Tuesday Reads: Cultural Appropriation Edition

Good Morning!!

First, a quick follow-up: I’ve been writing about the delay of stimulus payments to 30 million seniors, disabled people, veterans, railroad pensioners. Last Thursday, the Social Security Administration finally sent information to enable the IRS to send out the direct deposits/checks, but there’s still no information available on when these vulnerable Americans will receive the much needed assistance.

Newsweek tried to get some answers, but hit a brick wall: SSI Stimulus Check Update as IRS Stays Silent Over Payments For Social Security Recipients.

Many recipients of Supplemental Security Income (SSI) and other federal benefits are still waiting to receive their stimulus fund. The Internal Revenue Service has yet to announce a payment date, as of Tuesday….

On March 25, the SSA provided the Internal Revenue Service (IRS) with the paperwork needed for stimulus payments to be issued to federal benefit recipients following pressure from the House Ways and Means Committee. The IRS has yet to respond to Newsweek‘s requests for a comment since the SSA sent the required paperwork.

The SSA website also currently states that “the IRS decided to pay EIPs [Economic Impact Payments] first only to people who filed a 2020 or 2019 tax return, and to people who used the IRS’ Non-Filer Tool to receive a previous EIP. Some Social Security beneficiaries may have received a recent EIP if they filed a tax return with the IRS.”

People who were too poor to file a tax return have been left twisting in the wind. They are advised to use the “check my payment” link at the IRS, but when they do, they are told there is no information available.

Asked whether it had received any information on a stimulus payment date for federal benefit recipients, a spokesperson for NACHA (National Automated Clearing House Association), which manages the ACH Network, the national automated clearing house for electronic funds transfers, told Newsweek this Monday: “We haven’t gotten anything.”

Newsweek has contacted the IRS, the U.S. Treasury and the U.S. Bureau of the Fiscal Service for comment.

The SSA website currently advises: “Please refer to the IRS’ website for the latest information about economic impact payments (EIP). Please do not contact the Social Security Administration (SSA) with questions about EIPs. Our representatives do not have information to answer your EIP questions. The IRS, not SSA, processes all EIPs.”

A spokesperson for the SSA told Newsweek on March 26: “As you may already know, many Social Security beneficiaries have already received their EIPs. The final files we sent to IRS yesterday morning [Thursday] will address those recipients who don’t normally file a tax return with the IRS.”

Now for my main topic: Cultural Appropriation

Wikipedia: Cultural appropriation is the adoption of an element or elements of one culture or identity by members of another culture or identity. This can be controversial when members of a dominant culture appropriate from disadvantaged minority cultures.

I seldom watch late night entertainment programs, but yesterday there was a strong reaction to a Tonight Show segment. A white TikTok “influencer,” Addison Rae, appeared on the Jimmy Kimmel show to perform several dance routines. The problem is that she copied them from Black women on TicToc and failed to credit them or the Black artists who performed the songs she danced to.

From the LA Times story: Addison Rae taught Jimmy Fallon TikTok dances, but Twitter remembers who created them.

Many of TikTok’s viral dance challenges were started by Black creators, but you wouldn’t know that by watching Friday’s episode of “The Tonight Show,” which saw one of the app’s biggest stars, Addison Rae, perform several dances without crediting their choreographers.

What was intended as a fun moment between Rae and host Jimmy Fallon — who are both white — backfired over the weekend as Twitter users demanded recognition for the people whose choreography was featured on the show.

“Stealing from black entertainers and having white ‘creators’ regurgitate it to the masses is american history 101,” one person tweeted after Fallon shared a clip of Rae busting a move to eight different songs.

“I think Black creators should just stop creating content for like a good 6 months and just observe what these people come up with,” wrote another in a tweet that had amassed more than 261,000 likes….

Included in the TikTok dance compilation were:

  • “Do It Again” (recorded by Pia Mia, choreographed by @noahschnapp)
  • “Savage Love” (recorded and choreographed by @jasonderulo)
  • “Corvette Corvette” (recorded by Popp Hunna, choreographed by @yvnggprince)
  • “Laffy Taffy” (recorded by D4L, choreographed by @flyboyfu)
  • “Savage” (recorded by Megan Thee Stallion, choreographed by @keke.janjah)
  • “Blinding Lights” (recorded by the Weeknd, choreographed by @macdaddyz)
  • “Up” (recorded by Cardi B, choreographed by @theemyanicole)
  • “Fergalicious” (recorded by Fergie and will.i.am, choreographed by @thegilberttwins).

(The choreographers’ names have been shared by Twitter users and confirmed by Buzzfeed.)

Here’s a side-by-side comparison of Rae’s performance to Cardi B’s “Up” along with the original performance by TheMayaNicole. See what you think.

More from Popsugar: The Tonight Show’s Addison Rae Fumble Is an Unfortunate Reflection of Our Creator Culture.

If you want to see a TikTok dance skit, why not ask the original artists to participate? That’s a question The Tonight Show Starring Jimmy Fallon and Addison Rae face after March 26th’s episode. The well-known creator walked Fallon through a few of the app’s most popular choreography in a sketch, similar to a video released with Charli D’Amelio last year. Quickly after airing, the clip faced criticism as viewers wondered why the creatives who actually created the dances didn’t get screen time — or at the very least, proper credit.

This controversy is not new for Rae, who faced similar pushback after she and D’Amelio became the face of a “Renegade” dance routine, which was originally created by Jalaiah Harmon. Intentional or not, Rae and D’Amelio’s names were synonymous with choreography they had no hand in. They went as far as to perform the dance at a 2020 NBA All Star game without Harmon. Harmon eventually got her dues, but only after publicly reclaiming the viral dance. Rae and D’Amelo need only whisper and their combined 100+ million followers would come running, so why did Harmon practically need a megaphone to get her credit? Her experience is a disappointing reflection of how art is co-opted on social media, especially from Black creatives.

You can’t separate Rae’s success from the work of Black TikTokers. Some of her most viewed videos are built on their choreography, like the “Savage” routine originated by Keara Wilson. (Wilson told POPSUGAR she doesn’t wish any backlash against Rae because she knows “how toxic the internet can be.” She said, “Yes of course it’s always nice to be credited but just having my dance on the show is an honor in itself.”)

As Twitter user @blackamazon wrote, “This is why I bang on EVERYBODY about the economics and race of social media. ‘Tik tok dances’ the names of the artists not there. The actual choreographers not there. She’s on national television but where are the Black kids who actually made these.” Another user, @868nathan, wrote, “The fact that Addison Rae is championed for ‘Tik Tok Dances’ whilst the black creatives that made them never get the same platform will never sit right with me.”

This reminds me of the days when white recording artists like Pat Boone released pathetic cover versions of songs by Black musicians like Little Richard. The good news in those days was that people who heard the covers sought out the originals and eventually the Black artists became well known and successful. The same thing happened again in the 1960s with British and American bands who covered performances by Black blues musicians.

Futurity (Feb. 3, 2017): How the 1950s Made Pat Boone a Rock Star.

While some early rock ‘n’ roll acts receive little critical respect, historically speaking, these same musicians and singers played an important role in bridging musical styles and bringing cultures together, writes Aquila, professor emeritus of history and American studies at Penn State, in his book, Let’s Rock! How 1950s America Created Elvis and the Rock & Roll Craze (Rowman & Littlefield, 2017).

“I spend a lot of time discussing Pat Boone and other pop rockers in the book. Boone refers to himself not as the father of rock ‘n’ roll, but as the midwife of rock ‘n’ roll,” says Aquila.

“What he means by this is that his versions of Little Richard’s songs may not be as good as Little Richard’s originals, but Little Richard couldn’t get played on mainstream radio stations back in the ’50s, due to racism and other reasons. But, after the kids listened to Boone’s music, they tended to go on and want the real thing.”

Boone spent most of his early career covering rhythm-and-blues songs, like Richard’s “Tutti Frutti.” Boone’s versions, however, were influenced by pop styles and standards that were tamer and more familiar to white audiences of the time. He also sanitized Fats Domino’s “Ain’t That a Shame,” for his white audience’s ears and, apparently, their grammar. He tried, for instance, to change the title of the song to “Isn’t That a Shame.”

While many music critics now consider this artistic theft or cultural appropriation, Aquila says that some black artists at the time appreciated Boone’s cover songs.

At a concert, for example, Aquila writes that Domino introduced Boone to the audience and, pointing to one of his diamond rings, added that Boone’s version of “Ain’t That a Shame” bought him that ring.

It’s still pathetic that our white-dominated culture made this happen and even more pathetic that it is still happening on social media platforms like TikTok and mainstream TV programs.

Some politics news, links only

Buzzfeed: US Cases Of COVID-19 Are Rising Again, Sparking Fears Of A Fourth Major Surge.

Josh Rogin at The Washington Post: Opinion: The WHO covid report is fatally flawed, and a real investigation has yet to take place.

Aaron Rupar at Vox: Birx rightly said most US Covid-19 deaths were preventable. But she won’t acknowledge her complicity.

Michael Gerson at The Washington Post: Opinion: The GOP is facing a sickness deeper than the coronavirus.

Raw Story: Trump lashes out at Fauci and Birx in bizarre press release issued from Mar-a-Lago.

The Washington Post: New accounts detail how New York health officials were told to prioritize coronavirus testing of people connected to Andrew Cuomo.

The Guardian: Asian American woman, 65, attacked in New York as witnesses stood by.

The Guardian: Sherry Vill is latest to accuse Andrew Cuomo of sexual misconduct.

That’s it for me today. What’s on your mind?


Lazy Caturday Reads

Bette Davis

Good Morning!!

I’m not an economist, but I’m going to post some economic news today. Dakinikat is an economist, and maybe she will weigh in on what’s happening.

Talks between Democratic Congressional leaders and Trump administration representatives have broken down.

CNN: Stimulus talks break down on Capitol Hill as negotiators walk away without a deal.

Negotiations over the next stimulus package intended to bolster the economy and help struggling Americans pay their bills have stalled on Capitol Hill with Democrats and Trump administration officials walking away after talks broke down on Friday and devolved into partisan finger-pointing.

At a hastily scheduled news conference at his Bedminster, New Jersey, golf club Friday evening, President Donald Trump laid out the executive actions he said he would pursue if Congress does not reach a deal.

No additional discussions are planned after nearly two weeks of daily meetings, and lead White House negotiators Mark Meadows and Treasury Secretary Steve Mnuchin said they were recommending Trump move ahead with a series of executive orders.

Trump said Friday the actions would include a payroll tax deferment, extending unemployment benefits, extending an eviction moratorium and deferring student loan payments and forgiving their interest.

It’s not at all clear to me that any of this would be legal, especially cutting the payroll tax, which would starve Social Security and Medicare. Trump is obviously dying to do that. Back to the CNN story:

Cher

Trump said “they’re talking about” deferring the payroll tax until the end of the year. “And I can extend it at a certain period … and it will be retroactive until July 1,” he said. “I’m going to enhance unemployment benefits through the end of the year,” he added, without specifying any amount.

But the executive orders are expected to meet fierce resistance from Democrats who plan to challenge them in court. Democrats warn that executive action taken will be insufficient to address the extent of the economic and public health crisis faced by Americans during the pandemic.

CNN: Coronavirus has already dealt a blow to Social Security’s finances. Trump’s payroll tax holiday could make it worse.

This isn’t a far-off problem that retirees’ grandchildren would face. If this economic downturn is as bad as the Great Recession a decade ago, then the Social Security trust funds could run out of money in 2029, according to the Bipartisan Policy Center. After that, beneficiaries could see a 31% cut in retirement payments.

The program’s trustees had projected earlier this year that the trust funds would be depleted in 2035, but that did not take the coronavirus pandemic into account.

It would be the first time the estimated insolvency date was within a decade since the crisis of the 1980s, which prompted several changes, including raising the retirement age, said Shai Akabas, the center’s director of economy policy.

“An already urgent situation has become even more pressing,” Akabas said, noting the severe drop in payroll tax revenue. “We expect that that trend is going to continue for many years as it takes the labor market to recover.”

Donna Reed

From Business Insider: Trump implementing a payroll tax cut through executive order would blow a hole in Social Security and Medicare’s finances, economists warn.

“Trump’s scheme would weaken the Social Security and Medicare trust funds by diverting the revenue from the employee portion of Social Security and Medicare taxes, and potentially the employer’s share of Medicare taxes, from the programs’ trust funds,” the memo from the Center for American Progress said.

Earlier this year, Congress deferred the employer-portion of the Social Security tax (6.2%) through 2022 under the CARES Act. But they replaced the lost money with an infusion of general Treasury funds.

Trump, the memo said, lacks the authority to appropriate funds, which is Congress’s purview.

Many economists say that implementing a payroll tax cut through an executive order wouldn’t lead to a bump in wages for most workers, since the executive branch can only defer tax payments up to a year and not forgive them. Wiping out the payment requires Congress to act.

Legally, employers remain on the hook for any delayed payment. Firms would likely keep the money since they fear being saddled with a hefty tax bill if Congress didn’t move to forgive it.

Obviously, the fact that this would be illegal won’t stop Trump from trying it.

Paul Krugman weighs in on the economic crisis we face: Coming Next: The Greater Recession. Krugman argues that without a second stimulus package being enacted very soon the economy is going to get much worse.

I’m not sure how many people realize just how much deeper the coronavirus recession of 2020 could have been. Obviously it was terrible: Employment plunged, and real G.D.P. fell by around 10 percent. Almost all of that, however, reflected the direct effects of the pandemic, which forced much of the economy into lockdown.

Ava Gardner, 1946

What didn’t happen was a major second round of job losses driven by plunging consumer demand. Millions of workers lost their regular incomes; without federal aid, they would have been forced to slash spending, causing millions more to lose their jobs. Luckily Congress stepped up to the plate with special aid to the unemployed, which sustained consumer spending and kept the nonquarantined parts of the economy afloat.

Furthermore, evidence from austerity policies a decade ago suggests a substantial “multiplier” effect, as spending cuts lead to falling incomes, leading to further spending cuts.

Put it all together and the expiration of emergency aid could produce a 4 percent to 5 percent fall in G.D.P. But wait, there’s more. States and cities are in dire straits and are already planning harsh spending cuts; but Republicans refuse to provide aid, with Trump insisting, falsely, that local fiscal crises have nothing to do with Covid-19.

Bear in mind that the coronavirus itself — a shock that came out of the blue, though the United States mishandled it terribly — reduced G.D.P. by “only” around 10 percent. What we’re looking at now may be another shock, a sort of economic second wave, almost as severe in monetary terms as the first. And unlike the pandemic, this shock will be entirely self-generated, brought on by the fecklessness of President Trump and — let’s give credit where it’s due — Mitch McConnell, the Senate majority leader.

In other news, Chief Justice John Roberts is showing his true colors when it comes to abortion.

Dahlia Lithwick and Mark Joseph Stern at Slate Magazine: John Roberts’ Stealth Attack on Abortion Rights Just Paid Off.

The Supreme Court’s recent decision in June Medical v. Russo was hailed by many liberal court watchers as a win for reproductive rights, as the court declined to overturn Roe v. Wade and formally eliminate the right to an abortion. On Friday, however, a federal appeals court ruled that June Medical significantly narrowed the constitutional right to abortion access. The 8th U.S. Circuit Court of Appeals panel swept away an injunction that had blocked Arkansas from enforcing a slew of abortion restrictions, including a requirement that patients pregnant as a result of rape notify their rapists before terminating their pregnancy. The appellate court’s decision confirms that Chief Justice John Roberts’ controlling opinion in June Medical will serve as a tool to eviscerate abortion rights. Those who briefly heralded him as a champion of reproductive freedom were too caught up in the halftime show to see the game.

Olivia de Havilland

Friday’s ruling in Hopkins v. Jegley greenlights four Arkansas regulations passed in 2017. The first of these laws requires clinics to report the names of abortion patients under 18 to local law enforcement. These clinics must then preserve the fetal tissue and treat it like criminal evidence. The second law forces abortion providers to spend “reasonable time and effort” acquiring a patient’s medical records for her “entire pregnancy history” before performing the abortion. The third law grants equal rights over fetal remains to both partners, with no exception in cases of rape. A patient must notify her partner before the abortion and ask which method of disposal he prefers. If both partners are minors, the patient’s parents get to decide how fetal remains are disposed of. If the patient is a minor but her partner is an adult, then he—not the patient—makes the choice. These rules effectively prohibit medication abortion, which occurs at home, where the provider cannot control the disposal of fetal remains. The fourth and final law bans the safest and most common procedure for second-trimester abortions.

Abortion rights advocates challenged this legislation, arguing that they impose an unconstitutional burden on abortion access. A federal district court agreed in 2017, and blocked the new regulations. In Friday’s decision, three Republican-appointed judges on the 8th Circuit cleared away that injunction. The lower court had analyzed the laws under Whole Woman’s Health v. Hellerstedt, the 2016 Supreme Court decision that required courts to weigh the medical benefits of an abortion restriction against its burdens. But the Supreme Court’s decision last month in June Medical, the 8th Circuit wrote, overturned that standard.

One more story, just for laughs: Jerry Falwell Jr. was forced out of his job as president of Liberty University because of that photo he posted of himself with his pants unzipped and his arm around a woman with her pants also unzipped. Politico: Falwell placed on ‘indefinite leave’ from Liberty University.

Jerry Falwell Jr., one of President Donald Trump’s leading evangelical supporters, has agreed to take “an indefinite leave of absence” from his role as president of Liberty University after the release of a viral photo that showed him vacationing on a yacht with his pants unzipped, holding a drink, and with his arm around a woman.

Lauren Bacall

“The Executive Committee of Liberty University’s Board of Trustees, acting on behalf of the full Board, met today and requested that Jerry Falwell, Jr. take an indefinite leave of absence from his roles as President and Chancellor of Liberty University, to which he has agreed, effective immediately,” the university said in a statement on Friday.

The decision came a day after a top House Republican called on Falwell to resign as president of the large Christian school. Rep. Mark Walker of North Carolina, the vice chair of the House Republican Conference and a former pastor, said that Falwell’s “ongoing behavior is appalling.”

Falwell earlier in the week was widely condemned, including by some conservatives, for posting and then deleting the yacht vacation photo. Liberty University has a strict code of conduct for students that, among other things, prohibits students from having sexual relations outside of a “biblically-ordained” marriage and consuming media with lewd lyrics, sexual content and nudity.

At Slate, Ruth Graham explains Why That Falwell Jr. Yacht Photo Was the Final Straw.

Students on Liberty’s campus are forbidden from drinking alcohol, and are instructed to dress modestly. A poster on Reddit compiled Falwell Jr.’s potential violations in the yacht photograph and an accompanying video, and calculated that a student captured in the same scene could have accrued more than $9,000 in school fines and 900 hours of required service, and possible expulsion.

Faculty and alumni who have been critical of the school’s direction under Falwell Jr. were both shocked and gratified by the news of his leave of absence. “For at least a decade, Liberty’s faculty have labored under Falwell’s increasingly autocratic leadership and been shamed by his public behavior besides,” said Marybeth Davis Baggett, who taught English at Liberty for 17 years and resigned this spring after publishing an op-ed calling for Falwell Jr.’s removal based on his handling of the coronavirus crisis. “One man cannot act this way without many enablers, and any meaningful reform of the school will require a thorough and brutally honest inquiry into the LU culture.”

Jane Fonda, photo by Genevieve Naylor, 1962

Falwell Jr., a businessman with a law degree and no pastoral experience, took over the college when his father died in 2007. He has built the school into a sports powerhouse with a campus filled with luxury amenities, and conservative activists and politicians regularly speak there. The school now boasts more than 15,000 residential students, and more than 100,000 students online.

But Liberty has also been under almost constant national scrutiny since Falwell Jr. endorsed Donald Trump in early 2016, months earlier than other white evangelical leaders embraced the crude casino magnate’s candidacy. Falwell Jr. began 2020 by calling for parts of Virginia to secede from the state and join West Virginia. As the coronavirus crisis encroached, Falwell Jr. initially dismissed it as “hype,” and called a Liberty parent who questioned him on Twitter a “dummy.” He was then criticized for welcoming back any students who wanted to return to campus after spring break. (Fewer than 2,000 of 15,000 residential students ultimately returned, and Liberty has avoided any outbreaks.) In May, Falwell Jr. tweeted a racist image in an attempt to needle Virginia governor Ralph Northam. He eventually deleted the tweet and apologized, but multiple Black employees publicly quit their jobs soon afterward; several high-profile Black athletes also departed. None of these media dust-ups seemed to dent Falwell Jr.’s favorability in the eyes of his hand-picked board of trustees.

There’s much more at the link if you’re interested.

So everything is still FUBAR, but as Dakinikat wrote yesterday, we can still be kind to ourselves and support each other through these terrifying times. As I learned in my recovery from alcoholism, it always helps to live one day at a time. We’re still here, and there’s still a chance we can rid ourselves of Trump and somehow hold onto and rebuild our democracy.


Republicans Hate Government Programs that Work because they Prove them Wrong

Elderly-Pensioners-I’m always bemused by conversations with government-hating Republicans because the assumption is that the private sector always does it better and government programs aren’t–by definition–cost or service efficient.   As you know, I’m an economist by training.  This puts me in the category of people that look specifically for things that minimize costs and maximize output because economics is chiefly concerned with helping society allocate scarce resources to the most efficient use.  So, I examine each product or service and look at the various characteristics and look for signs of market vitality or market failure.

It becomes obvious fairly quickly that the government is actually best at doing some things and that in some markets, the government must interfere to guarantee an efficient outcome.  This totally goes against the ideological bent of those that just want to drown government in their golden bath tubs.  This is because they’re really not looking for the best outcomes for the market or for the society.  They’re looking to set up a zero-sum game where they get as much as possible because most of them have been set up into positions where they can do so through no attributes of their own.  This means that others get less by no fault of their own which goes without consideration. No one also discusses the aspect that it comes from “no fault of their own” because it goes against the “these people are weak and dependent” canard that the advantaged like to push.  Most so-called ‘free-market champions’ don’t like efficient, competitive markets because these markets produce efficient outcomes.  The advantaged really prefer markets that they can game so they get more than an efficient market would allocate.

I’ve spent some time in the past describing situations where it’s really impossible for the market to work without some government interference.  Usually, these markets are full of risks like  information asymmetry and moral hazard.  Actually, I think most of you recognize those terms because I use them so much.  Essentially, any market can be gamed if the demand or supply of that market exhibits pretty specific characteristics.  We’ve known these characteristics for a very long time.  They are no secret.  The markets that function the least efficiently when left alone are markets where the pricing mechanism doesn’t work because it’s for a good or service that is hard to price. Many times there’s the risk of unknown or hidden information where there are a lot of third parties that step in to provide expert information because the buyers can’t navigate the markets by themselves.

Any market where there are information brokers or ‘insurance’ or ‘maintenance’ plans usually indicates a good or a service where the buyers are in a weak position of knowing what’s going on and have to pay others to negotiate the risk for them. This also makes them vulnerable to scams. Financial markets are rife with that kind of situation.  So are markets where it’s hard to get the service or good because it’s so pricey, rare, or technical and not many people can afford it.  Some of the things that many countries offer through government provision are health insurance or service, education and scientific research, public safety, and old age and disability insurance.  We’ve found–through careful study–that government provision of many of these things is cheapest and most efficient because placing every one in one market eliminates these risks.  These programs have come under increasing attack in the US by the current nuts in the Republican Party and a bunch of sold-out Democrats. That’s because there are profits to be made from re-introducing the risk into the market.

The attacks on government provision are never based on the efficacy of the programs themselves.  Almost every one can see that programs like Soup_Kitchens_2Head Start and Social Security do exactly what they’re supposed to do.  In most places–including the states where I grew up–public education works so well that the demand for private education is fairly limited.  But, rather than look at what’s right with the public schools in Minnesota or Nebraska or North Dakota, Louisiana Governor Jindal turns to a private providers.  We’ve had that now for about 7 years and the school district in New Orleans filled with private charters has no better outcomes than it did before privatization.  The experiment is already shown to be failing but still, the push is on. Similarly, if you would turn retirement funds completely over to Wall Street, chances are you’d have the same kinds of miserable failures that characterize most 401K plans. One of the biggest problems is fee churning where people pay exorbitant fees that drain their returns and principle despite fund performance. Such is profit-driven third party provision.

So, I could spend some more virtual ink on the documented failures of  these many privatization schemes for goods and services where the academic studies document the failures and the press and the politicians ignore the stylized facts.  Instead, I want to share Josh Barro’s excellent article explaining why we should be expanding Social Security--one of these highly successful programs–rather than quietly watch the program be strangled by greedy ideologues. He’s provided wonky graphs and numbers.  I’m showing you photos of elderly poverty during the Great Depression.  Elder poverty was vast at that time.  Social Security changed that.  So, why strangle something that works so well?  Take a look at those pictures because if these folks get away with dismantling the program, those situations will return.  What kind of burden will that leave to our children or will they just gently step over all the sick and dying old people in the streets who haven’t been taken in by their still struggling relatives?

With everyone in Washington experiencing sea-bass-induced euphoria, we’re talking again about a “grand bargain” to replace the sequestration and shrink the federal budget deficit. And that means we’re talking about using the chained consumer-price index, a lower and more accurate inflation measure, to modestly raise taxes and cut Social Security benefits over time.

Back in December, I wrote that applying chained CPI to Social Security is the wrong solution to our budget problems: It’s just a way of dressingiYhcYKXlJ1gs up a cut to retirement benefits at a time when retirement insecurity is rising. Despite its problems, Social Security is the best-functioning component of the U.S.’s retirement-saving system. Instead of cutting, the federal government should be expanding its role in retirement saving.

I’m always struck when people talk about Social Security as “just” an insurance program, when it’s in fact the most important retirement-saving vehicle. The chart below, adapted from a 2012 paper by Boston College Professor Alicia Munnell, shows the financial situation of a “typical” pre-retirement household. These are the mean holdings of a household in the middle net worth decile among households headed by people age 55 to 64.

Okay, I had to give into my inner wonk and put in one graph.  As you can see, most older Americans are or will be highly reliant on their Social Security Savings.  I would also like to remind a few people that folks of my age were told if we went along and paid all of our working incomes into Ronald Reagan’s big FICA tax increase, our Social Security benefit would be safe. So, how does it feel to watch these folks ready and able to pull the rug out from under those folks especially after most of their investments and home prices have not really recovered since the Great Recession of 2007.

Keep in mind, that most folks nearing or at retirement rely on bonds which are paying nearly historically low rates of interest and will continue to do so for some time because of Fed policy to keep interest rates low.  You are told to shift your funds away from equities and into bonds as you close in on retirement.  Anyone that followed that advice for their 401ks or 403bs is probably looking at a pretty grim situation.  The same Fed Policy that is stimulating all those grand stock market surges and corporate profits is killing most older adults and retired folks’  retirement savings portfolios.  And, that implies some that they have them.  Large number of studies say that a lot of folks do not have any kind of retirement benefit or savings outside of their homes and social security.  So, you can see that I’m really not kidding when I envision kids either having to take their grandparents into their homes or endure stepping over them in the streets.  Social Security is the program that keeps the elderly independent, fed, and alive.  Or, as Barro puts it more succinctly:

Social Security is dominant: Forty-nine percent of this household’s wealth is in the form of the expectation of drawing government benefits in the future. The next largest slice, 23 percent, is accrued benefits in traditional pension plans. But that figure is skewed by a handful of workers who are lucky enough to participate in such plans; as of 2010, only 14 percent of U.S. workers were earning benefits in such a plan.

Private saving for retirement is woeful. This typical near-retirement household has just $42,000 in retirement accounts and $18,300 in other financial assets. For most Americans, Social Security isn’t augmenting private saving; private saving is (just barely) augmenting Social Security.

And as both home equity and stocks were battered over the last few years, retirement insecurity worsened. Munnell and her colleagues estimate that as of 2010, 53 percent of American households were on track to be more than 10 percent below the amount of assets they would need at age 65 to maintain their standard of living in retirement, up from 44 percent in 2007.

There are many ways to enhance Social Security.  Barrow mentions three of them.  But, as he points out, none of those are the default option of the Beltway crowd.

The default assumption in Washington is that Social Security needs to be cut to fix our long-term budget problems. But it’s really a question of priorities. Social Security is, by definition, an efficient program: About 98 percent of its costs go out in the form of benefit checks, which the beneficiaries spend on whatever they value most. If we raise taxes on the people who would gain from increased benefits and cut in areas like Medicare, where the government buys a lot of things we don’t really need, we can afford to augment the federal role in retirement saving and alleviate the problem of retirement insecurity.

See that?  We’re talking about an efficient government program.  But, again, that seems to just fly in the face of the current Republican party’s–and more than a few Democratic enablers–110912_great_depression_ap_328desire to recreate Mississippi in every possible place in America.  They don’t want any example of  government programs that work well because that doesn’t fit in with their 100% privatization schemes that increase their personal wealth and the wealth of their plutocrat overlords.  The most sad thing is that the most successful public programs are those that provide security to the most vulnerable populations; poor children and the elderly.  So, granny and baby-starving Republicans are literally hurting the least among us to do the bidding of their corporate plantation masters who seem to never, ever get enough.

It’s obviously not about what works and what doesn’t or what’s an efficient use of tax payer money and what’s not.  It’s about enriching the few at the cost of the many while using outright lies and distortions to confuse the issue.  We don’t need to socialize many things in order to achieve an efficient economy.  Indeed, there are many markets that would operate better without government interference to subsidize the suppliers.  But, you rarely hear any one talk about removing the many market-killing examples of corporate welfare.  Instead, you only hear about sinking the government programs that are efficient and provide a modicum of safety to the least among us.  I think a lot of it is because it outrages their sensibilities to see themselves be proved so hugely wrong time and time again.  Government subsidies to corporations are seen as enabling the free market even when they do the very opposite. But, political decision makers create or make programs inefficient to support their world views.  This makes the ridiculous attacks on Social Security and Head Start even more spurious. What really kills me is the number of pundits that would rather spout platitudes pushed in their mouths by their delusional overlords than find studies like Munnell’s that prove them so very wrong.  At least a few of them–like Josh Barro at Bloomberg who is also the son of one of the gods of economics–takes the time to do a little research. Now, if some of that research would only reach the President’s desk.


Senator Bernie Sanders Introduces Bill to Apply Payroll Tax to High Incomes

Bernie-Sanders

I’m sure most of the corporate media will ignore this, but Senator Bernie Sanders today introduced a bill to “strengthen Social Security” by applying payroll taxes to all income–including from self-empoyment–to people earning more than $250,000 annually. So far I’ve only seen this reported by one national media outlet.

The Hill:

Sanders and other liberals are concerned Obama may strike a deficit-reduction deal with Republicans that would reduce Social Security benefits by adopting a less generous way of adjusting benefits for inflation.

Sanders on Thursday introduced legislation co-sponsored by Senate Majority Leader Harry Reid (D-Nev.) to raise payroll taxes on the wealthy to extend the solvency of Social Security.
Democratic Sens. Barbara Boxer (Calif.), Amy Klobuchar (Minn.), Sheldon Whitehouse (R.I.), Al Franken (Minn.) and Richard Blumenthal (Conn.) have co-sponsored the bill as well.

Representative Peter De Fazio is introducing a companion bill in the House.

“Social Security is facing an unprecedented attack from those who either want to privatize it completely or who want to make substantial cuts,” said Sanders at a press conference. “The argument being used to cut Social Security is that because we have a significant deficit problem and a $16.6 trillion national debt, we just can’t afford to maintain Social Security benefits.

“This argument is false. Social Security, because it is funded by the payroll tax, not the U.S. Treasury, has not contributed one nickel to our deficit,” he said.

Sanders estimates switching to a chained-CPI formula for determining benefits for Social Security would result in the average 65 year old living on about $15,000 a year receiving $650 less each year when they turn 75 and $1,000 less a year when they turn 85.

The bill is supported by (PDF) “The Strengthen Social Security Campaign, comprised of more than 320 organization throughout the country representing more than 50 million Americans, including the National Committee to Preserve Social Security and Medicare; AFL-CIO; United Steelworkers; Alliance for Retired Americans; Social Security Work; Campaign for Community Change; The Arc.”

The AARP announced yesterday that it is going to be running ads

If you haven’t read the op-ed by Thomas Edsall (The War on Entitlements) in today’s New York Times, I hope you will take the time to do so now. Thanks to RalphB for posting the link on the morning thread! Here’s the introduction:

The debate over reform of Social Security and Medicare is taking place in a vacuum, without adequate consideration of fundamental facts.

These facts include the following: Two-thirds of Americans who are over the age of 65 depend on an average annual Social Security benefit of $15,168.36 for at least half of their income.

Currently, earned income in excess of $113,700 is entirely exempt from the 6.2 percent payroll tax that funds Social Security benefits (employers pay a matching 6.2 percent). 5.2 percent of working Americans make more than $113,700 a year. Simply by eliminating the payroll tax earnings cap — and thus ending this regressive exemption for the top 5.2 percent of earners — would, according to the Congressional Budget Office, solve the financial crisis facing the Social Security system.

Gore vidal quote

So why don’t we talk about raising or eliminating the cap – a measure that has strong popular, though not elite, support?

I think we all know the answer to that question, don’t we?


Jay Carney: “Technical” Social Security Cuts Still On The Table

Obama social security cuts

Jay Carney was sent out today to mouth Obama’s slimy weasel words at the daily press briefing:

Q [Johnathan Karl, ABC] What about reducing the annual cost of living increases for Social Security recipients?

MR. CARNEY: Again, as part of a big deal, part of a comprehensive package that reduces our deficit and achieves that $4-trillion goal that was set out by so many people in and outside of government a number of years ago, he would consider that the hard choice that includes the so-called chain CPI, in fact, he put that on the table in his proposal, but not in a cherry-picked or piecemeal way. That’s got to be part of a comprehensive package that asks that the burden be shared; that we don’t, as some in Congress want, ask seniors to bear the burden of further deficit reduction alone, or middle-class families who are struggling to send their kids to college, or parents of children who are disabled who rely on programs to help them get through….

Q But I just want to be clear what you said at the beginning of that answer, which is the President….as part of an overall balanced approach, he does not rule out effectively reducing benefits for Social Security recipients?

MR. CARNEY: He has put forward a technical change as part of a big deal — and it’s on the table — that he put forward to the Speaker of the House. The Speaker of the House, by the way, walked away from that deal even though it met the Republicans halfway on revenues and halfway on spending cuts and included some tough decisions by the President on entitlements. The Speaker walked away from that deal.

But as part of that deal, the technical change in the so-called CPI is possible in his own offer as part of a big deal.

Excuse me? Cutting Social Security benefits by means of the Chained CPI is NOT a “technical change.” Once again, Bernie Sanders explains what is really going on: Chained CPI: An economic, moral disaster.

How many candidates for Congress last year won on the following platform?

1. That Social Security cost-of-living adjustments are too generous. Social Security should be cut over the next two decades by more than $1,000 a year for 85-year-old widows living on $1,200 a month.

2. That benefits earned by disabled veterans as a result of losing their arms, legs or eyesight in Iraq and Afghanistan are too generous. Disabled veterans’ benefits should be cut over the next 15 years by more than $1,400 a year.

3. That working families and the middle class don’t pay enough in taxes. We need to enact an across-the-board tax increase that disproportionately hurts workers making between $30,000 and $40,000 a year.
Answer: None.

And yet all of these things will happen if Congress changes the way inflation is calculated by switching to a consumer price index (CPI) designed to lower cost-of-living adjustments….Wall Street billionaires and other supporters claim that changing the consumer price index is a “minor tweak.” Tell that to the millions of senior citizens trying to survive on just $14,000 a year whose Social Security benefits would be cut overall by $112 billion during the next decade.

Average 65-year-olds would get $650 a year less in benefits when they turn 75 and see a $1,000 a year cut when they turn 85.

obamafingerscrossed

Earlier, in response to an earlier question by Jonathan Karl, Carney supposedly took raising the eligibility age for Medicare off the table.

But why should we believe him? Sure enough Beltway Bob interprets the weasel words for us. On raising the Medicare age:

the cutoff for Medicare eligibility age has been under consideration repeatedly, giving health-care experts more time to run the numbers and parse their results. Their conclusion, essentially, was that raising the Medicare eligibility age is counterproductive: It cuts the deficit but raises national health spending as it moves seniors to more expensive insurance options. Some in the White House are simply more skeptical of the policy than they were two years ago.

BUT…

The White House wants more revenues, and they want to get them through tax reform. But they’re not going to get $1 trillion in newer revenues. They’re hoping, at best, for another $600 billion or so. But that’s not enough for the administration to take the hit on the Medicare eligibility age. So they’re making their base happy and taking it off the table.

Does that mean it’s really off the table? Well, if Boehner went to the White House tomorrow and offered $1 trillion in new revenues, half of which would come via a carbon tax, in return for Medicare eligibility, I’m pretty certain the White House would hear him out. But the White House is pretty sure Boehner’s not going to offer that deal.

Digby has an update on possible “changes” to Medicare.

Here’s your Village in action. We have Ben White, POLITICO Chief Economic Correspondent, declaring on twitter that the White House offer to cut Social Security just isn’t going to get the job done:

If all WH has in return for another tax increase is superlative CPI I really don’t see any deal materializing.
— Ben White (@morningmoneyben) February 11, 2013

Ok fine, he’s just being a typical jaded and “savvy” Politico reporter. Why, of course, anyone who’s anyone knows that simply destroying Social security won’t be enough.

But look at how the White House immediately responds:

@morningmoneyben Remember we have an offer on the table that includes CPI, but also inclues Medicare changes and spending cuts

— Dan Pfeiffer (@pfeiffer44) February 11, 2013
@morningmoneyben R’s have no offer on the table, no plan, and no longer agree with their previous position that tax refom can reduce deficit
— Dan Pfeiffer (@pfeiffer44) February 11, 2013

See? We really do want to cut Social Security but that’s not all! We also want to “change” medicare and cut more spending. Really! We just dying to enact more austerity and we’re willing to do it as far as the eye can see! Those Republicans won’t even agree to tax reform, (which everyone knows means that we’re going to lower corporate rates.)

Ok, how about if we agree to slash funding for education and Veteran’s health care? Would you give us credit then? How about if we agree to ritualistically kill Big Bird on national TV? Then will you believe that we’re Grown-ups? CAN’T YOU SEE THAT WE ARE THE GROWN-UPS!!!! Why won’t you give us credit for being grown-ups ? We try so hard….

Read the rest of Digby’s post for her review of yesterday’s Sunday House of Pain with Dancin’ Dave.

Have I mentioned lately how much I fucking hate these fucking mealy-mouthed granny starvers? (h/t Mike Malloy) If we’re really lucky, and John Boehner is as stupid as he looks and sounds, Ben White’s prediction will be correct and there won’t be a “big deal.” Assuming Obama doesn’t get down on he knees and beg the Republicans to cut Social Security anyway, that is.