That "New Voodoo" That They Do So Well?

Paul Krugman has let the irony of the current economic quandary get to him. He's even quoting Dire Straits:

This was a year of spectacular hypocrisy. From politicians (mainly Republicans), that meant you got your money for nothing and your tax cuts for free.

I think he's just being polite. It really wasn't "hypocrisy," it was outright lying to fools (IMHO fools talking to fools).(Emphasis marks added - Ed.)

The New Voodoo

Paul Krugman Hypocrisy never goes out of style, but, even so, 2010 was something special. For it was the year of budget doubletalk — the year of arsonists posing as firemen, of people railing against deficits while doing everything they could to make those deficits bigger.

And I don’t just mean politicians. Did you notice the U-turn many political commentators and other Serious People made when the Obama-McConnell tax-cut deal was announced? One day deficits were the great evil and we needed fiscal austerity now now now, never mind the state of the economy. The next day $800 billion in debt-financed tax cuts, with the prospect of more to come, was the greatest thing since sliced bread, a triumph of bipartisanship.

Still, it was the politicians — and, yes, that mainly meant Republicans — who took the lead on the hypocrisy front.

In the first half of 2010, impassioned speeches denouncing federal red ink were the G.O.P. norm. And concerns about the deficit were the stated reason for Republican opposition to extension of unemployment benefits, or for that matter any proposal to help Americans cope with economic hardship.

But the tone changed during the summer, as B-day — the day when the Bush tax breaks for the wealthy were scheduled to expire — began to approach. My nomination for headline of the year comes from the newspaper Roll Call, on July 18: “McConnell Blasts Deficit Spending, Urges Extension of Tax Cuts.”

How did Republican leaders reconcile their purported deep concern about budget deficits with their advocacy of large tax cuts? Was it that old voodoo economics — the belief, refuted by study after study, that tax cuts pay for themselves — making a comeback? No, it was something new and worse.

To be sure, there were renewed claims that tax cuts lead to higher revenue. But 2010 marked the emergence of a new, even more profound level of magical thinking: the belief that deficits created by tax cuts just don’t matter. For example, Senator Jon Kyl of Arizona — who had denounced President Obama for running deficits — declared that “you should never have to offset the cost of a deliberate decision to reduce tax rates on Americans.”

It’s an easy position to ridicule. After all, if you never have to offset the cost of tax cuts, why not just eliminate taxes altogether? But the joke’s on us because while this kind of magical thinking may not yet be the law of the land, it’s about to become part of the rules governing legislation in the House of Representatives. As the Center on Budget and Policy Priorities points out, the incoming House majority plans to make changes in the “pay-as-you-go” rules — rules that are supposed to enforce responsible budgeting — that effectively implement Mr. Kyl’s principle. Spending increases will have to be offset, but revenue losses from tax cuts won’t. Oh, and revenue increases, even if they come from the elimination of tax loopholes, won’t count either: any spending increase must be offset by spending cuts elsewhere; it can’t be paid for with additional taxes.

So if taxes don’t matter, does the incoming majority have a realistic plan to cut spending? Of course not. Republicans say that they want to cut $100 billion in spending, which is itself small change in a $3.6 trillion federal budget. But they also say that defense, Medicare and Social Security — all the big-ticket items — are off the table. So they’re talking about a 20 percent cut in what’s left, which includes things like running the judicial system and operating the Centers for Disease Control and Prevention; they have offered no specifics about where the cuts will fall.

How will this all end? I have seen the future, and it’s on Long Island, where I grew up.

Nassau County — the part of Long Island that directly abuts New York City — is one of the wealthiest counties in America and has an unemployment rate well below the national average. So it should be weathering the economic storm better than most places.

But a year ago, in one of the first major Tea Party victories, the county elected a new executive who railed against budget deficits and promised both to cut taxes and to balance the budget. The tax cuts happened; the promised spending cuts didn’t. And now the county is in fiscal crisis.

Now the federal government has a lot more flexibility than a county government: it needn’t, and shouldn’t, balance its budget each year. The deficits of the past two years have actually been a good thing, helping to support the economy in the aftermath of the 2008 financial crisis. But Nassau County shows how easily responsible government can collapse in this country, now that one of our major parties believes in budget magic. All it takes is disgruntled voters who don’t know what’s at stake — and we have plenty of those. Banana republic, here we come.

Happy Holidays! Suzan

P.S. Didn't you just lurve the Bach? _______________

"Pimp Bernanke" and Psychopathic CNBC Reporting - Statistics Proving Death of Middle Class & Deficit-Increasing Tax Cuts for Rich Exposed

(If throwing a contribution Pottersville2's way won't break your budget in these difficult financial times, I really need it, and would wholeheartedly appreciate it. Anything you can afford will make a huge difference in this blog's lifetime.)

From the gentle folk at Walled-In Pond:

Where are the jobs? For many companies, they have been moved overseas where the markets are operating normally. Yes, Virginia, the good ole US of A is really suffering (bailouts, anyone?) as other countries have dug out from the financial flimflam of Goldman Sachs and the Federal Reserve and increased their regulatory functions to ensure that they are not victims again. And are you beginning to understand the non-issue of how tax cuts are not needed in order to create jobs? Also, Virginia, aren't you pleased with how well all those ex-third world countries are doing now? Even better than their teachers? (Emphasis marks added - Ed.)

Corporate profits are up. Stock prices are up. So why isn't anyone hiring? Actually, many American companies are — just maybe not in your town. They're hiring overseas, where sales are surging and the pipeline of orders is fat.

More than half of the 15,000 people that Caterpillar Inc. has hired this year were outside the U.S. UPS is also hiring at a faster clip overseas. For both companies, sales in international markets are growing at least twice as fast as domestically.

The trend helps explain why unemployment remains high in the United States, edging up to 9.8 percent last month, even though companies are performing well: All but 4 percent of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.

But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute's senior international economist.

"There's a huge difference between what is good for American companies versus what is good for the American economy," says Scott. American jobs have been moving overseas for more than two decades. In recent years, though, those jobs have become more sophisticated — think semiconductors and software, not toys and clothes. And now many of the products being made overseas aren't coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China and Brazil.

Meanwhile, consumer demand in the U.S. has been subdued. Despite a strong holiday shopping season, Americans are still spending 18 percent less than before the recession on furniture, and 10 percent less on electronics, according to MasterCard's SpendingPulse.

"Companies will go where there are fast-growing markets and big profits," says Jeffrey Sachs, globalization expert and economist at Columbia University. "What's changed is that companies today are getting top talent in emerging economies, and the U.S. has to really watch out."

With the future looking brighter overseas, companies are building there, too. Caterpillar, maker of the signature yellow bulldozers and tractors, has invested in three new plants in China in just the last two months to design and manufacture equipment. The decision is based on demand: Asia-Pacific sales soared 38 percent in the first nine months of the year, compared with 16 percent in the U.S. Caterpillar stock is up 64 percent this year.

"There is a shift in economic power that's going on and will continue. China just became the world's second-largest economy," says David Wyss, chief economist at Standard & Poor's, who notes that half of the revenue for companies in the S&P 500 in the last couple of years has come from outside the U.S.

Take the example of DuPont, which wowed the world in 1938 with nylon stockings. Known as one of the most innovative American companies of the 20th century, DuPont now sells less than a third of its products in the U.S. In the first nine months of this year, sales to the Asia-Pacific region grew 50 percent, triple the U.S. rate. Its stock is up 48 percent this year.

DuPont's work force reflects the shift in its growth: In a presentation on emerging markets, the company said its number of employees in the U.S. shrank by 9 percent between January 2005 and October 2009. In the same period, its work force grew 54 percent in the Asia-Pacific countries.

"We are a global player out to succeed in any geography where we participate in," says Thomas M. Connelly, chief innovation officer at DuPont. "We want our resources close to where our customers are, to tailor products to their needs." While most of DuPont's research labs are still stateside, Connelly says he's impressed with the company's overseas talent. The company opened a large research facility in Hyderabad, India, in 2008.

A key factor behind this runaway international growth is the rise of the middle class in these emerging countries. By 2015, for the first time, the number of consumers in Asia's middle class will equal those in Europe and North America combined.

"All of the growth over the next 10 years is happening in Asia," says Homi Kharas, a senior fellow at the Brookings Institution and formerly the World Bank's chief economist for East Asia and the Pacific. Coca-Cola CEO Muhtar Kent often points out that a billion consumers will enter the middle class during the coming decade, mostly in Africa, China and India. He is aggressively targeting those markets. Of Coke's 93,000 global employees, less than 13 percent were in the U.S. in 2009, down from 19 percent five years ago.

The company would not say how many new U.S. hires it has made in 2010. But its latest new investments are overseas, including $240 million for three bottling plants in Inner Mongolia as part of a three-year, $2 billion investment in China. The three plants will create 2,000 new jobs in the area. In September, Coca-Cola pledged $1 billion to the Philippines over five years.

The strategy isn't restricted to just the largest American companies. Entrepreneurs, whether in technology, retail or in manufacturing, today hire globally from the start. Consider Vast.com, which powers the search engines of sites like Yahoo Travel and Aol Autos. The company was founded in 2005 with employees based in San Francisco and Serbia. Harvard Business School Dean Nitin Nohria worries that the trend could be dangerous. In an article in the November issue of the Harvard Business Review, he says that if U.S. businesses keep prospering while Americans are struggling, business leaders will lose legitimacy in society. He exhorted business leaders to find a way to link growth with job creation at home.

Other economists, like Columbia University's Sachs, say multinational corporations have no choice, especially now that the quality of the global work force has improved. Sachs points out that the U.S. is falling in most global rankings for higher education while others are rising.

"We are not fulfilling the educational needs of our young people," says Sachs. "In a globalized world, there are serious consequences to that."

And an especially cognizant economic post comes from our friend, Jazzbumpa at Retirement Blues where he makes it easy to view our economy's demise (emphasis marks and some editing inserted - Ed.):

The U.S. Economy is Dying - Pt 2

Back in October I posted Part 1, based on a look at GDP since WW II. Here are some other dismal facts to ponder. Consider first, Capacity Utilization. Data from the Federal Reserve. It's easy to pick out the recessions on this graph. The line droops like an icicle as business slows, then climbs up again as we come out of recession. The disturbing thing is the trend line, shown in green on the chart - relentlessly down, down, down for over 40 years, as each recovery is more anemic than the last.

Just for kicks, the capacity utilization line is sketched out in Red and Blue segments, indicating the spans of Republican and Democratic administrations. I've also added a horizontal line for each admin, indicating the average of utilization over its time span. Note that the moribund Carter admin. was at a higher level than ANY of the Republicans. Actually, at 83.45%, Carter even inches out Clinton at 82.84%. It's just an amazing coincidence that all of the icicle tips - except for the last one, that B. Hoover Obama inherited from his idiot predecessor - are Red.

One might also note in passing that the onset of a Republican administration is always - and I mean ALWAYS indicated by a steep drop in capacity utilization (e.g. RECESSION). This must be one of the ways in which Republicans are good for business.

Right now, in the midst of an a scintillating recovery - we've been stalled at 75% for three months - we're still nowhere near the descending tend line that connects the tops. Note also that 75% is in the mid-range for previous bottoms. Here's industrial production since 1967 , from Calculated Risk.

There was a time when this was a growth curve - then G. W. Bush happened. Now it looks like we're stalling out at a level that was once a peak - a mere 10 years ago.Remember that small business are the real growth engine of our economy. Here are their near-term hiring plans, also from CR (Calculated Risk). The ZERO level used to occur at bottoms. Now, we've had to improve to get to that level. (Take that, Lump of Labor Fallaciators.) Plus it looks like we might be stalling there as well. On the other hand, though, big business are doing their part by hiring lots of people. That would perhaps be more helpful if it were happening on this continent. (Take that, Lump of Labor Fallaciators.) (H/T to the L/W.) And if you're wondering why all this is happening, let's ask all the small business owners what their biggest problem is. Poor sales?!? Could that be an aggregate demand shortfall?

Those small business owners sound like a bunch of Keynesian idiots!

No wonder we're in so much trouble.

Paul Krugman finally says:

Yes, They’re Frauds

And then there are those very disturbing statistics proving beyond your very need for proof . . . (emphasis marks added - Ed.).

22 Statistics That Prove The Middle Class Is Being Systematically Wiped Out Of Existence In America

The 22 statistics that you are about to read prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.

The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.

See proof of the Middle Class extermination here

So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.

The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker ten times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.

What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.

So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.

What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about 6 unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.

Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.

But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart. The truth is that the middle class in America is dying - and once it is gone it will be incredibly difficult to rebuild.

House Republican Rule Changes Pave the Way For Major Deficit-Increasing Tax Cuts, Despite Anti-Deficit Rhetoric House Republican leaders yesterday unveiled major changes to House procedural rules that are clearly designed to pave the way for more deficit-increasing tax cuts in the next two years. These rules stand in sharp contrast to the strong anti-deficit rhetoric that many Republicans used on the campaign trail this fall. While changes in congressional rules rarely get much public attention, these new rules — which are expected to be adopted by party-line vote when the 112th Congress convenes on January 5 — could have a substantial impact and risk making the nation’s fiscal problems significantly worse.

I hear that a lot of journalistic insiders were annoyed when I began calling out self-styled deficit hawks like Paul Ryan as flim-flammers. But they are; nobody, and I mean nobody, in a position of influence within the GOP cares about deficits when tax cuts for the affluent are on the line. Deficit hawkery is just a stick with which to beat down social programs.

Suzan ________________________

Happy Christmas! "Shock Doctrine" Triumphs (Brave New Dystopia*?) Post Mortem for the World's "Reserve Currency" ($)? Blacklisted!

Have you heard anyone say this holiday season that $5 gas is just around the corner (or a little bit further in the distance to soften the blow)? Or even $10 or $15 gas? Maybe because of devaluation of the dollar (and not just supply and demand)? ______________ This could hardly be more interesting. Listen to Paul Craig Roberts expound (and I do love the word "pound" being a part of that verb) on everything that's been going on and leading to disaster. Who needs the money? Ireland or the IMF? Who's really bankrupt? US or them? Listen to all three of Dr. Roberts' videos because the third one contains some real surprises. Is it really Post Mortem for the World's "Reserve Currency"? (Emphasis marks added - Ed.)

December 13, 2010 Paul Volcker is worried about the future of the dollar and for good reason. The Fed has initiated a program (Quantitative Easing) that presages an end to Bretton Woods 2 and replaces it with different system altogether. Naturally, that's made trading partners pretty nervous. Despite the unfairness of the present system - where export-dependent countries recycle capital to US markets to sustain demand - most nations would rather stick with the "devil they know", then venture into the unknown.

But US allies weren't consulted on the matter. The Fed unilaterally decided that the only way to fight deflation and high unemployment in the US, was by weakening the dollar and making US exports more competitive. Hence - QE2. But that means that the US will be battling for the same export market as everyone else, which will inevitably shrink global demand for goods and services. This is a major change in the Fed's policy and there's a good chance it will backfire. Here's the deal: If US markets no longer provide sufficient demand for foreign exports, then there will be less incentive to trade in dollars. Thus, QE poses a real threat to the dollar's position as the world's reserve currency.

Here's what Volcker said: “The growing sense around much of the world is that we have lost both relative economic strength and more important, we have lost a coherent successful governing model to be emulated by the rest of the world. Instead, we’re faced with broken financial markets, underperformance of our economy and a fractious political climate . . . . The question is whether the exceptional role of the dollar can be maintained." (Bloomberg)

This is a good summary of the problems facing the dollar. And, notice that Volcker did not invoke the doomsday scenario that one hears so often on the Internet, that China - which has more than $1 trillion in US Treasuries and dollar-backed assets - will one day pull the plug on the USA and send the dollar plunging.

Read the rest if you've got a strong stomach. Or curiosity about a possible future world.

One commenter likes history (and pop psychology):

Rodney E Lever · 1 week ago

American politics and economic decisions today provide uncanny echoes of the Weimar Republic. The only difference is that the US seems to think it can do anything it damn wants because it has more atomic bombs than anyone else.

Michael Hudson - 'Currency Wars' - This is just the latest installment - November 5, 2010 - Democracy Now! Want to see another great movie that illuminates our current moment in history? Yeah? Make it your (fairly easy) task to see Inside Job, which is an excellent film by Charles Ferguson, narrated by Matt Damon. Here's one review. And another. And another great one. On another pretty depressing (but not totally unexpected) note we learn that connected fellows have been approved to do business with supposedly blacklisted nations. (Makes one wonder if any of these nations are anything other than foils for secret agenda items that we'll be instructed about later, doesn't it?)

U.S. Approved Business With Blacklisted Nations

Despite sanctions and trade embargoes, over the past decade the United States government has granted special licenses allowing American companies to do billions of dollars in business with Iran and other countries blacklisted as state sponsors of terrorism, an examination by The New York Times has found.

At the behest of a host of companies — from Kraft Food and Pepsi to some of the nation’s largest banks — a little-known office of the Treasury Department has made nearly 10,000 exceptions to American sanctions rules, approving deals involving countries that have been cast into economic purgatory, beyond the reach of American business.

Most of the licenses were approved under a decade-old law exempting agricultural and medical humanitarian aid from sanctions. But the law, pushed by the farm lobby and other industry groups, was written so broadly that allowable humanitarian aid has included cigarettes, Wrigley gum, Louisiana hot sauce, weight-loss remedies, body-building supplements and sports rehabilitation equipment sold to the institute that trains Iran’s Olympic athletes.

Hundreds of other licenses were approved because they passed a litmus test: They were deemed to serve American foreign policy goals. And many clearly do, like deals to provide famine relief in North Korea or to improve Internet connections — and nurture democracy — in Iran. But the examination also found cases in which the foreign-policy benefits were considerably less clear.

In one instance, an American company was permitted to bid on a pipeline job that would have helped Iran sell natural gas to Europe, even though the United States opposes such projects. Several other American businesses were permitted to deal with foreign companies believed to be involved in terrorism or weapons proliferation. In one such case, involving equipment bought by a medical waste disposal plant in Hawaii, the government was preparing to deny the license until an influential politician intervened.

As for me, I'm gonna think it's just Christmas spirit (burbling all year long). And as for real Christmas spirit? How about the Shock Doctrine Comes Home? (I mean, come onnnn. Where did you think all this financial chicanery was leading? My own memory keeps flashing back to Pete Peterson traveling the country for decades at his own expense touting the lie that the Social Security Trust Fund was "broke" and needed to be privatized - and now they've found out how to do it with other better lies!)

Just listen!* (Emphasis marks added - Ed.)

Published on Thursday, December 23, 2010 by In These Times.

*The ‘Repo-Demo’ Party’s Three Phase Austerity Plan for America

Get ready for more of the same failed "job creation" policies, enacted by an increasingly unified political elite. The Bush tax cuts are now extended. What cost $3.4 trillion over the past decade, 80% of which accrued to the wealthiest households and U.S. corporations, will now cost another $802 billion over the next two years and a projected $4 trillion over the coming decade. But the Bush tax cut extension just passed by a political elite increasingly united on economic policy—a ‘Repo-Demo’ Party dominated by corporate interests — is only the first of three phases in a new policy offensive designed to protect the incomes of the wealthy and corporate America for another decade, to be paid for directly by middle- and working-class America. Together, the three phases represent the emerging U.S. variant of a general austerity strategy, similar in objective but different in content to other austerity programs now emerging as well in the Eurozone, Japan and elsewhere.

President Obama's deal with Republican leaders, signed into law December 17, 2010, extended tax cuts for the wealthiest Americans for another two years.

Phase Two: Draconian Spending Cuts

The second phase will likely be implemented in the next three months, before the ceiling on the federal debt has to be lifted. It will take the form of massive spending cuts in the U.S. budget, targeting Social Security and Medicare in particular. (A parallel draconian slash in spending will occur at the state level, targeting Medicaid and education).

Social Security has been a prime target since the Reagan years. Unable to cut it in the early 1980s, Reagan instead settled on a major increase in the payroll tax in 1984, creating a $2.5 trillion surplus over the last 25 years. However, that surplus was ‘borrowed’ every year by Congress to cover up in part U.S. budget deficits created annually since the 1980s to pay for war spending and tax cuts.

All that remains of the surplus in the Social Security Trust Fund are government IOUs promising to replace the shortfall when necessary — a replacement we’ll never see in our lifetimes. In 2003, Bush II re-opened the attack on Social Security by trying to privatize it, but failed. Despite the accumulated surplus having been drained, Social Security was still annually producing a surplus and was thus financially too stable to convince the public it needed basic change. In contrast, today, as a result of a chronic three year long recession, there is no longer an annual surplus being created. Social Security is just breaking even.

But implementing the pending payroll tax cuts — part of Phase One — will finally put Social Security in the red, creating for the first time the net annual losses conservatives and corporate America have always needed to push a major gutting of the program. The payroll tax cut is thus the first move in what will prove a general attack on social security that will gain momentum in the coming months.

Reagan conservatives have argued it would first be necessary to ‘starve the beast’ in order to dismantle it. For the first time, that scenario will exist.

Phase Three: Revising Tax Code to Help the Wealthy

Following the imminent draconian cuts in spending and Social Security-Medicare-Medicaid-Education about to take place in 2011, which lie at the heart of the second phase, the third phase of the new austerity strategy will follow in the summer of 2012. It will take the form of a fundamental revision of the U.S. tax code. As part of this general revision, the Bush tax cuts will likely be made permanent for the rest of the decade to come. In addition, personal income tax brackets for the wealthiest households will be reduced to no more than three, possibly two, with a top rate for the wealthy or no more than 28%, representing a return to Reagan years.

For corporations, depreciation write-offs, a de facto investment tax credit for business, will be accelerated to full deductions in the first year — a measure already just enacted for small business this year. For multinational corporations, the foreign profits tax will be restructured to their advantage. The corporate tax rate will be significantly reduced or even phased out entirely. Not least, the new 2% cut in payroll taxes could also be extended, forcing yet another round of further reductions in Social Security and Medicare benefits and still higher co-pays for retirees.

To pay for the tax code rewrite and even more concessions to wealthy households, investors and corporations, the middle class will pay more. Adjustments to the Alternative Minimum Tax, AMT, for the middle class will be phased out. And the mortgage interest tax credit will be eliminated in stages as well.

Same wine in same bottles, with new label Obama and the ‘Repo Demo’ Party have launched a PR offensive in the wake of the Bush tax cut extensions, proclaiming that the Bush tax cuts plus unemployment insurance extension plus payroll tax cut together amount to a ‘Stimulus 2’ package that will result in more economic growth and new jobs.

This is the same old tired song of the Bush administration. In fact, every one of the four major Bush tax cuts passed between 2001-04 was officially called ‘job creation’ bills.

The result of these ‘job bills’ was the weakest job creation following a recession of all the nine prior recessions since 1945. It took 46 months to recover jobs lost from January 2001, the start of Bush’s first recession.

The second recession of the Bush II era, which started in December 2007, was followed by a $168 billion stimulus bill passed in spring 2008 — about $90 billion of which was tax cuts.

The result: 4.5 million full-time jobs lost in 2008. Then another $787 billion stimulus in early 2009, Obama’s ‘Stimulus 1’ package — about half of which was tax cuts. The result: Another 6.5 million full time jobs lost in 2009.

In 2010, another half million lost jobs and dropped out of the labor market. Of the 900,000 private sector jobs created in 2010, more than two thirds were part-time and temp jobs.

At the close of 2010, now we have yet another tax cut heavy ‘Stimulus 2’. Again the claim is that it will create jobs. However, except for the payroll tax cut of $112 billion there is nothing ‘net new’ in the so-called ‘Stimulus 2.’ It’s the same old wine poured into same old bottles — just a new label slapped on the side and a brand new cork (payroll tax cut) added to the opening.

The key question: Will any jobs be created?

Corporations are today sitting on a cash hoard of more than $2 trillion, according to the business press, not investing or creating jobs. Why should increasing that hoard another $500 billion or so result in anything different? That’s the key question conservatives and the ‘Repo-Demo’ Party elite must answer — but are avoiding.

That’s the question the media should be asking, but about which they remain conspicuously silent.

Only the $112 billion payroll tax reduction represents a ‘net new’ contribution to stimulus. But is it sufficient to generate jobs? Not by a long shot. For those earning $50,000 a year to the top payroll tax rate of $106,800 a year, the payroll tax cut will, on average, lead to no more than $20/week in real spending power after adjustments for partial saving, debt paydowns and what will be accelerating costs for food, healthcare, and gasoline coming in 2011. Those below $50,000 will actually have less to spend, since the “Make Work Pay” credit is ending for them.

That’s nowhere nearly sufficient to stimulate the economy and create jobs. Obama’s 2011 ‘Stimulus 2’ will thus prove no more effective than his 2009 ‘Stimulus 1.’

The past decade has produced repeated tax-cut heavy policies targeting the rich and corporations: Bush II and a Republican Congress 2001-06. Bush II and a Democratic Congress 2006-08. Obama and a Democratic Congress 2008-10. And now Obama and a de facto Republican Congress.

The recent Bush tax cut extensions show the corporate-dominated political elite of both parties are now closing ranks as the economic crisis continues with no resolution for all but the wealthy and corporations. The ‘Repo-Demo’ Party, newly aligned around the same old failed policies, has just begun to do its work. Get ready for more of the same.

And as for that "Brave New Dystopia?" Don't stop reading yet! (Emphasis marks added - Ed.)

2011: A Brave New Dystopia

The two greatest visions of a future dystopia were George Orwell’s “1984” and Aldous Huxley’s “Brave New World.” The debate, between those who watched our descent towards corporate totalitarianism, was who was right. Would we be, as Orwell wrote, dominated by a repressive surveillance and security state that used crude and violent forms of control? Or would we be, as Huxley envisioned, entranced by entertainment and spectacle, captivated by technology and seduced by profligate consumption to embrace our own oppression? It turns out Orwell and Huxley were both right. Huxley saw the first stage of our enslavement. Orwell saw the second. We have been gradually disempowered by a corporate state that, as Huxley foresaw, seduced and manipulated us through sensual gratification, cheap mass-produced goods, boundless credit, political theater and amusement. While we were entertained, the regulations that once kept predatory corporate power in check were dismantled, the laws that once protected us were rewritten and we were impoverished. Now that credit is drying up, good jobs for the working class are gone forever and mass-produced goods are unaffordable, we find ourselves transported from “Brave New World” to “1984.”

The state, crippled by massive deficits, endless war and corporate malfeasance, is sliding toward bankruptcy. It is time for Big Brother to take over from Huxley’s feelies, the orgy-porgy and the centrifugal bumble-puppy. We are moving from a society where we are skillfully manipulated by lies and illusions to one where we are overtly controlled. Orwell warned of a world where books were banned. Huxley warned of a world where no one wanted to read books. Orwell warned of a state of permanent war and fear. Huxley warned of a culture diverted by mindless pleasure. Orwell warned of a state where every conversation and thought was monitored and dissent was brutally punished. Huxley warned of a state where a population, preoccupied by trivia and gossip, no longer cared about truth or information. Orwell saw us frightened into submission. Huxley saw us seduced into submission. But Huxley, we are discovering, was merely the prelude to Orwell. Huxley understood the process by which we would be complicit in our own enslavement. Orwell understood the enslavement. Now that the corporate coup is over, we stand naked and defenseless. We are beginning to understand, as Karl Marx knew, that unfettered and unregulated capitalism is a brutal and revolutionary force that exploits human beings and the natural world until exhaustion or collapse.

“The Party seeks power entirely for its own sake,” Orwell wrote in “1984.” “We are not interested in the good of others; we are interested solely in power. Not wealth or luxury or long life or happiness: only power, pure power. What pure power means you will understand presently. We are different from all the oligarchies of the past, in that we know what we are doing. All the others, even those who resembled ourselves, were cowards and hypocrites. The German Nazis and the Russian Communists came very close to us in their methods, but they never had the courage to recognize their own motives. They pretended, perhaps they even believed, that they had seized power unwillingly and for a limited time, and that just round the corner there lay a paradise where human beings would be free and equal. We are not like that. We know that no one ever seizes power with the intention of relinquishing it.

Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power.” . . . The noose is tightening. The era of amusement is being replaced by the era of repression. Tens of millions of citizens have had their e-mails and phone records turned over to the government. We are the most monitored and spied-on citizenry in human history. Many of us have our daily routine caught on dozens of security cameras. Our proclivities and habits are recorded on the Internet. Our profiles are electronically generated. Our bodies are patted down at airports and filmed by scanners. And public service announcements, car inspection stickers, and public transportation posters constantly urge us to report suspicious activity. The enemy is everywhere.

Those who do not comply with the dictates of the war on terror, a war which, as Orwell noted, is endless, are brutally silenced. The draconian security measures used to cripple protests at the G-20 gatherings in Pittsburgh and Toronto were wildly disproportionate for the level of street activity. But they sent a clear message — DO NOT TRY THIS. The FBI’s targeting of antiwar and Palestinian activists, which in late September saw agents raid homes in Minneapolis and Chicago, is a harbinger of what is to come for all who dare defy the state’s official Newspeak.

The agents — our Thought Police — seized phones, computers, documents and other personal belongings. Subpoenas to appear before a grand jury have since been served on 26 people. The subpoenas cite federal law prohibiting “providing material support or resources to designated foreign terrorist organizations.” Terror, even for those who have nothing to do with terror, becomes the blunt instrument used by Big Brother to protect us from ourselves. “Do you begin to see, then, what kind of world we are creating?” Orwell wrote. “It is the exact opposite of the stupid hedonistic Utopias that the old reformers imagined. A world of fear and treachery and torment, a world of trampling and being trampled upon, a world which will grow not less but more merciless as it refines itself.”

Wishing you very happy holidays!

(Or else!) Suzan _________________

Why We Speak of Pottersville As a Threatening American Probability

Yes, Virginia (and Barth (and Elizabeth), There is a very good reason why we speak of Pottersville in hushed tones.

"It's a Wonderful Life": The most terrifying movie ever

Underneath the warm fuzzies, Frank Capra's holiday classic is a tale of hunger, greed and a troubled America

I don't care what your parents told you. "It's a Wonderful Life," that reassuring holiday spectacle, is really the most terrifying Hollywood film ever made. It's one of a handful of masterpieces directed by Frank Capra, an Italian immigrant who loved America because America saved him.

Capra lived through the Depression, then through the rise of terrible ideologies. He knew how bad things could get. He knew, too, that the United States was not immune and this knowledge spiked his love with the worst kind of fear. The result was that special melancholy, blue shot through with black, that runs through his films, the best of which are parables that operate on various levels, some of which were probably unknown to Capra himself.

If you were to cut "It's a Wonderful Life" by 20 minutes, its true subject would be revealed: In this shortened version, George Bailey, played by a Jimmy Stewart forever on the edge of hysteria, after being betrayed by nearly everyone in his life, after being broken on the wheel of capitalism, flees to the outskirts of town, Bedford Falls, N.Y., where he leaps off a bridge with thoughts of suicide.

That's the movie: The good man driven insane.

Oh no, you might say, you've missed the entire point. Following the trials of George Bailey without seeing his rescue is like hearing the story of the Passion without knowing of the Resurrection. It's just Jesus on the cross saying, "Oh, Father, why hast Thou forsaken me," followed by a star wipe and end credits. It's the power of editing. Where you start and where you finish is the whole story. That's all modern literature is: the identical image cropped. It's the same with the narrative experienced by everyone every day. The story is reframed for taste. On this channel, Barack Obama fails and is condemned. On that channel, Barack Obama stumbles but is resurrected in the way of George Bailey. Did the Chicago Bears lose? Well, then let's find the channel on which the Chicago Bears win. In other words, I did not miss the point. The story of the George Bailey who is honored and saved remains. It's the explicit message of the final scene: A man with friends is never poor. But another, deeper message is there, too - it's Capra wailing at that secret register picked up by bats and dogs, saying, "Help, help, America is in trouble!"

"It's a Wonderful Life" is about hunger. It's about greed. It's about the many ways a good man is stymied. Finally, it's about George Bailey, whose decency prevents him even from killing himself. Though he wants to jump, he dives into the river to save another suicide, instead -- the angel, it turns out, who has come to show George that his life has been wonderful after all, because human commerce is a web and as part of that web George has affected and saved thousands of people. To make this point, the angel famously shows George what the world would be like had he never been born, leading him back into town, which had been Bedford Falls but is now named after the treacherous banker who controls it: Pottersville.

Bedford Falls was quaint and fine; Pottersville is vulgar and mean. In this new world, George Bailey's wife is a spinster. His brother is dead. His house is a ruin.

OK, OK, says George, I've had enough. Just like that, he's returned to life, resurrected.

He runs home, where friends and relatives have gathered to save him.

Here's my point: I do not think the hidden message vanishes when the movie goes Hollywood and happy. I believe the resolution of the darker movie is, in fact, still there, wrapped around the happy ending of the classic. Look again at the closing frames - shots of Jimmy Stewart staring at his friends. In most, he's joyful. But in a few, he's terrified. As I said, this is a terrifying movie. An hour earlier George was ready to kill himself. He has now returned from a death experience. He was among the unborn, had crossed over like Dante's hero, had seen this world from beyond the veil. In those frames - "The Night Journey of George Bailey" - I don't think he's seeing the world that would exist had he never been born. I think he's seeing the world as it does exist, in his time and also in our own.

George had been living in Pottersville all along. He just didn't know it. Because he was seeing the world through his eyes -- not as it was, but as he was: honest and fair. But on "The Night Journey," George is nothing and nobody. When the angel took him out of his life, he took him out of his consciousness, out from behind his eyes. It was only then that he saw America. Bedford Falls was the fantasy. Pottersville is where we live. If you don't believe me, examine the dystopia of the Capra movie - the nighttime world of neon bars and drunks and showgirl floozies. Does Bedford Falls feel more like the place you live, or does Pottersville? I live in a place that looks very much like Bedford Falls, but after 10 minutes in line at the bank or in the locker room where the squirts are changing for hockey I know I'm in Pottersville.

I'm betting this was as much the case in Capra's time as it is in our own. He loved America but was watching the triumph of Pottersville. That's why, in the last scene, George looks at his friends with terror. He's happy to be alive, but he's disillusioned, wised up in just the worst way. He finally knows the world as it really is, what his friends are capable of, the dark potential coiled in each of them.

His wife is a spinster in Pottersville because, if she's not with George, she cannot be anything. She's just one of two characters who are, in fact, the same in both worlds, the other being Mr. Potter. Everyone else is two-faced, masked.

Simply put, George has been cursed with knowledge, shown the truth of the world - seen hidden things. It's the sort of vision that makes a person go insane. Instead of ending the movie 20 minutes early, it might be interesting to let it run for another hour, to see the hero after the guests have left the house and the money has been collected and the children gone to sleep - George left to grapple alone with the meaning and the message of what he has been allowed to see. He is like Jacob and he has wrestled with the angel and carries a terrible burden. He would either sit quietly in darkness, or weep like a baby, or wander through the streets of Pottersville, shouting, "Vanity of vanities, all is vanity."

Why we do what we do.

Peace,

Suzan _________________

The Truth About the Scam Explaining Social Security's "Disappearance"

Better sooner than later. Here's the truth about what they've got planned for your Social Security, etc., guarantee that has been obfuscated if not outright lied about by the MSM. P.S. Real reporters disappeared decades ago (emphasis marks added - Ed.):

Trudy Lieberman: What are we to make of this consensus on fixes to Social Security that some in the media tell us has been reached?

William Greider: This is a staggering scandal for the media. I have yet to see a straightforward, non-ideological, non-argumentative piece in any major paper that describes the actual condition of Social Security. The core fact is that Social Security has not contributed a dime to the deficit, but has piled up trillions in surpluses, which the government has borrowed and spent. Social Security’s surpluses have actually offset the impact of the deficit, beginning with Reagan.

TL: Why don’t reporters report this?

WG: They identify with the wisdom of the elites who don’t want to talk about this — because if people understand that Social Security has a $2.5 trillion surplus, building toward more than $4 trillion, people will ask why are politicians trying to cut Social Security benefits?

TL: Is that why coverage has been so one-sided?

WG: Most reporters, with few exceptions, assume the respectables are telling the truth about Social Security, when it is really propaganda. What elites are saying is deeply misleading, and they deliberately are distorting the story. But reporters think they are smart people and must know what they are talking about.

TL: Who influences the coverage?

WG: There are layers of influence that tell reporters this is the safe side of the story. They don’t go to people who might be unsafe sources, like labor leaders who know how changes will affect workers, or to old liberals who are out of favor but who know the origins of Social Security and why it was set up in the first place, or to neutral experts like actuaries who actually understand how it works and what the trust funds are all about. If they write about what the AFL-CIO thinks, they are out of the orthodoxy.

TL: What are other layers?

WG: Most reporters who cover difficult areas typically develop sources, and they write for those sources. They don’t want to offend them for fear they will lose access. Reporters, we know, are sensitive, nervous animals; they act like scared little rabbits. They also know what the owners of their publications think. And those owners think pretty much what the Business Roundtable and Chamber of Commerce think.

TL: Are reporters disconnected from the public?

WG: Reporters are so embedded in the established way of understanding things. They are distanced from people at large and don’t spend much time trying to see why ordinary people see things differently from the people in power — and why people are often right about things.

Please read the whole article and then read the other parts that precede this conclusion. You won't regret it, and I know you won't believe me at first, but it's for your peace of mind. Happy Holidays! Suzan If you want to become familiar with even more lies being bandied about MSM right now from Rethugs and their minions read Paul Krugman's latest: The Humbug Express.

If you listen to the recent speeches of Republican presidential hopefuls, you’ll find several of them talking at length about the harm done by unionized government workers, who have, they say, multiplied under the Obama administration. A recent example was an op-ed article by the outgoing Minnesota governor Tim Pawlenty, who declared that “thanks to President Obama,” government is the only booming sector in our economy: “Since January 2008” — silly me, I thought Mr. Obama wasn’t inaugurated until 2009 — “the private sector has lost nearly eight million jobs, while local, state and federal governments added 590,000.”

Horrors! Except that according to the Bureau of Labor Statistics, government employment has fallen, not risen, since January 2008. And since January 2009, when Mr. Obama actually did take office, government employment has fallen by more than 300,000 as hard-pressed state and local governments have been forced to lay off teachers, police officers, firefighters and other workers.

. . . And it’s a very effective process. When discussing the alleged huge expansion of government under Mr. Obama, I’ve repeatedly found that people just won’t believe me when I try to point out that it never happened. They assume that I’m lying, or somehow cherry-picking the data. After all, they’ve heard over and over again about that surge in government spending and employment, and they don’t realize that everything they’ve heard was a special delivery from the Humbug Express.

So in this holiday season, let’s remember the wisdom of Ebenezer Scrooge. Not the bit about denying food and medical care to those who need them: America’s failure to take care of its own less-fortunate citizens is a national disgrace. But Scrooge was right about the prevalence of humbug. And we’d be much better off as a nation if more people had the courage to say “Bah!”

______________________

Dangerously "Courting Disaster" For the US By the Supremes (Want To See A Surprisingly Relevant Movie?)

Sophia, impatiently awaiting Santa Claus, displays the Christmas card she painted all by herself. _ _ _ _ _ _ _ _ _ _ Russ Baker says we are Supremely Courting Disaster. He's always right.

December 23, 2010 Only infrequently does the New York Times really go for the jugular and spell out for us the extent to which the system is rigged against ordinary people and their interests. One such rare example is a recent article by the Times’ thoughtful legal writer, Adam Liptak, based on new academic research out of Chicago.

Under the headline

Justices Offer Receptive Ear to Business Interests

Liptak reports that:

Almost 40 years ago, a Virginia lawyer named Lewis F. Powell Jr. warned that the nation’s free enterprise system was under attack. He urged the U.S. Chamber of Commerce to assemble “a highly competent staff of lawyers” and retain outside counsel “of national standing and reputation” to appear before the Supreme Court and advance the interests of American business.

“Under our constitutional system, especially with an activist-minded Supreme Court,” he wrote, “the judiciary may be the most important instrument for social, economic and political change.”

Mr. Powell, who joined the Supreme Court a year later in 1972 and died in 1998, got his wish - and never more so than with the court led by Chief Justice John G. Roberts Jr.

The chamber now files briefs in most major business cases. The side it supported in the last term won 13 of 16 cases. Six of those were decided with a majority vote of five justices, and five of those decisions favored the chamber’s side. One of them was Citizens United, in which the chamber successfully urged the court to guarantee what it called “free corporate speech” by lifting restrictions on campaign spending . . . .

In other words, an ideologue favoring corporate America got himself appointed to the highest court in the land, and his legacy is that the court has become so pro-business that it is willing to turn over not just the judiciary, but all branches of government, to those with the most money.

If we don’t do a better job of getting the people to focus on this tragic and deeply corrupt march toward a corporatist America — and soon — we may as well start practicing our Mussolini salutes.

And now for something completely different: a movie we all can take some ironic delight in (and perhaps, finally, our marching orders). (And, no, it's not "Waiting for (the nonexistent) 'Superman.' ") This should be one of the best ones out there this holiday time along with Fair Game and Inside Job, which were released previously (unless you are avidly awaiting another movie about a fighter, networking or something touristy). Take a moment away from the bustle of holidaying and enjoy yourself. (And on a slightly different holiday note, didn't you enjoy hearing on the "news" the other night that your ever-increasing tax load will soon be paying for the huge charitable donations of your betters? Good for you! Funny how those betters look just like fairly mediocre people with a decided clever streak. Hope they'll make better decisions than you would with what they do with your money.) (Emphasis marks added - Ed.)

A Lesson for Wall St. About Failure December 19, 2010 It’s awards season again, and critics and the academy members are deciding on their top film picks of the year. But in many corners of the business community, the issue is already settled: “Waiting for ‘Superman’ ” is the year’s must-see film.

On Wall Street and on Silicon Valley office campuses, in hedge fund boardrooms and at year-end Christmas parties, it seems you can’t have a conversation without someone talking about the movie that finally lays bare America’s public education crisis.“Waiting for ‘Superman’ ” is one thing that Bill Gates, Steve Jobs and Mark Zuckerberg agree on, Rupert Murdoch talks about to anyone who will listen, David Koch of Koch Industries promotes, and Paul Tudor Jones and many of his hedge fund brethren work to support. “Waiting for ‘Superman’ ” follows five children and their parents as they run a gantlet to gain access to high-performing charter schools because the alternative — the public system — is a complete disaster. The film has caught the imagination of the business community because it represents a reckoning for public education and its chronic failures, making the very businesslike case that large school systems and the unions that go with them must be replaced by a customized, semi-privatized education in the form of charter schools.

Which is odd when you think about it. If you are looking for an American institution that failed the public, made resources disappear without returning value and lacked accountability for its manifest sins, the Education Department would be in line well behind Wall Street.

By now, the notion that business is a place built on accountability and performance should be as outdated as the one-room schoolhouse. Ask yourself, what would happen if American public schools were offered hundreds of billions in bailout money? One outcome is not in the cards: its leaders would not end up back at the trough so quickly, sucking up tens of millions in bonuses as Wall Street has.

If the captains of American business are looking for a holiday movie, I have another suggestion for them. I’m not talking about “Inside Job,” which is a scabrous take on the well-documented story of how the American economy was nearly tipped over by business greed and incompetence. Nah, I’d buy them a bucket of popcorn and sit them in front of “The Company Men,” a moody and elegiac feature film starring Ben Affleck, Tommy Lee Jones and Chris Cooper as businessmen who have a moment of clarity about how American business lost its soul.

As executives at GTX, a fictitious multinational corporation involved in the transportation business, among other endeavors, they watch as many of their colleagues are laid off to meet inflated earnings targets and as numbers get ginned up to keep the stock price growing and potential acquirers at bay. And then their turn comes.

At that point, “The Company Men” becomes a film about the loss of privilege: Porsches are sold and driven away, access to the private golf club is denied and suburban mansions go on the market. But the movie delivers, over and over, a message that far from being a center of American know-how and ingenuity, much of modern business is now preoccupied with goosing the share price and tricking up the year-end bonus — about getting over by getting by.

The film manages to use the tableau of a bunch of rich guys losing their jobs to reach a fundamental question of this economic age. How can it be that both corporate profits and unemployment are simultaneously high? “When I made the film, I had hoped it would be a historical document, a portrait of a very bad moment in American economic history,” said John Wells, an executive producer of the television series “ER” and the director of “The Company Men,” who began working on the film in 2007.

“Unfortunately, it didn’t turn out that way.”

“The Company Men” reflects that America is no longer in the business of building and making actual physical objects. Instead, all the energy and resources go into the kind of financial engineering that creates quarterly numbers that Wall Street buys into. Mr. Wells said that he spent a great deal of time talking with chief executives who run large concerns like his movie’s fictional GTX and said only so much of the blame can be laid at the corner office.

“They are responding to the needs of the market, to the institutional investors — the large mutual funds , the money market funds,” he said. “And when you think about it, that implicates all of us because we are all investing in the market one way or another.”

The movie resonates in the current moment because each day it becomes more clear that the guy at the bar who mutters into his whisky glass about the game being rigged is probably right.

On Dec. 12, my colleague Louise Story chronicled how nine men from various banks meet in secret every month to oversee, and in some aspects control, trading in derivatives, the arcane and often lucrative financial instruments that are used to hedge risk. As her article makes clear, the opacity and secrecy of the systems give banks the upper hand and leaves at their whim the market’s less pedigreed players.

It is a small slice of a large problem of self-dealing and self-enrichment on Wall Street, often at the expense of the rest of us. Decisions made there land hard in the middle places where most of America lives and works.

“You know that show ‘Undercover Boss?’ ” Mr. Wells asked, referring to the hit television show on CBS. “I’d like to see a show called ‘Undercover Investor’ where investors go undercover and get a good look at the companies that are being decimated by restructuring plays and roll-ups.”He added: “I think so many people are seeing business and how it is conducted in the abstract that they have no idea about how these decisions play out.”

And what the heck has happened to "net neutrality?"

I think I'm smelling that Michael Powell ratty essence again.

Suzan __________________

When Zombies Win - Can We Save Social Security From Its "Friends?" (Stopping Obama's Next Bad Deal) "Abortion of" Health Care Plan Industry's Idea

In The Woodshed we find our definitive and timely Christmas message.

Charles Dickens was right.

"Forgive me if I am not justified in what I ask,'' said Scrooge, looking intently at the Spirit's robe, "but I see something strange, and not belonging to yourself, protruding from your skirts. Is it a foot or a claw!''

"It might be a claw, for the flesh there is upon it,'' was the Spirit's sorrowful reply. "Look here.''

From the foldings of its robe, it brought two children; wretched, abject, frightful, hideous, miserable. They knelt down at its feet, and clung upon the outside of its garment. "Oh, Man! look here. Look, look, down here!'' exclaimed the Ghost.

They were a boy and girl. Yellow, meagre, ragged, scowling, wolfish; but prostrate, too, in their humility. Where graceful youth should have filled their features out, and touched them with its freshest tints, a stale and shrivelled hand, like that of age, had pinched, and twisted them, and pulled them into shreds. Where angels might have sat enthroned, devils lurked, and glared out menacing. No change, no degradation, no perversion of humanity, in any grade, through all the mysteries of wonderful creation, has monsters half so horrible and dread.

Scrooge started back, appalled. Having them shown to him in this way, he tried to say they were fine children, but the words choked themselves, rather than be parties to a lie of such enormous magnitude.

"Spirit! are they yours?'' Scrooge could say no more.

"They are Man's,'' said the Spirit, looking down upon them.

"And they cling to me, appealing from their fathers. This boy is Ignorance. This girl is Want. Beware them both, and all of their degree, but most of all beware this boy, for on his brow I see that written which is Doom, unless the writing be erased. Deny it!'' cried the Spirit, stretching out its hand towards the city.

"Slander those who tell it ye! Admit it for your factious purposes, and make it worse! And bide the end!''

"Have they no refuge or resource?'' cried Scrooge.

"Are there no prisons?'' said the Spirit, turning on him for the last time with his own words.

"Are there no workhouses?''

Evidently, not enough . . . yet. (Emphasis marks added - Ed.)

When Zombies Win December 19, 2010

Paul Krugman When historians look back at 2008-10, what will puzzle them most, I believe, is the strange triumph of failed ideas. Free-market fundamentalists have been wrong about everything — yet they now dominate the political scene more thoroughly than ever. How did that happen? How, after runaway banks brought the economy to its knees, did we end up with Ron Paul, who says “I don’t think we need regulators,” about to take over a key House panel overseeing the Fed? How, after the experiences of the Clinton and Bush administrations — the first raised taxes and presided over spectacular job growth; the second cut taxes and presided over anemic growth even before the crisis — did we end up with bipartisan agreement on even more tax cuts? The answer from the right is that the economic failures of the Obama administration show that big-government policies don’t work. But the response should be, what big-government policies?

For the fact is that the Obama stimulus — which itself was almost 40 percent tax cuts — was far too cautious to turn the economy around. And that’s not 20-20 hindsight: many economists, myself included, warned from the beginning that the plan was grossly inadequate. Put it this way: A policy under which government employment actually fell, under which government spending on goods and services grew more slowly than during the Bush years, hardly constitutes a test of Keynesian economics. Now, maybe it wasn’t possible for President Obama to get more in the face of Congressional skepticism about government. But even if that’s true, it only demonstrates the continuing hold of a failed doctrine over our politics. It’s also worth pointing out that everything the right said about why Obamanomics would fail was wrong. For two years we’ve been warned that government borrowing would send interest rates sky-high; in fact, rates have fluctuated with optimism or pessimism about recovery, but stayed consistently low by historical standards. For two years we’ve been warned that inflation, even hyperinflation, was just around the corner; instead, disinflation has continued, with core inflation — which excludes volatile food and energy prices — now at a half-century low. The free-market fundamentalists have been as wrong about events abroad as they have about events in America — and suffered equally few consequences. “Ireland,” declared George Osborne in 2006, “stands as a shining example of the art of the possible in long-term economic policymaking.” Whoops. But Mr. Osborne is now Britain’s top economic official. And in his new position, he’s setting out to emulate the austerity policies Ireland implemented after its bubble burst. After all, conservatives on both sides of the Atlantic spent much of the past year hailing Irish austerity as a resounding success. “The Irish approach worked in 1987-89 — and it’s working now,” declared Alan Reynolds of the Cato Institute last June. Whoops, again. But such failures don’t seem to matter. To borrow the title of a recent book by the Australian economist John Quiggin on doctrines that the crisis should have killed but didn’t, we’re still — perhaps more than ever — ruled by “zombie economics.” Why? Part of the answer, surely, is that people who should have been trying to slay zombie ideas have tried to compromise with them instead. And this is especially, though not only, true of the president. People tend to forget that Ronald Reagan often gave ground on policy substance — most notably, he ended up enacting multiple tax increases. But he never wavered on ideas, never backed down from the position that his ideology was right and his opponents were wrong. President Obama, by contrast, has consistently tried to reach across the aisle by lending cover to right-wing myths. He has praised Reagan for restoring American dynamism (when was the last time you heard a Republican praising F.D.R.?), adopted G.O.P. rhetoric about the need for the government to tighten its belt even in the face of recession, offered symbolic freezes on spending and federal wages. None of this stopped the right from denouncing him as a socialist. But it helped empower bad ideas, in ways that can do quite immediate harm. Right now Mr. Obama is hailing the tax-cut deal as a boost to the economy — but Republicans are already talking about spending cuts that would offset any positive effects from the deal. And how effectively can he oppose these demands, when he himself has embraced the rhetoric of belt-tightening? Yes, politics is the art of the possible. We all understand the need to deal with one’s political enemies. But it’s one thing to make deals to advance your goals; it’s another to open the door to zombie ideas. When you do that, the zombies end up eating your brain — and quite possibly your economy too.

Another of our most intelligent economists, Dean Baker, has more than a few words to enlighten us about Obama's next bad deal: the Social Security Sellout.

Saving Social Security: Stopping Obama's Next Bad Deal

Dean Baker President Obama insists that he is a really bad negotiator, therefore the deal he got on the 2-year extension of the Bush tax cuts and the 1-year extension of UI benefits was the best that he could do. This package also came with a 1-year cut in the Social Security tax.

This cut will seriously threaten the program’s finances if next year, the Republican Congress is no more willing to end a temporary tax cut than this year’s Democratic Congress.

The logic here is straightforward. Under the law, the Bush tax cuts were supposed to end in 2010. Tax rates returned to their pre-tax cut levels in 2011. However, the Republicans maintained a steady drumbeat about the evils of raising taxes in the middle of a downturn, even if the tax increase would just apply to the richest 2 percent of the population. As we saw, President Obama and the Democratic Congress could not muster the votes needed to overcome the Republicans and ended up extending the tax cuts for the richest 2 percent of the population. The Democrats will be faced with a similar situation at the end of 2011 when the Social Security tax cut is scheduled to expire, except that this time the tax cut in question will apply to overwhelming majority of working people. Also, the House will be controlled by the Republicans and the Senate will be considerably less Democratic. This raises the possibility, if not the likelihood, that the tax cut will remain in place indefinitely, more than doubling the size of Social Security’s projected long-term shortfall. Before we even get to this juncture the Republicans will have another opportunity to impose a really bad deal on President Obama. Sometime in the spring the government will run up against its debt ceiling. This will prevent the government from any further borrowing. Since the government has a substantial deficit, with spending exceeding revenue, hitting this limit would mean that the government would not have sufficient funds to pay for all its programs. It also would mean that the government could not pay interest or principle on debt that is coming due; in effect requiring it to default on its debt.

The prospect of the U.S. government defaulting on its debt creates the sort of end of the world scenario in which Congress rushed to pass the TARP in 2008. Back then, President Bush, Fed Chairman Ben Bernanke and all sorts of other luminaries told members of Congress and the public that we would have a second Great Depression if the Wall Street banks were not immediately bailed out, no questions asked. And the money flowed.

The prospect of defaulting on the debt will create a similar outbreak of shrill warnings of disaster. This would likely to lead to scenario in which President Obama signs whatever debt ceiling package House Republicans hand him, even if it includes the privatization of Social Security and Medicare and major cuts and/or elimination of other important programs.

The argument from the administration will be that they have no choice.

In order to avoid this train wreck, supporters of Social Security and Medicare have to restructure the options. They have to push President Obama to announce in advance that he will never sign a debt ceiling bill that includes cuts to Social Security and Medicare, the countries two most important social programs.

These programs are crucial to the financial security and health of tens of millions of people. If there are to be changes in these programs then they should occur after a full public debate in the light of day, not as the result of Republican trickery and parliamentary game playing.

This would be a hugely popular position since not only Democrats, but also independents and even Tea Party Republicans overwhelming support Social Security and Medicare. Furthermore, the gun, in the form of a potential debt default, is actually pointed at the Wall Street banks, not the public.

A debt default would be a very bad situation and one that we absolutely should try to avoid. But the day after the default, the country would still have the same capital stock and infrastructure, the same skilled labor force and the same technical knowledge as it did the day before the default. In other words, the ability of our economy to produce more than $15 trillion in goods and services each year will not have been affected.

One thing that would not be around the day after a default is Wall Street. The default would wipe out the value the assets of the Wall Street banks, sending Goldman Sachs, Citigroup and the rest into bankruptcy. The recovery for the economy from such a situation will be difficult, but the shareholders of the Wall Street banks would be wiped out and their top executives unemployed.

For this reason, the threat of a default is a gun pointed most directly at Wall Street. Given the power of Wall Street over Congress, is inconceivable that they would ever let the Republicans pull the trigger. This means that if President Obama is prepared to take the right and popular position of supporting Social Security and Medicare, he will win. This is both good policy and great politics. The public just has to force President Obama to stand up and show some leadership.

Finally we get a powerful argument about the Obama Health Care Debacle and whom he must be actually working for from Professor David Michael Green at the Regressive Antidote (emphasis marks added - Ed.):

For me . . . it gets even worse, because I think this particular product is entirely worthless and unnecessary, and that the corporations selling it are therefore parasitical in the extreme. And that, of course, is on a good day. In reality, these bastards in health insurance companies are amoral sociopathic monsters who maximize their profits by minimizing the care they deliver to sick and desperate human beings, as has been fully documented now by several former executives from the industry. These are the lowest of the low, barely less disgusting (I’m pretty sure) than hit men, pedophiles, Klansmen and right-wing radio hosts (apologies for the redundancies).

. . . we got this abortion of a health care plan because it served the interests of the health insurance industry. Obama did a deal with them before he did anything else in his endlessly protracted and astonishingly embarrassing legislative process. While he was telling progressives he was seeking a public option in the bill, he had already promised the insurance predators that that would never happen. He was simply and knowingly stringing along the hapless liberals who just happen to have been responsible for getting him his presidency. This isn’t just idle speculation, or even informed conjecture, by the way. It was recently revealed to the public by former Senate Majority Leader Tom Daschle, one of Barack’s best pals, and a key actor in the process.

. . . In the spirit of the season, let us tell the tale of the Political Ghosts of Christmas Past, Present and Future. The Political Ghost of Christmas Present showed up in Washington this week to pass an 800 billion dollar tax cut package, a very large chunk of which goes to a very small minority of very rich Americans. That’s a real bummer, given that the distribution of wealth in this country is now so skewed that we make banana republics of the 19th century look good by comparison. I don’t know where that leaves us. Maybe a banana slug republic?

Oh well, at least that’s the total extent of the damage. I mean, it’s not like we’re in tough financial shape or anything, where such a move would represent the very height of fiscal irresponsibility. It’s not like we have to borrow the money to pay for these tax gifts to the wealthy – making them, in reality, tax burden transfers to the less wealthy, and to our children and grandchildren – or anything like that.

It’s not like the histrionics of the Democrats in Congress, mounting a faux, five-minute insurrection against the deal and against their own president, don’t emphatically demonstrate once and for all that voters in America have a choice, every time they enter the ballot box, between the Party of Shameless Corporate Hack Assholes That Tries To Pretend It Isn’t, on the one hand, and the Party of Shameless Corporate Hack Assholes That Tries A Little Harder To Pretend It Isn’t, on the other.

And it’s not like there will be any real-world consequences to this latest chapter in the sordid fiscal history of the last thirty years, or anything. A month from now we’ll see the president in his State of the Union address once again linking arms with the (out) Republicans, telling us that we must cut Medicare and Social Security and infrastructure and government payrolls, so that we can afford these yet more gigantic tax cuts for the wealthy, disastrous and murderous wars across the Middle East, and a military budget the size of the rest of the planet, combined.

Now we see the “starve the beast” long-haul strategy of the oligarchs about to reach its full fruition. The debt was always intentional. It was the only way to pry out of the cold, stiff fingers of Americans the programs they favor so much they are referred to as the third rail of American politics.

All of which brings us to the Political Ghost of Christmas Future, who showed up a bit early this season. Wanna know what a once proud and prosperous country is going to look like after the plutocratic marauders from both parties and both ends of Pennsylvania Avenue get done with it? The New York Times gave us a little preview this week in an article entitled “Los Angeles Schools, Facing Budget Cuts, Decide to Seek Corporate Sponsors”. Here’s the first sentence: “The football field at a public school here, in the second largest school district in the country, soon may be brought to students by Nike.”

Well, you gotta love that, doncha? And if that’s the case, you can imagine what follows. Teachers telling students, “Alright, open your Microsoft Math Text to page 47, everybody, and let’s do story problem number seven, brought to you by Home Depot”. Recess will become “McDonalds’ You Deserve A Break Time”. And those needing a bathroom break will be issued special “Charmin Courtesy Wipes”. Once everything in our alleged culture has been completely commodified, regressives will be in heaven. They almost deserve it, too, given how hard they’ve worked to wreck the country these last three decades.

Great stuff, to be sure, but I was more impressed this week with the appearance by the Political Ghost of Christmas Past. That particular nightmare came in the corporeal (not to mention corporate) form of one Henry E. Hudson, justice of the Federal District Court in Richmond, Virginia. Like any good regressive, Justice Hudson abandoned all but the pretense of judicial restraint in order to strike down Barack Obama’s centerpiece health care legislation as unconstitutional.

As a side note, this ruling by the George W. Bush appointee, along with two opposing rulings in two other courts by Democratic appointees, reaffirm the absurdity our lawmaking system has become by giving courts the power of judicial review – that is, the power to strike down legislation on the basis of its supposed constitutional infirmities. If courts did that merely to protect minorities from biased majorities, that would be one thing.

Nowadays, however, they – and especially the current Supreme Court – use this power chiefly to protect hyper-minorities (that is, the ultra-rich) from any remote semblance of subjugation to the wider public interest. These courts act as mini-legislatures, and unelected and un-unelectable ones at that, making them profoundly anti-democratic institutions, and making the democracy they act within not a democracy at all to the extent this goes on. Other democracies don’t empower courts in this fashion, and we shouldn’t either.

But, like I said, that’s a side note. What I really want to say – and this may surprise you – is that I could hardly agree more with my right-wing friend, Justice Hudson.

Not on constitutional grounds, mind you. That particular document has plenty of wiggle room built into it, so that it can be read nearly any way one wants. Not for nothing do they call the operative phrase here “the elastic clause”. And, anyhow, I’m weary of the fetishism of constitutional worship we constantly indulge in around these parts. Look, if I want my life to be ruled over by the ideas and interests of sexist, elitist, slave-owning aristocrats from the eighteenth century, I’ll be sure to say so. In the meantime, is it really too much to say that we should make policy in the twenty-first century based on the needs and values of people actually living in the twentieth-first century?

But leave all that aside (which is exactly what Justice Hudson did, of course – he just won’t admit it). The reason I agree with this decision is because I agree that the Obama health care plan is fundamentally and profoundly flawed in its design, and egregiously so, to the extent that it should not be the law of the land. What I object to – and what Justice Hudson also objected to, though no doubt driven by very different motivations – is the core mechanism at the heart of Obama’s Obomination, the idea that the government can force individuals to buy a product from some private sector vendor.

For me – as opposed to the judge, I’m sure – it gets even worse, because I think this particular product is entirely worthless and unnecessary, and that the corporations selling it are therefore parasitical in the extreme. And that, of course, is on a good day. In reality, these bastards in health insurance companies are amoral sociopathic monsters who maximize their profits by minimizing the care they deliver to sick and desperate human beings, as has been fully documented now by several former executives from the industry. These are the lowest of the low, barely less disgusting (I’m pretty sure) than hit men, pedophiles, Klansmen and right-wing radio hosts (apologies for the redundancies).

As it happens, I am one of the lucky ones in this country who has a job that includes a decent health plan benefit, so this aspect of Obama’s debauchery doesn’t apply to me personally, though of course that may not always be the case. But why should I or any one else be forced to engage in this sort of commerce against our will? Why, especially in a supposed free market system, should anyone be compelled to purchase a product or service of any kind that they don’t want, and worse, to enrich a corporation they abhor?

The answer, of course, is either because Barack Obama is a corporate water-carrier who could give Dick Cheney a run for his (actually, our) money, or he is a spineless chickenshit Democrat (again, apologies for the redundancies) who makes Harry Reid look like Conan The Barbarian by comparison. Or he is both.

Either way, we got this abortion of a health care plan because it served the interests of the health insurance industry.

Obama did a deal with them before he did anything else in his endlessly protracted and astonishingly embarrassing legislative process.

While he was telling progressives he was seeking a public option in the bill, he had already promised the insurance predators that that would never happen. He was simply and knowingly stringing along the hapless liberals who just happen to have been responsible for getting him his presidency. This isn’t just idle speculation, or even informed conjecture, by the way. It was recently revealed to the public by former Senate Majority Leader Tom Daschle, one of Barack’s best pals, and a key actor in the process.

And it must be true, else the industry would have stopped at nothing to destroy the plan. But what was not for the insurance thieves to like? All serious public sector competition for their parasitical industry is wiped away, and they are guaranteed 30 or 40 million new customers, forced to buy their tainted and deficient wares.

These are (alleged) people who will crush anyone or anything that gets in the way of their massive profits, just as they did in the case of the Clinton plan in 1993.

It is inconceivable that they would have failed to seek the obliteration of the Obama plan unless it was a sweet deal for them, as it manifestly is.

Who wouldn’t want a guaranteed monopoly against the prospect of real competition from a non-profit government plan? In fact this is better than a monopoly. This isn’t just the absence of competition, this is a Bataan Death March forced customer base, to the tune of tens of millions of people.

Barry the Play President would tell you that he had to do this deal, because there just weren’t enough votes for a public option. Of course, he told you that he was trying to get one when he wasn’t, and he told you that he would close Gitmo in a year and he didn’t, and he campaigned on change you could believe in and delivered neither.

So he’s not exactly a paragon of credibility anymore. The best case scenario is that he just doesn’t get the real power of the presidency, which is to persuade, and thus to make votes appear where they didn’t previously exist. Indeed, he shows evidence of this profound political ignorance and/or timidity every day.

That may be the explanation, but on the other hand there’s the worst case scenario, which is that there isn’t a dime’s worth of difference between him and the likes of Mitch McConnell, except that Obama has a D after his name and the Two-Toed Bespectacled Tree Sloth from Kentucky has an R after his.

Hard to tell most days which it is with Obama, but the smart money has to be on the smart money. Chances are good that he’s just another bought off politician gone to Washington to do the bidding of the overclass. Except for the fact that some of us of Boomer vintage or older have still not fully adjusted to the new reality of both parties representing the same predatory class, this is, sadly, just another “Dog Bites Man” story.

In any case, it doesn’t really matter what’s going on here. Either explanation, it’s heads they win, tails we lose.

This case is obviously now headed to the Supreme Court, and I’d be pretty surprised, really, if the Court doesn’t toss out Obama’s plan as unconstitutional. That would be bold, but not unprecedented, as regularly occurred in the early days of the New Deal.

Moreover, regressives today are the very personification of boldness, and that certainly speaks for the Five Horsemen of the Apocalypse on the top bench. Look at Citizens United or Bush vs. Gore if you have any doubt of that. And look at the front-page headline of the New York Times this week: “Justices Offer Receptive Ear to Business Interests”. Now there’s a shocker, buddy, eh? That one rises fully to the “Dog Bites Man, Takes Long Nap” level of shocking, y’know?

So, the likely denouement for Stupid Barack is that his much-touted great achievement winds up in the garbage can, and we wind up with the crappy health care system we have, so bad that the richest country on the planet is ranked 37th globally by the World Health Organization.

Meanwhile, the right has gone from death’s door two years ago to control of the House, effective control of the Senate, and an easy shot at the White House in 2012, in large part because of the way President Pattycake played the politics of his big reform.

These are the wages of sin.

There is, alternatively, a simple way to do health care in America. It is the same system nearly every other country in the industrialized world has been using for the better part of a century, with astonishing levels of success if you compare the public health of those years to prior centuries. It’s the same system we in this country already use for seniors, who tend to adore their Medicare, thank you very much.

It’s the same system we use for national defense, that most of our communities use for fire and police, and that we employ for other forms of basic security. It’s simple: everyone pays in, everyone is covered, nobody profits off our insecurities.

The fact that we don’t do health care that way is partly a historical artifact having to do with wage and price controls during World War II, which lead to employers offering health care as a fringe benefit. But there are two other parts. One is the enormous profits made by insurance companies today, who benefit off of people’s worry about sickness, and all too often off of not providing the services subscribers paid for and desperately need. And the other is a political class whose behavior ranges from gutless to bought-off, leaning heavily toward the latter.

I certainly agree that it would have been a fairly substantial political and societal leap for Obama to have proposed a shift to a European-style government-financed health care system, albeit less so if he would have had the wisdom to market it simply as “Medicare For All”.

If you want to argue that a jump of that magnitude would have been impossible to sell in 2009, the proper use of the bully pulpit notwithstanding, you might be able to convince me of that. But what he certainly could have done instead is essentially the public option. And he could have made it attractive to businesses to buy a government plan rather than what the private sector offers. And then people could see which is better, and vote with their pocketbooks.

In rather a short amount of time, I would surmise, the health insurance industry would go out of business, except for offering boutique supplemental policies to the wealthy. People would follow their wallets, and they would see that big bad government health care is just as (not) evil as big bad Medicare is for seniors.

But Obama didn’t go down this path. Instead, he served the interests of the insurance industry, and now the whole thing is going to blow up in his face. And it should.

First, because it is wrong on principle. I don’t at all want the government telling me whose private sector product I have to buy. Progressives should be especially wary of this precedent. With oligarch-owned regressives making policy in every institution of American government now, think what the right could do with this concept if it is enshrined in American law. Think of the products and services you don’t want that you might be forced to buy in order to further profit the already wealthy.

Think especially about the insurances you could be compelled to purchase, against concerns that don’t threaten you. Thanks very much for the government-mandated compulsory purchase concept, but definitely no thanks.

And, second, this thing should blow up in Obama’s face because he is a disastrous president whose career and reputation deserve to be wrecked.

Of course, that just leaves one small problem.

There are 300 million of us who live in the richest country on Earth but continue to have a health care system ranked just below Dominica and Costa Rica.

Suzan ________________