Romney for Romney care is now ObamaCare.  The Democrats burned decades of political capital passing the plan they fought against tooth and nail in 1993-1994.  Quelle ironie!

So, this is the killer part of the story.  It details acts of narcissism as some kind of Obama brand of empathy.  This I really don’t get at all. How can a person that self-identifies with every one but misunderstands so many people be some kind of American every man?

On the stump, Obama is often the star of his own story, preferring a first-person identification with nearly any issue.

He has called himself the first Pacific president, embraced his Irish roots, joked about being part Polish because of the years he spent in Chicago and presented his up-by-the-bootstraps life as proof that America can dig itself out of its current hole.

The next part of the article contrasts the Obama style to Clinton. This makes Obama look like a complete fish out of water for the career he chose. As an example,  the narrative moves to the President’s attempt to preach religion to the Congressional Black Caucus which managed to raise more than a few eyebrows.

He addressed the audience as one of them. But the first African American president has made clear that his race does not shape his policies, nor does he identify as a black politician. So his final command was puzzling, even infuriating, to some in the crowd.

“I expect all of you to march with me and press on,” he said. “Take off your bedroom slippers, put on your marching shoes. Shake it off. Stop complaining, stop grumbling, stop crying. We are going to press on. We’ve got work to do, CBC.”

To watch Rep. Maxine Waters (D-Calif.), a former CBC chair, address the president’s hectoring a few days later — she said Obama must have gotten “carried away” — was to watch someone unable to explain the motivations of someone she did not truly know.

This is where I want to actually head back to that Beltway Bob piece because Klein thinks there is actually some indication that the White House sees some of its missteps and may be making a course correction.  You see some of the same narrative there as in the Wilson piece.  Is this wishful thinking on their part or political calculus on the part of OFA?

“The biggest problem we had in terms of the loss of political capital is we came in and did a bunch of stuff, and things got worse,” says Ron Klain, who served as chief of staff to Biden. “And some of that was just bad luck. If we didn’t have the 22nd Amendment and Barack Obama became president in late March rather than in late January, things would have been much worse when we came in than they were. And then the Recovery Act would have come not in February, but in May. We would already have hit bottom, and it would seem like things were getting better.”

This has led to a what-if that torments the White House’s political team: What if it hadn’t taken on so much? The administration rushed from the second bucket of bailout funds to the stimulus to the auto-industry rescue to health care to climate change legislation to financial regulation. In a world where the economy was steadily recovering, Obama might have amassed a record comparable to Franklin Roosevelt’s. But as the situation slowly deteriorated, the American people turned against the administration’s crush of initiatives. The frenetic pace made the White House seem inattentive and unfocused amid a mounting crisis.

But the alternative is similarly difficult to imagine. No one believes that significantly reining in the agenda would have led to much more stimulus. Perhaps the president would have benefited politically from speaking more about jobs and less about health care, but then again, he had historic majorities in both houses of Congress and had come into office promising dramatic change.

Yes, I do think there was this miscalculation that a minimal stimulus built to look like a compromise was going to wave a magic wand over an economic crisis that stemmed from a financial meltdown.  These kinds of crises drag on for decades.  All we have to do is look at the Asian currency crises of 1997-1998 and Japan to figure that out.  That even misses our own experience in the aftermath of the last two of ours in the 1920s and the 1870s.   However, when you’re elected on an agenda to end wars, jump start the economy, and stop executive branch excesses and you do none of the above, how the hell do you explain yourself period?  When you’re given such a clear agenda and you fail to lie out the strategies and get with the program and stick with it, it can only be called bad leadership and worse management.  It’s been three continual years of this.  No one else is going to pay attention to the other things when you never handle the basic mandate.

Again, I’m seeing these retrospectives as The Village trying to figure out how they get the narrative in 2008 so wrong.  They still so want to be right about him.   It’s hard for me to take anything Obama says too seriously now given the disconnect of the last three years from his political rhetoric of three years ago.  I see it less as changing course and more as just trying to suck every one into the hope for change again.  Frankly, I’m pretty disgusted and at this point, I see voting as futile exercise.  Correct me if I’m wrong.

Thursday Reads

Posted: October 6, 2011 | Author: | Filed under: #Occupy and We are the 99 percent!, 2012 presidential campaign, U.S. Economy, U.S. Politics | Tags: , , , , , , , , , , , , , | 21 Comments

Good Morning!! I’m going to be heading back to Boston pretty soon, and I’m looking forward to following developments in Occupy Boston and in the Senate race. They haven’t started an Occupy Muncie protest yet, unfortunately. But you never know. This town is really suffering from the poor economy.

At Mother Jones, there is an interactive map of all the Occupy protests that have sprung up around the country. It’s pretty amazing. Funny thing. A few days ago MJ had a post by Lauren Ellis in which she looked down her nose at the #OccupyWallStreet protesters. Now they have a whole section on the Occupy Movement.

There are still plenty of so-called “journalists” dismissing the protests though. Yesterday, I posted a link to Andrew Ross Sorkin’s piece in the NYT in which he reports his trip to Zuccotti Park at the request of a anonymous nervous Wall Street CEO. Glenn Greenwald skewered Sorkin but good, concluding that Sorkin’s

CEO banking friend is right to be concerned: if not about this protest in particular then about the likelihood of social unrest generally, emerging as a result of their plundering and pilfering. That healthy fear on the part of the oligarchs has been all too absent.

Greenwald also linked to this example of “snotty, petty, pseudointellectual condescension” at The New Republic. Ugh! Read it if you dare.

Yesterday, Greenwald followed up by verbally destroying CNN’s new nighttime host, Erin Burnett.

On her new CNN show on Monday night, host Erin Burnett was joined by Rudy Giuliani’s former speechwriter John Avlon and together they heaped condescending scorn on the Wall Street protests while defending the banking industry, offering — as FAIR documented — several misleading statements along the way. Burnett “reported” that while she “saw dancing, bongo drums, even a clown” at the protest, the participants “did not know what they want,” except that “it seems like people want a messiah leader, just like they did when they anointed Barack Obama.” She featured a video clip of herself explaining to one of the protesters that the U.S. Government made money from TARP, and then demanded to know if that changed his negative views of Wall Street.

This is far from the first time Burnett has served as spokesperson for Wall Street; it’s basically what her “journalistic” career is. She angered Bill Maher a couple years ago when arguing that the rich have suffered along with the poor and middle class as part of the financial crisis, and that it would be wrong to “soak the rich” because they’re already paying so much taxes. She caused Rush Limbaugh to gush over her when she argued on TV in 2007 that all Americans benefit when the rich get richer: “the majority of Americans directly benefit from what happens on Wall Street,” she proclaimed, just over a year before the financial collapse.

In an interview last year with Vanity Fair, she insisted that people on Wall Street do not have private planes and that “there are a lot of stalwart, solid people on Wall Street. There are just a few shady people providing the fodder for big budget movies…”

Meanwhile Beltway Bob Ezra Klein has some advice for #OccupyWallStreet: they should immediately start taking advice from the liberal establishment and focus on developing policy and writing legislation in order to work through the system that they have already rejected.

The Wall Street protests seem to be gathering strength and expanding beyond the geographic limits of downtown Manhattan. The media, too, is finally amplifying the story. Whether they will grow larger and sustain themselves beyond these initial street actions will depend upon four things: the work of skilled organizers; the success of those organizers in getting people, once these events end, to meet over and over and over again; whether or not the movement can promote public policy solutions that are organically linked to the quotidian lives of its supporters; and the ability of liberalism’s infrastructure of intellectuals, writers, artists and professionals to expend an enormous amount of their cultural capital in support of the movement.

There’s lots more, but it’s basically a lecture from someone who just doesn’t get it. And speaking of people who don’t get it, George Will tries to school Elizabeth Warren in his latest column. According to Will, the “liberal project,” which Warren apparently speaks for is designed to destroy rugged individualism.

The project is to dilute the concept of individualism, thereby refuting respect for the individual’s zone of sovereignty. The regulatory state, liberalism’s instrument, constantly tries to contract that zone — for the individual’s own good, it says….

Such an agenda’s premise is that individualism is a chimera, that any individual’s achievements should be considered entirely derivative from society, so the achievements need not be treated as belonging to the individual. Society is entitled to socialize — i.e., conscript — whatever portion it considers its share. It may, as an optional act of political grace, allow the individual the remainder of what is misleadingly called the individual’s possession.

The collectivist agenda is antithetical to America’s premise, which is: Government — including such public goods as roads, schools and police — is instituted to facilitate individual striving, a.k.a. the pursuit of happiness. The fact that collective choices facilitate this striving does not compel the conclusion that the collectivity (Warren’s “the rest of us”) is entitled to take as much as it pleases of the results of the striving.

But isn’t that what Warren is pushing for? For more individuals to have opportunities to make it in America? Really, isn’t it time for George Will to retire?
Meanwhile Warren is leading in the race for the Massachusetts Democratic nomination for Senate, and she appeared in her first debate on Tuesday at my undergraduate alma mater, U. Mass Lowell.

In her first debate as a candidate for U.S. Senate Tuesday night, Harvard law professor Elizabeth Warren declined to criticize her fellow Democratic candidates, taking aim instead at Republican Sen. Scott Brown, whom the Democratic nominee will face, and Wall Street.

“Forbes magazine named Scott Brown Wall Street’s favorite senator. I was thinking that’s probably not an award I’m going to get,” she said to applause and laughter from the audience at the University of Massachusetts-Lowell. Two recent polls put Warren and Brown in a statistical tie.

She also made the audience laugh and applaud with the second question, which asked each candidate how they paid for college, since Brown posed nude for Cosmopolitan to pay.

“I kept my clothes on,” she quipped. She added that she borrowed money to go to a public university and had a part-time job.

Warren also drew applause for her tough talk on Wall Street. “The people on Wall Street broke this country, and they did it one lousy mortgage at a time. It happened more than three years ago, and there has been no real accountability, and there has been no real effort to fix it. That’s why I want to run for the United States Senate,” she said.

Go Elizabeth go!!

Another voice for the middle class, Robert Reich, explains why Wall Street is extremely nervous about the economic crisis in Europe.

If you want the real reason, follow the money. A Greek (or Irish or Spanish or Italian or Portugese) default would have roughly the same effect on our financial system as the implosion of Lehman Brothers in 2008.

Financial chaos….a default by Greece or any other of Europe’s debt-burdened nations could easily pummel German and French banks, which have lent Greece (and the other wobbly European countries) far more.

That’s where Wall Street comes in. Big Wall Street banks have lent German and French banks a bundle.

The Street’s total exposure to the euro zone totals about $2.7 trillion. Its exposure to to France and Germany accounts for nearly half the total.

And it’s not just Wall Street’s loans to German and French banks that are worrisome. Wall Street has also insured or bet on all sorts of derivatives emanating from Europe — on energy, currency, interest rates, and foreign exchange swaps. If a German or French bank goes down, the ripple effects are incalculable.

Read the rest at Huffpo.

There are a couple of interesting reads about Republican candidates at the New York Review of Books. The first is by novelist Larry McMurtry: The Rick Perry Hustle Here’s a brief sample:

What Perry has brought to the Republican muddle thus far is his abundant, if unfocused, energy. He rushes from debate to debate, gives many interviews, gets his picture on the cover of TIME; yet all his politicking is curiously affectless. He makes sounds, but where’s the personality? Hillary Clinton has a personality; so does Sarah Palin. Either of those women could cut Governor Perry off at the knees, and will if given the chance.

It’s not been said so I’ll say it: as a politician Rick Perry is fundamentally lazy, so far as actual governing is concerned, content to run things mainly by sound-bite. He makes lots of decisions but lingers on no issue very long; there’s little follow-through. Clemency, or its absence, is an example. Two hundred thirty-four humans have been executed in Texas on his watch and only recently has he been stirred to a review. He believes that the State Board of Pardons and Paroles is so infallible that there’s no reason for him to lose sleep over the fate of this or that prisoner. The Governor has much more confidence in the Board than the Board has in itself; its members are well aware that even, or especially in Texas shaky verdicts have come down. The Governor, a man with a notably short attention span, has a lot more to think about than the death chamber.

An irony of his sudden emergence as a front-runner is that his few humane decisions—the HPV vaccine, which is safe and helpful, and the tuition credit for the children of illegals, which could help keep gangs of feral children off our streets—are what may sink him with the Tea Party and his own rabid right wing. And this is the wing he has assiduously cultivated his whole political life.

The other NYRB article of interest is by Christopher Benfry: Mitt, We Hardly Knew Ye!

We’re feeling vulnerable and surly these days in western Massachusetts, as the leaves turn yellow, the Red Sox fade, and winter looms. Our corridor of New England along the Connecticut River endured, during the summer months, a ruinous tornado in Springfield, an earthquake, of all things, and Hurricane Irene, which knocked out roads and historic covered bridges in our hill towns and across neighboring Vermont, and left a lot of people homeless and adrift. It’s our Katrina moment, we sometimes think, with slightly grandiose self-pity, as Republicans in Congress demand budget cuts if FEMA is to pay for disaster relief in the blue states.

We don’t see much of Mitt Romney, our ex-governor, in these troubled times. Then again, we never did. Our most indelible memories are of Mitt leaving—“the sight of Mitt’s back,” as a friend of mine put it, as he went off to lay the groundwork for yet another campaign. Mitt ran for the Senate against Ted Kennedy in 1994, lost, and left the state to salvage the Salt Lake City Olympics. When he returned to run for governor in 2002, he had to go to court to prove that he sort of lived in Belmont, outside Boston. Then, after a couple of years in the state house, he left again to campaign for the presidency, spending two thirds of his time out of state in 2006. Mitt has sold his house in Belmont and now lives in the important primary state of New Hampshire (at his estate on Lake Winnipesaukee) or San Diego or maybe Utah—anywhere but Massachusetts.

In the Republican debates, Mitt pretends that his ties to Massachusetts are tenuous. Mitt’s greatest achievement as governor, the Massachusetts health care system (which passed with Ted Kennedy’s support and two dissenting votes in the state legislature), is now his greatest liability among Republicans, who see it as a stalking horse for Obamacare. Mitt now claims it was right for our quirky state but not for the nation. He has yet to explain why.

When Mitt trumpets his experience in American business, he rarely mentions that Bain, the consulting and investment conglomerate in which he amassed his $200 million fortune, is a Boston firm.

And so on…Romney used our state as a springboard and then denied even knowing us.

I’ll end there for today. What are you reading and blogging about?

Tuesday Reads: Obama’s Deficit-Reduction Plan, Backsliding Obots, Rev. Wright, and Dr. Doom

Posted: September 20, 2011 | Author: | Filed under: American Jobs Act, Barack Obama, Democratic Politics, Domestic Policy, Global Financial Crisis, income inequality, Medicaid, Medicare, morning reads, Social Security, U.S. Economy, U.S. Politics | Tags: , , , , , , , , , , , | 45 Comments

Good Morning!! Let’s see what’s happening in the news today.

Well, of course the Obama apologists are claiming that he has suddenly grown a backbone of steel and become the liberal messiah they all dreamed of in 2008. I already told you about Ezra Klein’s delusional column last night. The other usual suspects are also getting leg tingles, and former Obots are starting to backslide.

Greg Sargent has put on his rose-colored glasses and taken a few swigs of LSD-laced Koolaid:

This has to be the clearest sign yet that Obama has taken a very sharp populist turn as he seeks to frame the contrast between the parties heading into 2012. During his remarks this morning, Obama directly responded to Republicans accusing him of “class warfare,” but rather than simply deny the charge, he made the critical point that the act of protecting tax cuts for the rich is itself class warfare, in effect positioning himself as the defender of the middle class against GOP class warriors on behalf of the wealthy.

Wow! I’ll bet it never occurred to anyone that income inequality equals class warfare until Obama figured it out. Amaaaazzzzing!!

A senior administration official tells me that parts of Obama’s “class warfare” broadside were ad-libbed. Here’s the key chunk — and it’s a script that could have been written by just about any card-carrying member of the “professional left:”

Warren Buffett’s secretary shouldn’t pay a higher tax rate than Warren Buffett. There’s no justification for it. It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million…
We’re already hearing the usual defenders of these kinds of loopholes saying, “this is just class warfare.” I reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or a teacher is class warfare. I think it’s just the right thing to do. I believe the American middle class, who’ve been pressured relentlesly for decades, believe it’s time that they were fought for as hard as the lobbyists and some lawmakers have fought to protect special treatment for billionaires and big corporations.
Nobody wants to punish success in America … All I’m saying is, that those who have done well, including me, should pay our fair share in taxes to contribute to the nation that made our success possible.

Holy sh*t!! Obama ad libbed? Hope ‘n’ change! Change we can believe in! I guess it’s just me, but I thought that speech sounded kind of weak and defensive. But what do I know?

Booman has an even better rationalization for Obama’s behavior than Beltway Bob Ezra Klein. According to the ever-gullable Booman,

…the president has a lot more credibility now when he takes his ideas to the public and says the the Republicans aren’t interested in compromise. You have to try and fail to get a compromise before that argument has any resonance. It’s not so much 11-Dimensional chess as basic common sense. Everyone’s poll numbers suffered during the summer, but no one’s standing was weakened more the Republicans’. That’s not an accident.

So Obama must have planned this. The man is brilliant!!

Digby says Obama is in campaign mode and that’s why he’s trying to sound strong and determined.

My first thought is that it appears the administration has finally decided that there’s nothing to be gained with exclusively delivering post-partisan pablum. It certainly sounds as though he’s thrown down the gauntlet. Unfortunately, the President appears to want to have two fights going into this election, one over job creation and one over whose plan to cut the deficit is better, which I think is a confusing waste of time. (Focus like a laser beam on jobs and tell the Republicans they’ll have to go through you to get to the safety net and I think people would instinctively understand that he’s on their side.) But that isn’t this president’s style and perhaps it wouldn’t be believable if he did it. So, this is at least a change of tactics, more confrontational in tone, which is his best hope for reelection since it turns out people aren’t really all that impressed that he’s the most reasonable guy in the room if it appears that he gets punk’d every time.

Digby things the proposed Medicare cuts are a loser politically, though–especially for Congress members running for reelection.

Jon Walker at FDL was “pleasantly surprised” that Obama didn’t call for Social Security cuts or “any specific major cuts to Medicare benefits,” but he hasn’t gone back on the Koolaid.

This is a positive development. Having President Obama publicly call for major cuts in Medicare benefits or change in age eligibility would have been terrible for our senior citizens and a total political disaster for the Democratic party. But it is important to remember: simply because the president did not put such cuts on the table doesn’t mean he took these cuts off the table.

President Obama has already privately signaled that in theory he would be willing to support major cuts to Medicare. And he’s hinted he’d be willing to cut Social Security benefits. They were both earlier put the table for a theoretical deal and this speech didn’t take them off the table. There was no veto threat to protect Medicare and Social Security benefits.

Actually, there do seem to be specific proposed cuts to Medicare. Jonathan Cohn breaks down the detail of the President’s deficit reduction proposal in a very technical piece that you can read if you’re interested. According to Cohn,

President Obama’s new deficit reduction plan includes about $320 billion in cuts to government health care programs. Most of the cuts from Medicare and that is sure to get a lot of people’s attention, if not now then in the presidential campaign.

But these reductions are less severe, and less worrisome, than some of the proposals Obama indicated he was willing to support over the summer, while he was negotiating with House Speaker John Boehner. In particular, Obama did not call for increasing the Medicare eligibility age from 65 to 67, as folks like me feared he would.

In fact, the cuts Obama has in mind are more or less consistent with the kind of cuts that you find in the Affordable Care Act: They are reductions designed to change the way Medicare pays for treatment and services, ideally (although not always) in ways that will actually improve the efficiency or quality of care. To the extent they would force individual seniors to pay more, it’d be in the form of higher premiums from wealthy seniors or higher co-pays for treatments likely to be unnecessary or wasteful.

For a reminder of who Obama really is, I’ll turn to Glenn Ford at the Black Agenda Report. His post was written a few days ago–before today’s speech–but I still think he has Obama’s number.

The GOP can count on Obama to offer up Social Security on the alter of austerity, as he has done consistently since January, 2009, while still president-elect. Back in April, he proposed $4 trillion in cuts over 12 years – nearly as draconian as his hand-picked committee – with the focus on the safety net. “By 2025,” warned the apocalyptic and grossly misleading president, “the amount of taxes we currently pay will only be enough to finance our health care programs, Social Security, and the interest we owe on our debt.”

Obama promises that his grab-bag, mostly supply-side and wholly inadequate jobs scheme will largely be “paid for” by cuts that include “modest adjustments [hah!] to health care programs like Medicare and Medicaid.”

Social Security stands to be mortally wounded at Obama’s hand. His second round of cuts in the payroll tax further undermine, not just the program’s trust fund, but its status as a free-standing entity outside of the usual congressional process. Congress will, theoretically, make up the temporary shortfall in payroll taxes through appropriations. But that puts Social Security in the middle of the budget deficit debate, where it does not belong and from which it has been purposely shielded since its origins in President Franklin Roosevelt’s New Deal. Through rhetoric and calculated action, Obama has for the past two and a half years been in league with Republicans in falsely conflating Social Security and the federal debt. He is now positioned to knock the program from its protective pedestal.

The Social Security cuts are already taken care of as long as the GOP goes along with extending the payroll tax holiday. The more money Obama can suck out of the Social Security trust fund, the more likely he can “reform” the Social Security into a welfare program or Wall Street ATM.

If Obama succeeds, Social Security will become just another “entitlement” to be mangled in a grand bargain with the GOP, like Medicare and Medicaid. Obama wants to be remembered as the president who brought the Republicans and the right wing of the Democratic Party into harmonious consensus – over the dead carcass of the New Deal. That’s what he means by “Go big!”

Chris Hedges has another excellent article up at Truthdig. It’s an interview with Obama’s former pastor and spiritual adviser: “The Rev. Jeremiah Wright Recalls Obama’s Fall From Grace.” I know not everyone will agree with Hedges’ point of view, but I mostly do. As outlandish as Wright was made to seem in the media, I couldn’t fault much of what I heard him say about America and racism. It’s a lengthy article, but I hope you’ll take a look at it.

One of the things Wright discussed with Hedges was the Martin Luther King Memorial in Washington DC. Wright himself raised $200,000 for the project.

“I think it’s a wonderful thing that the country would recognize someone as important as Dr. King,” Wright said when I reached him by phone in Chicago, “and recognize him in a way that raises his likeness in the Mall along with the presidents. He’s not a president like Abraham Lincoln or George Washington. But to have him ranked among them in terms of this nation paying attention to the importance of his work, that’s a good thing.”

“I read Maya Angelou’s piece about the way the quote was put on the monument,” Wright said in referring to the editing of a quote by King on the north face of the 30-foot-tall granite statue. The inscription quote reads: “I was a drum major for justice, peace and righteousness.” But these are not King’s words. They are paraphrased from a sermon he gave in which he said: “If you want to say that I was a drum major, say that I was a drum major for justice. Say that I was a drum major for peace. I was a drum major for righteousness. And all of the other shallow things will not matter.” Angelou said the mangled inscription made King sound “arrogant.”

“I read the explanation as to why we couldn’t include the whole quote,” said Wright, who helped raise $200,000 for the monument. “Kids a hundred years from now, like our pastor who was born three years after King was killed, they’re going to see that and will not get the context. They will not hear the whole speech, and that will be their take-away, which is not a good thing. My bigger problems, however, have to do with all the emphasis on ’63 and ‘I Have a Dream.’ They have swept under the rug the radical justice message that King ended his career repeating over and over and over again, starting with the media coverage of the April 4, 1967, ‘A Time to Break Silence’ message at the Riverside Church [in New York City]. King had a huge emphasis on capitalism, militarism and racism, the three-headed giant. There is no mention of that, no mention of that King, and absolutely no mention of the importance of his work with the poor. After all, he’s at the garbage collectors strike in Memphis, Tenn., when he is assassinated. The whole emphasis on the poor sent him to Memphis. But that gets swept away. It bothers me that we think more about a monument than a movement. He had a movement trying to address poverty. It was for jobs, not I Have a Dream, not Black and White Together, but that gets lost.”

He’s right. The powers that be have worked for years to minimize King’s work to end the Vietnam war as well as his determination to wipe out poverty. It’s interesting that this is the second time King has been misquoted on Obama’s watch.

This post is already too long, so I’ll end with an article by Dr. Doom (Nouriel Roubini): Eight drastic policy measures necessary to prevent global economic collapse. None of them will be popular. The first recommendation is that

we must accept that austerity measures, necessary to avoid a fiscal train wreck, have recessionary effects on output. So, if countries in the Eurozone’s periphery such as Greece or Portugal are forced to undertake fiscal austerity, countries able to provide short-term stimulus should do so and postpone their own austerity efforts. These countries include the United States, the United Kingdom, Germany, the core of the Eurozone, and Japan. Infrastructure banks that finance needed public infrastructure should be created as well.

Read the rest and weep. Our current “leaders” aren’t likely to pay any attention.

So sorry if I depressed you with that one. What are you reading and blogging about today?

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