Saturday Reads: Obama’s “Grand Bargain” Rears Its Ugly Head Again, and Other News

Posted: October 26, 2013 | Author: | Filed under: Barack Obama, Medicaid, Medicare, morning reads, seniors, Social Security, U.S. Economy, U.S. Politics | Tags: , , , , , , , , , , , , , , | 28 Comments

coffins

Good Morning!!

Just in time for Halloween, Obama’s nightmare “Grand Bargain” once again rears its ugly head. Yesterday morning Bloomberg’s Joshua Green followed a hunch and attended a briefing by the President’s top economic adviser (who is not an economist). According to Green, Sperling told Democrats “they’ll have to swallow entitlement cuts.”

In his usual elliptical and prolix way, Sperling seemed to be laying out the contours of a bargain with Republicans that’s quite a bit different that what most Democrats seem prepared to accept. What stood out to me was how he kept winding back around to the importance of entitlement cuts as part of a deal, as if he were laying the groundwork to blunt liberal anger. Right now, the official Democratic position is that they’ll accept entitlement cuts only in exchange for new revenue—something most Republicans reject. If Sperling mentioned revenue at all, I missed it.

But he dwelt at length—and with some passion—on the need for more stimulus, though he avoided using that dreaded word. He seemed to hint at a budget deal that would trade near-term “investment” (the preferred euphemism for “stimulus’) for long-term entitlement reform. That would be an important shift and one that would certainly upset many Democrats.

Here’s some of what Sperling had to say. He led off with the importance of entitlement cuts. (All emphasis is mine):

“Sometimes here [in Washington] we start to think that the end goal of our public policy is to hit a particular budget or spending or revenue metric—as if those are the goals in and of itself. But it’s important to remember that each of these metrics … are means to larger goals. … Right now, I think there is among a lot of people a consensus as to what the ingredients of a pro-growth fiscal policy are. It would be a fiscal policy that—yes—did give more confidence in the long run that we have a path on entitlement spending and revenues that gives confidence in our long-term fiscal position and that we’re not pushing off unbearable burdens to the next generation. That is very important.”

After Green’s article was posted, White House spokesperson Amy Brundage tried to minimize the talk of cuts in the safety net in the following e-mail:

“Gene was reiterating what our position has been all along: that any big budget deal is going to have to include significant revenues if Republicans insist on entitlement reforms. And any budget deal needs to have first and foremost the goal of creating good jobs for middle class families and growing the economy—that’s our north star in any budget deal, big or small.”

Uh huh. They know Americans are paying attention to the constant threat of cuts in Social Security, Medicare, and Medicaid. We need to stay vigilant and keep pushing back hard.

At Daily Kos, Joan McCarter responded: No, White House advisor Gene Sperling, entitlement cuts are not necessary.

You know what would be a really, really crappy idea? Making cuts to programs that are keeping millions from poverty in order to make a bad economy marginally better. But that’s what President Obama’s top economic advisor—Gene Sperling, director of the White House’s National Economic Council—is telling Democrats they’ll have to swallow….

Yeah, that would upset many Democrats. It would upset a helluva lot of voters, too. Millions and millions of them who have every reason right now to vote against Republicans. It would probably also not go over too well with the next generation who’s going to be far less impacted by the national debt than by having no hope of a secure retirement because a handful of austerity fetishists sold them up the river when they were young.

Sperling is saying that this will have to be done because “we still need to give this recovery more momentum.” Because of course the answer to the recovery is sacrificing some old people. By all means, get their skin in the game. They maybe have an inch or two of skin to spare.

Sign the petition from Senator Bernie Sanders, Daily Kos and an enormous coalition of progressives demanding that Congress and the President oppose any grand bargain which cuts Social Security, Medicare and Medicaid benefits.

Here’s an article at The Atlantic that Obama and Sperling should read: Raising the Medicare Age: A Popular Idea With Shockingly Few Benefits

Increasing the Medicare age would barely save the government any money, while increasing healthcare spending overall by keeping seniors in less-efficient private insurance (if they even have it). Other than that, Mrs. Lincoln, the policy is fine.

It may seem obvious that raising the Medicare age should save money. After all, the projected rise of the long-term debt is mostly about the projected rise of federal health-care spending. If we raise the Medicare age, Washington can wait longer to pay for seniors’ health care, which means they’ll pay less, overall.

Any time there’s any chance for any kind of budget bargain, “grand” or otherwise, the discussion inside the Beltway inevitably turns to hiking the Medicare age. (Call it Peterson’s Law: As a fiscal debate grows longer, the probability of a CEO proposing a higher Social Security and Medicare age approaches one). Right on cue, this got trial-ballooned during the debt ceiling talks in 2011, and then again during the fiscal cliff talks in 2012. Professional deficit hawks think of raising the Medicare age as a sign of seriousness. It’s not so much about the money it saves as the message it supposedly sends markets: that the debt will be fixed.

Except it’s all a pack of lies. Read all about it at the link.

It’s been a year since Hurricane Sandy hit the East Coast and caused so much havoc that it was “the second-costliest hurricane in United States history.” In July 2013, it came out that four charities had been holding back millions in donations that were collected specifically for Sandy relief. Now NY is forcing them to cough up some of the money. From the NY Daily News:

Four charities that had been under fire for sitting on millions of dollars of Hurricane Sandy relief funds have agreed to pony up $10 million to aid victims of the storm.

The charities — including the American Red Cross and a fund created by New Orleans Saints quarterback Drew Brees — reached an agreement with state Attorney General Eric Schneiderman. The deal came after revelations in July that 40% of the $575 million in Sandy aid collected by 90 charities had been disbursed within six months of the storm.

“We have been dogged about making sure that when they raise money and tell the world they are going to spend it on Sandy recovery, they in fact spend it on Sandy recovery,” Schneiderman said during an appearance Thursday in hard-hit Long Beach, L.I.

Brees’ charity had seriously dropped the ball, having received a single $300,000 donation but only allocating $75,000 of it, officials said.

Under the agreement with Schneiderman, the Brees Dream Foundation agreed to disperse the remaining $225,000 by October 2014, the second anniversary of the storm.

In less serious news–it IS Saturday after all, Gawker has learned that Fox News’ Shepard Smith began carrying on an office romance with a young producer at Fox, Giovanni “Gio” Graziano. Apparently, the two have been seen together all over Manhattan.

Gawker has learned that Smith is dating a 26-year-old Penn State grad and Fox Business producer named Giovanni “Gio” Graziano. According to multiple sources with knowledge of their relationship, the couple met sometime after Graziano started working at Fox Report in October 2011 as a production assistant. He’s the man with whom Smith frequents Bathtub Gin.

“Yes, that’s Shepard’s boyfriend,” Katya Minskova, the Bathtub Gin waitress Smith berated in March, confirmed to Gawker when shown a photo of Graziano. Another source who had seen them together at the Chelsea speakeasy confirmed Graziano’s identity as well. Both sources say they saw Graziano and Smith together at the bar on multiple occasions, and that they appeared to be romantically involved.

While Smith and Graziano’s boss Roger Ailes, a notorious homophobe, was apparently kept in the dark about the relationship—“higher ups had no idea,” a source close to Graziano said—the pair doesn’t appear to have gone to great lengths to keep the workplace romance from their co-workers.

Shep Smith arranged for Graziano to be transferred to Fox Business a year ago, so the two wouldn’t be directly working together. Now it’s not clear if Graziano is even working at Fox anymore.

Graziano’s current status at Fox is unclear. His LinkedIn profile indicates that he is currently employed at Fox Business (after three years as a production assistant at Fox News, including one year at Smith’s show). But the source close to Graziano claimed that he abruptly left Fox in mid-July. Graziano “dropped off the planet, cut off all his friends, to be with Shep,” the source said. “His former work friends are clueless about his current whereabouts.”

Very interesting . . .

I noticed this story at The Atlantic a few days ago, and saved it for today. Go to the link to check out this GIF of most popular baby girl names from 1960 to the present, based on data compiled by the Social Security Administration. Rebecca Rosen writes:

My friend Judy used to always say that whenever she met another Judy, she knew exactly how old that Judy was—to the day.

Now that level of precision might be a bit of a stretch, but, as the above map wonderfully shows, there’s good reason for that line of thinking. The most popular baby girl names in the United States are flashes in the pan—each one appearing on the map briefly, before being swept out by an up-and-comer.

The map was built in Adobe Illustrator by Deadspin‘s Reuben Fischer-Baum using data from the Social Security Administration. “Color palette,” Fischer-Baum wrote to me over email, “has to be credited to Stephen Few, from his excellent data viz book Show Me The Numbers.” Earlier drafts gave each name a unique color, he says, but in the end “it was a lot cleaner and more interesting to limit the palette to just the most popular name for any given year, and put the rest in grayscale so you could see how the different ‘eras’ of top names progressed.”

Over at Jezebel, Fischer-Baum describes the picture that emerges:

Baby naming generally follows a consistent cycle: A name springs up in some region of the U.S.—”Ashley” in the South, “Emily” in the Northeast—sweeps over the country, and falls out of favor nearly as quickly. The big exception to these baby booms and busts is “Jennifer”, which absolutely dominates America for a decade-and-a-half. If you’re named Jennifer and you were born between 1970 and 1984, don’t worry! I’m sure you have a totally cool, unique middle name.

Finally, here’s a really scary story for you from Talk to Action: A Majority of Americans 18-29 Years Old Now Believe in Demon Possession, Shows Survey.

Are Americans becoming less religious? While church affiliation is probably declining, don’t expect the atheist revolution anytime soon:

Over one half (63 percent, to be exact) of young Americans 18-29 years old now believe in the notion that invisible, non-corporeal entities called “demons” can take partial or total control of human beings, revealed an October 2012Public Policy Polling survey that also showed this belief isn’t declining among the American population generally; it’s growing.

Please read the whole creepy article at the link. It will scare you silly!

Those are my recommended reads for today. Please let us know what stories you’re following today by posting the links in the comment thread.

Monday Reads

Posted: October 21, 2013 | Author: | Filed under: morning reads | Tags: , | 36 Comments

GBcartoon Good Morning!

The Federal Government has reopened.  The Giant Panda Cam is back up.   The exchanges set up by the Affordable Care Act are working in the states where the governor’s accepted the Medicaid expansion and have spotty participation in some other places.  Fox News is back to Benghazi conspiracy theories.  Why can’t I get the vision of more icky Grand Bargaining out of my head?  Robert Kuttner is right there with me on the worry couch.

What would the latest incarnation of the grand bargain look like? The Republicans, worried about the cuts in Pentagon spending mandated by the sequester (which is still in effect) propose to allow military spending to rise in exchange for cuts in Social Security and Medicare. Excuse me? This is a little like saying, I’ll take your house and in exchange you have to give me your money. Right, we’ll cut Social Security and Medicare in order to increase money for the military. Are you kidding? It gets worse. In exchange for this proposed deal, Republicans are not willing to talk about raising taxes or restoring other social spending or to stop trying to undermine the Affordable Care Act. The only good thing about this proposed bargain is that is should be dead on arrival. Senate Majority Leader Harry Reid immediately declared that he wanted on part of any such deal. But President Obama, who has flirted with grand bargains in the past, was more equivocal. He has already put disguised cuts in Social Security in his own 2014 budget, though a revision of annual cost of living adjustments. The deal to keep the government set a deadline of December 13 for some kind of progress on a grand reform of entitlements and taxes. That’s only eight weeks away. It is preposterous to think that a bargain on taxes, social insurance, and deficits that has eluded the two parties throughout the Obama administration can be struck in less than two months. One has to hope that the deadline comes and goes, and that when Republicans think about shutting down the government again when the continuing resolution expires in January, they will think twice. But that will happen only if Reid, Pelosi, and House and Senate Democrats display the same resolve that they did in the last round. And given his past dalliances with putting Social Security and Medicare on the block, some of that resolve may need to be displayed against their president.

There’s likely to be some pressure because the Republican Party’s right wing still hasn’t given up its demands and will likely cause issues again. This means that way out there Republicans may continue to move the middle ground further toward the right wing.  What’s going to happen as some of these incumbents start seeing primary challengers?

The more important intraparty fight will begin playing out chiefly in Senate primaries next year, with the targeting of incumbents like Mr. Cochran; Mitch McConnell, the minority leader; Lindsey Graham of South Carolina; and perhaps Lamar Alexander of Tennessee and Pat Roberts of Kansas. Their perceived roles as moderating drags on Tea Party-inspired senators like Ted Cruz of Texas and Mike Lee of Utah in the shutdown negotiations has galvanized conservative organizations to elect more such Republicans. Mr. DeMint said he thought the power of the establishment and its corporate money was waning. “It’s harder to buy influence in Washington now,” he said. That is certainly true in the House, the bulwark of Tea Party conservatism thanks to the overwhelmingly Republican nature of many of the districts and the less expensive campaigns necessary in them. As the Republican retreat on the shutdown demonstrated, Mr. Cruz and Mr. Lee are very much outnumbered in the Senate. “The lesson is, we need more reinforcements,” said Daniel Horowitz, an official with the Madison Project. Groups like his are more reliant on smaller dollar donations than their rivals. The U.S. Chamber of Commerce and Crossroads, for example, can summon large amounts from donors across the business spectrum, many of whom are expressing concern about the latest turn of events on Capitol Hill and are intent on avoiding nominees like Richard Mourdock of Indiana, who unseated Senator Richard G. Lugar, a longtime veteran, in the primary but lost in the general election after making a damaging comment on rape. “I have seen the problems in some of these primaries where we’ve knocked off some pretty good candidates and it resulted in nothing for us — like Lugar,” said Mel Sembler, a Florida real estate developer and former ambassador who helps Crossroads raise money. Spencer Zwick, the chief fund-raiser for Mr. Romney’s campaign, said individual donors tell him they are eager to help the establishment wing’s cause however they can. “There are a lot of individual donors who were supportive of Mitt’s campaign who are quietly waiting to figure out how they can play, and I think there’s a lot of appetite to make sure that we nominate candidates who can win general elections,” he said. The Tea Party-aligned groups say they have an established record of winning primaries against Republican rivals with deep corporate backing. “We’ve always been outspent by orders of magnitude,” said Matt Kibbe, the president of FreedomWorks. And they do have some big donors, like grand_bargainthe multimillionaire investor Foster Friess, who backed a failed primary challenge to Mr. Hatch in Utah last year and indicated in an interview last week that he would consider new “opportunities to put young, dynamic people in.”

Then, there are the lobbyists who will be looking to get something from resorting out sequestration.

With automatic cuts to the militaryset to take effect by January and a separate round of cuts scheduled forMedicare, lawmakers will have to decide who gets hit the hardest. Washington’s lobbying machine — representing older citizens, doctors, educators, military contractors and a wide range of corporate interests — is gearing up to ensure that the slices of federal money for those groups are spared in new negotiations over government spending. It is a debate that almost no one involved wants to have so soon after the nasty fight over the federal budget, which produced the 16-day shutdown and again failed to reverse the automatic cuts resulting from previous disagreements. But Congress managed to reopen the government and extend the nation’s borrowing limit largely by creating a new series of deadlines that run through February, giving special interests several chances to influence the process. So far, the defense industry is likely to be hit the hardest, since the automatic cuts, known as sequestration, set for January would slice an additional $20 billion from the Pentagon’s budget. “It’s fair to say the volume in Washington is going to be deafening,” said Marion Blakey, the chief executive of the Aerospace Industries Association. Republicans on Capitol Hill are determined to mitigate those cuts by spreading them among various social programs, like education and Social Security, bringing dozens of other special-interest groups into the picture. “The perfect storm is coming” is how one health care industry lobbying coalition put it in an advertisement, complete with dark clouds and lightning, that ran the day the shutdown ended. “Tell Washington, no more hospital cuts.” AARP, the giant nonprofit group that represents older citizens, has kicked off a million-dollar radio advertising campaign warning that “seniors are no bargaining chip.”

I’m not sure if you caught the fun stuff that went on last week when billionaire Pete Peterson’s attempt to end social security and medicare as we know it known as the group “Fix the Debt” tried to create a twitter sensation.  They got more than they bargained for when the popularity of their ideas got trolled by thousands of twitter users.

When billionaire Pete Peterson’s Fix The Debtdecided to hold a Q&A  session on Twitter to sell corporate America’s austerity agenda, they must not have expected to be trolled. First rule of Twitter: always  expect the trolls. By the time the whole real-time conversation was called off, the stream for #FixTheDebtQA was 100% opposition.grandbudget This should be heartening to those of us who would rather see Social Security expanded, not slashed

More epic trolling of the group can be found here.

“Fix the Debt” just felt Twitter’s sweet, trollish wrath. Championed by Alan Simpson and Erskine Bowles, Fix the Debt — which The Nation magazine called a “fearmongering campaign to convince Americans that the deficits the United States has run throughout its history have suddenly metastasized” — held a Twitter live chat this afternoon to discuss next steps in America’s ongoing fiscal squabble. And it didn’t go so well, with the #fixthedebtqa soon teeming with jokesters and those very much against Fix the Debt’s message.

Senate Minority Leader Mitch McConnell is already sounding the trumpet of deficit doom.

Senate Minority Leader Mitch McConnell (R-Ky.) suggested Sunday that the automatic spending reductions known as the sequester have given his party leverage moving into future budget negotiations. The government-wide cuts, which took effect in March as a result of the Budget Control Act, trim spending by more than $80 billion during this fiscal year alone. They are scheduled to continue for another nine years with deeper cuts unless Congress and the White House agree to an alternative deficit-reduction plan. McConnell said on CBS’s “Face the Nation” that he would not budge on the Budget Control Act’s spending caps when lawmakers and the White House resume negotiations over taxes and expenditures. “The bottom line, when we re-engage early next year, is I don’t want to bust the caps and I don’t want to raise spending, because we are in fact reducing spending, not as much as we need to, but it is a success,” McConnell said, adding that the sequester has lowered government spending “for two years in a row for the first time since right after the Korean War.” The GOP leader also criticized President Obama and congressional Democrats for pushing to raise taxes during previous budget talks. “Every discussion we’ve had about this in the past has had what I would call a ransom attached to it — a trillion-dollars in new tax revenues,” McConnell said. “We don’t have this problem because we tax too little in the country, we have it because we spend too much.”

So, excuse me but I am still paying attention to the men behind the curtains. What’s on your reading and blogging list today?

Thursday Reads: Crisis in Cyprus, The End of the “Creative Class” Dream, the Grand Betrayal, and Other News

Posted: March 21, 2013 | Author: | Filed under: Barack Obama, Foreign Affairs, morning reads, the blogosphere, U.S. Economy, U.S. Politics, Violence against women | Tags: , , , , , , , | 41 Comments

coffee break

Good Morning!!

There’s quite a bit of news on the Cyprus crisis this morning. But first, last night Joe Weisenthal posted this assessment of how bad things had already gotten: In Just Days A Modern Economy Has Been Set Back 50 Years, And It May Never Be The Same Again. That’s a quote from Ciaran O’Hagan of Société Générale in Paris. Weisenthal writes:

According to reports, Cyprus will try again tomorrow to cobble together some kind of bank bailout bill that can pass parliament.

Cyprus needs to raise another 5.8 billion euros, which it could do from some combination of deposit taxes, Russian money, and pension nationalization.

None of the options are good, but until it’s done, banks will likely have to remain closed, a situation that can’t go on much longer.

This is a stunning turn of events for a modern Eurozone nation.

This morning, the news broke that the European Central Bank (ECB) has given Cyprus an ultimatum. Bloomberg reports:

The European Central Bank said it will cut Cypriot banks off from emergency funds after March 25 unless the Mediterranean island agrees on a bailout with the European Union and International Monetary Fund.

“The Governing Council of the European Central Bank decided to maintain the current level of Emergency Liquidity Assistance, ELA, until Monday, 25 March 2013,” the Frankfurt- based ECB said in an e-mailed statement today. “Thereafter, ELA could only be considered if an EU/IMF program is in place that would ensure the solvency of the concerned banks.”

The Cypriot parliament this week rejected a proposed levy on bank deposits to raise 5.8 billion euros ($7.5 billion), which euro-area finance ministers backed as a condition for the country’s bailout. A bank holiday in Cyprus has been extended to March 25, giving policy makers until Monday to find a compromise to prevent a collapse of the country’s banks.

“With this statement, the ECB put even more pressure on European finance ministers and the Cypriot government to come up with a deal,” said Juergen Michels, chief euro-area economist at Citigroup Inc. in London. “But we’ll have to see whether they’ll actually follow through with their threat if there’s no deal by Monday and policy makers decide to further extend the bank holiday.”

Read the rest of this entry »

Tuesday Reads: A Mashup of Recent Stories I Liked

Posted: March 12, 2013 | Author: | Filed under: Crime, morning reads, U.S. Economy, U.S. Politics | Tags: , , , , , , , , , , , , , , , | 35 Comments

morning paper cat dog

Good Morning!!

Over the weekend, I came across this amazing story in The Daily Beast, and I just had to share it: An Auschwitz Survivor Searches for His Twin on Facebook. It’s the story of Menachem Bodner who was just four years old when the Nazi prison camp was liberated. He is now 72 and is now trying to find his twin brother whom he last saw when they were being used as experimental subjects by the infamous Josef Mengele.

It’s most likely that Menachem Bodner last saw his identical twin in 1945, in Dr. Josef Mengele’s gruesome Auschwitz laboratory. He was 4 then and doesn’t remember his time in the notorious death camp. But in the 68 years that have followed, Bodner says he’s “always” been certain he was one of a pair. He just didn’t have any proof until this past year. Now, he’s searching for Jeno, a man who probably looks just like him, and who has a distinctive “A-7734” tattoo on his forearm. And 1 million Facebook users are helping him look.

Mengele, known among prisoners as “the Angel of Death,” was deeply fascinated with twins and used them for research experiments in his macabre Auschwitz lab. Thankfully, Bodner, now 72, has no recollection of the cruelty he most certainly endured while undergoing experiments, though he can remember a sense of paralyzing fear. Unfortunately he also has few impressions of his family’s prewar life in a small town east of Munkacs, Hungary, which is now in the Ukraine. But despite the lack of memories from a war-marred childhood, Bodner says that throughout his life he’s felt a deep connection with his twin—and is positive he’s still alive and out there. But where?

Until last May, Bodner didn’t even know that his own name was once Elias Gottesmann. Now he knows that. And he knows for certain that he has a twin—thanks to the Nazis’ dogged, pathological documentation of their crimes. Ayana KimRon, a professional genealogist in Israel, found the evidence, clearly written in a record put together by the organization Candles, of twins who were “identified as having been liberated at Auschwitz or from a subcamp”:

A-7733, Gottesmann, Elias, 4
A-7734, Gottesmann, Jeno, 4

Incredible! As a result of his search, Bodner has already found family members that he never knew were looking for him, but his dream is to find his brother. What a story it would be if they could be reunited!

I don’t know if you have been following the latest episode in the ongoing battle between Joe Scarborough and Paul Krugman. Scarborough somehow got together with Jeffrey Sachs of The Earth Institute at Columbia University to publish an op-ed in the Washington Post last Friday: Deficits Do Matter. In the op-ed, they attacked Paul Krugman by setting up a series of straw men and then knocking them down–mainly the false claim that Krugman thinks deficits are never a problem for governments. Here’s the introductory paragraph:

Dick Cheney and Paul Krugman have declared from opposite sides of the ideological divide that deficits don’t matter, but they simply have it wrong. Reasonable liberals and conservatives can disagree on what role the federal government should play yet still believe that government should resume paying its way.

It has become part of Keynesian lore in recent years that public debt is essentially free, that we needn’t worry about its buildup and that we should devote all of our attention to short-term concerns since, as John Maynard Keynes wrote, “in the long run, we are all dead.” But that crude interpretation of Keynesian economics is deeply misguided; Keynes himself disagreed with it.

However, if you read Krugman piece that Sachs and Scarborough link to, you’ll see that it doesn’t say what they pretend it does. It says that deficits don’t matter in the short term, but it’s not true that they never matter. Krugman in the quoted column from March 2011:

Right now, deficits don’t matter — a point borne out by all the evidence. But there’s a school of thought — the modern monetary theory people — who say that deficits never matter, as long as you have your own currency.

I wish I could agree with that view — and it’s not a fight I especially want, since the clear and present policy danger is from the deficit peacocks of the right. But for the record, it’s just not right.

The key thing to remember is that current conditions — lots of excess capacity in the economy, and a liquidity trap in which short-term government debt carries a roughly zero interest rate — won’t always prevail. As long as those conditions DO prevail, it doesn’t matter how much the Fed increases the monetary base, and it therefore doesn’t matter how much of the deficit is monetized. But this too shall pass, and when it does, things will be very different.

I guess Sachs and Scarborough assumed their WaPo readers wouldn’t bother to click on the link. Anyway, Mark Thoma wrote an epic takedown of the Sachs-Scarborough op-ed at his Economist’s View blog: Crude Sachsism.

Frankly, I doubt that Scarborough had anything to do with writing the op-ed, and I think it would be really hilarious if someone would ask him to explain it on his show. Why is Scarborough so obsessed with proving Krugman wrong? As for Jeffrey Sachs, he is a follower of Milton Friedman and The Chicago School of Economics who is famous for his failed “Millennium Villages” project and his so-called “shock therapy” in Latin America, Russia, and Eastern Europe. Judge for yourself whether you want to buy into his neoliberal, modified supply-side arguments.

I know I’m kind of a weirdo, but I had a blast reading all this stuff over the weekend, including this post by Ryan Coooper (filling in for Ed Kilgore at The Washington Monthly) questioning why Sachs doesn’t even know what was in the stimulus.

Jeff Sachs has long been known as the celebrity-hobnobbing economist with the seriously flawed “shock therapy” plan for economic development. Lately he’s taken a weird turn in the public debate, coauthoring an op-ed piece with Joe Scarborough of all people, attacking Paul Krugman.

Today he’s back with one of the most bizarre pieces of economic analysis I’ve seen, arguing among other things that 1) the stimulus was too focused on short-term stuff like tax cuts which 2) aren’t effective stimulus anyway (huh?) and 3) should have had much more long-term investment.

Wrong again! Read all about it at the link.

The back and forth quieted down yesterday, but today Cooper–who is filling in for Ed Kilgore at The Washington Monthly–brought it up again with this post: How Does Jeffrey Sachs Explain The Great Recession?

I need to read it carefully and follow the links and responses to today–my idea of fun! I guess it’s partly the psychologist in me–I’m fascinated by these human interactions and the verbal battles over important issues of the day.

Continuing the economics theme, Alex Pareene has a great piece at Salon on The competitive advantage of deficit hacks. It’s all about how the media helps the false Village memes and tries to marginalize people like Paul Krugman who actually know something about economics. The gist:

I think a lot about contemporary political debates makes a great deal more sense when you realize that hacks, especially hacks shilling for awful ideas, have a competitive advantage over non-hacks: They do not care if they constantly repeat themselves, even if what they are constantly repeating is wrong.

For a writer or pundit who actually feels some sort of responsibility to inform and/or entertain his or her readers, writing the same damn thing over and over again seems wrong (it is also boring). But bad ideas are constantly being repeated by people who feel absolutely no shame about saying the same things over and over and over again. Indeed, “shamelessness” is in general a defining characteristic of hacks. Also, frequently, people are being paid to repeat the same awful ideas over and over again, and unfortunately usually there’s more money to be made repeating bad ideas than good ones. (Hence: Lanny Davis.)

Arguably, American conservatives are better at sticking to their pet causes in general, as liberals move from fight to fight. Look at how contraception “suddenly” became a matter of national public debate last year, years after liberals thought it a well-settled question. Or look at how long the movement spent trying to roll back the majority of the New Deal, a project that continues to this day!

And on the question of the deficit and the “grand bargain,” Pete Peterson and a few others have spent hundreds of millions of dollars and decades of their lives making the exact same argument, and setting up organizations that pay others to make the exact same argument, until a majority of Beltway centrists internalized the argument and began making it themselves, over and over again. When it comes to centrist pundits, the unsophisticated brainwashing technique that has utterly failed to move the public at large over the last 25 years has worked perfectly. (Because centrist pundits are simple, credulous people, by and large, and also because they will not rely on “entitlements” to survive, when they retire from their very well-compensated jobs.)

Plus— another must read from Alex Pareene: The undead, unnecessary, unhelpful Grand Bargain.

Washington has Grand Bargain fever, again. Thanks to the sequestration, Republican government-shrinking mania and Barack Obama’s apparently sincere desire to get some sort of huge long-term debt deal done, the Grand Bargain is looking more possible than at any point since the heady days of the National Commission on Fiscal Responsibility.

For some reason, the options for dealing with sequestration — a self-inflicted made-up austerity crisis — are being purposefully and pointlessly limited to a) spending cuts, either those in sequestration or different ones, or b) spending cuts and tax increases. “Let’s just not do this, everyone” is rarely presented as a viable option. Instead, the single best end result, according to lots of pundits, Democrats and even Republicans, is tthe Mythical Grand Bargain.

This is awful news, for most people. A “grand bargain” is not going to be good. But after Barack Obama had fancy dinners with some Republicans last week, everyone is again hopeful. The president is hopeful. John Boehner is hopeful. David Gergen is probably hopeful. They can all taste the Bargain. Ooh, it’ll be so great when we get that Bargain!

Read it, and you’ll laugh and cry at the same time!

Now a few more reads that tickled my fancy–in link dump fashion:

LA Times: Harvard faculty outraged after administration spies on emails

WBZ Boston: Harvard University Issues Explanation Of Resident Deans Email Search

The Guardian: World’s top 100 universities 2013: their reputations ranked by Times Higher Education

The Daily Mail: Meet the former Harvard University admin assistant who built up a multimillion-dollar empire… selling sex toys

Cleveland Plain Dealer: Steubenville rape trial will center on issue of consent

New York Daily News: Mike Bloomberg’s supersized ego does in planned soda ban

Now it’s your turn. What’s on your reading list today? Please share your links in the comments.

Have a fabulous Tuesday!!

Gearing up for the Fight

Posted: November 16, 2012 | Author: | Filed under: Medicare, Social Security | Tags: , , , | 30 Comments

I don’t think there’s a person in the country that doesn’t know that many folks are gearing up to remove our earned benefits.  We should gear up to fight them.

I think we need to adopt “earned benefits” as description for Social Security and Medicare.  For some reason, entitlements has become one of those words that’s been co-opted to mean hand-outs instead of the true meaning which is that we are entitled to these benefits because we paid for them all of our working days. Yesterday, Bernie Sanders gave a speech that made it clear what our priorities should be when it comes to any bargain to decrease our debt and deficit.

Sanders said:

Deficit reduction is a serious issue, but it must be done in a way that is fair. We must not balance the budget on the backs of the elderly, the sick, the children or the poor.

We need to make it clear to people that Social Security has nothing to do with the deficit.   Social Security is not going bankrupt either.

Right now, Social Security does face a long-term funding gap, mostly due to the happy fact that we will be living longer, healthier lives in the future. The gap is quite small, does not appear for 36 years, and if the economy does even a little bit better than expected, will not appear at all. But it may appear. If so, we will have to tweak the system a bit, just as we have in the past. We could take longer life expectancies into account by raising the retirement age. Or, we could levy Social Security taxes on a person’s entire salary, not just the first $84,900 as we do currently. Or, as a last resort, we could very slightly raise Social Security taxes, by a percentage point or so. In any case, these fixes impose a much smaller cost on the typical American worker than exploding health care costs or the continued stagnation of wages — two real, and most importantly, current problems that ought to loom much larger on our national radar screen.

I think the Paul Krugman column today made clear that a lot of myths and memes that we’ll hear in the next few months about our fiscal problems are just myths and memes.  Krugman argues against raising age eligibility for either Medicare or Social Security.  The people that need the benefits the most and the retirement age have likely done very physical work.

And right now the most dangerous zombie is probably the claim that rising life expectancy justifies a rise in both the Social Security retirement age and the age of eligibility for Medicare. Even some Democrats — including, according to reports, the president — have seemed susceptible to this argument. But it’s a cruel, foolish idea — cruel in the case of Social Security, foolish in the case of Medicare — and we shouldn’t let it eat our brains.

First of all, you need to understand that while life expectancy at birth has gone up a lot, that’s not relevant to this issue; what matters is life expectancy for those at or near retirement age. When, to take one example, Alan Simpson — the co-chairman of President Obama’s deficit commission — declared that Social Security was “never intended as a retirement program” because life expectancy when it was founded was only 63, he was displaying his ignorance. Even in 1940, Americans who made it to age 65 generally had many years left.

Now, life expectancy at age 65 has risen, too. But the rise has been very uneven since the 1970s, with only the relatively affluent and well-educated seeing large gains. Bear in mind, too, that the full retirement age has already gone up to 66 and is scheduled to rise to 67 under current law.

This means that any further rise in the retirement age would be a harsh blow to Americans in the bottom half of the income distribution, who aren’t living much longer, and who, in many cases, have jobs requiring physical effort that’s difficult even for healthy seniors. And these are precisely the people who depend most on Social Security.

So any rise in the Social Security retirement age would, as I said, be cruel, hurting the most vulnerable Americans. And this cruelty would be gratuitous: While the United States does have a long-run budget problem, Social Security is not a major factor in that problem.

Medicare, on the other hand, is a big budget problem. But raising the eligibility age, which means forcing seniors to seek private insurance, is no way to deal with that problem.

It’s true that thanks to Obamacare, seniors should actually be able to get insurance even without Medicare. (Although, what happens if a number of states block the expansion of Medicaid that’s a crucial piece of the program?) But let’s be clear: Government insurance via Medicare is better and more cost-effective than private insurance.

There are many more things that need to be done to ensure our fiscal health.  Messing with Social Security is not one of them.  Medicare has issues but most of them could be dealt with by simply allowing the plan to bargain for drug prices.  The Bush deal with big Pharma while providing the part B benefits is the major source of Medicare problems.  Our federal deficit is primarily the result of our two decade long wars, reckless tax cuts, subsidies to folks that don’t need them, and reduced tax receipts/increased expenditures from our deep recession.

Here’s an example of something that could help with the long term health of social security.  Lift the cap.  At the very least, the cap should be subjected to an increase that’s adjusted for inflation just like the benefits.

Social Security is not in danger of becoming insolvent any time soon. According to the program’s actuaries, without any changes, Social Security will be able to pay out full benefits until 2033. And there’s reason to doubt that problems will arise even 21 years from now. As Jared Bernstein noted when the latest projections came out, the expected date when the Social Security trust fund will be exhausted has varied wildly over the past few decades.

Yet despite its medium-run sustainability, many deficit reduction plans target the program for cuts. For example, Bowles-Simpson introduces means-testing and raises payroll taxes for high earners, but also cuts benefits across the board by adopting a less generous inflation measure, known as “chained CPI,” and raises both the minimum age where retirees can claim benefits and the age when they can claim full benefits.

As Nobel laureate Peter Diamond has explained, the latter change is hugely regressive, primarily targeting poor workers in physically demanding occupations. Domenici-Rivlin includes the inflation measure cut, means-testing and payroll tax increase, but leaves out the regressive retirement age increase.

But if one wants to make the program solvent indefinitely without endangering vulnerable seniors, there are options. A new bill from Sen. Mark Begich (D-Alaska), the Protecting and Preserving Social Security Act, provides one method.

The Begich bill would lift the current payroll tax cap, which exempts wages in excess of a certain amount ($110,100 this year) from the tax. In turn, it would give high earners, who would pay more, additional benefits upon retirement, just as benefits increase as wages do for workers below the cap.

According to the Congressional Research Service, a change like that would almost entirely wipe out the program’s long-run actuarial imbalance. Specifically, it would eliminate 95 percent of the shortfall, meaning that a mild increase in the payroll tax rate from 12.4 percent to 12.5 percent would be enough to cover the tiny remaining gap. And without any changes at all, the program would be able to pay out full benefits until after 2085. Indeed, the exhaustion date for the trust fund following such a change is so far in the future that CRS didn’t even calculate it.

I’ve always thought that letting folks pay for the privilege of opting into Medicare sooner would help with the Medicare plan. Also, separating the survivor benefits and disabled benefits and charging separately for this coverage would also help secure social security as it was intended to be.   Anyway, there are many things to do without hacking away at all the benefits that people have paid for a program that shouldn’t be changed due to myths and memes.  Plus, there’s the entire republican agenda of transferring every program–no matter how cost ineffective–to their cronies in the name of their all might gawd Privatization.

We should probably gear up for a fight.  It may be necessary to ensure that our Congress critterz understand the importance of these social contracts and  that they realize these are earned benefits and not just hand-outs.

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