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 ________________