Tuesday, September 4, 2012

Goodbye to All That: Reflections of a GOP Operative Who Left the Cult (No "Minimum" Wage Rethuglican Xtians Arise) & John Cusack Says "Whaa?" To Continuation of Bush Policies Being Wise



Remember our goooood Rethuglican business-loving, Xtian friends?

They love doing business in the Marianas (for some reason) and other no-regulations areas.

No Minimum Wage for the Mariana Islands?


And I've always admired John Cusack's thinking (especially since Grosse Point Blank).

John Cusack Interviews Law Professor Jonathan Turley About Obama Administration’s War On the Constitution


 And do we sooooo loooong for riches that we forgive the rich for buying our government (and bringing an end to the middle class)?

Money in Politics: Where Is the Outrage?

How Americans for Prosperity Will Keep Hiding Donors in Shifting Election Landscape, but Retain Tax-Exempt Status

Cut the Pentagon Budget, Not Social Security and Veterans' Benefits, Save 380,000 Jobs

 Romney's Secret? Greed, Debt and Forcing Others to Foot the Bill

Matt Taibbi at Skylight Studio in New York, 10/27/10. (photo: Neilson Barnard/Getty Images)
Amy Goodman, Democracy Now!
Excerpt: "You know, there's that tenet of some forms of extreme Muslim religions where it's OK to lie to the infidel. And I think Mitt Romney has a little bit of that."
READ MORE

Goodbye to All That: Reflections of a GOP Operative Who Left the Cult

Saturday, 03 September 2011 
Mike Lofgren, Truthout | News Analysis
Barbara Stanwyck: "We're both rotten!"
Fred MacMurray: "Yeah - only you're a little more rotten." -"Double Indemnity" (1944)
Those lines of dialogue from a classic film noir sum up the state of the two political parties in contemporary America. Both parties are rotten - how could they not be, given the complete infestation of the political system by corporate money on a scale that now requires a presidential candidate to raise upwards of a billion dollars to be competitive in the general election? Both parties are captives to corporate loot. The main reason the Democrats' health care bill will be a budget buster once it fully phases in is the Democrats' rank capitulation to corporate interests - no single-payer system, in order to mollify the insurers; and no negotiation of drug prices, a craven surrender to Big Pharma.

But both parties are not rotten in quite the same way. The Democrats have their share of machine politicians, careerists, corporate bagmen, egomaniacs and kooks. Nothing, however, quite matches the modern GOP.

To those millions of Americans who have finally begun paying attention to politics and watched with exasperation the tragicomedy of the debt ceiling extension, it may have come as a shock that the Republican Party is so full of lunatics. To be sure, the party, like any political party on earth, has always had its share of crackpots, like Robert K. Dornan or William E. Dannemeyer. But the crackpot outliers of two decades ago have become the vital center today: Steve King, Michele Bachman (now a leading presidential candidate as well), Paul Broun, Patrick McHenry, Virginia Foxx, Louie Gohmert, Allen West. The Congressional directory now reads like a casebook of lunacy.

It was this cast of characters and the pernicious ideas they represent that impelled me to end a nearly 30-year career as a professional staff member on Capitol Hill. A couple of months ago, I retired; but I could see as early as last November that the Republican Party would use the debt limit vote, an otherwise routine legislative procedure that has been used 87 times since the end of World War II, in order to concoct an entirely artificial fiscal crisis. Then, they would use that fiscal crisis to get what they wanted, by literally holding the US and global economies as hostages.

The debt ceiling extension is not the only example of this sort of political terrorism. Republicans were willing to lay off 4,000 Federal Aviation Administration (FAA) employees, 70,000 private construction workers and let FAA safety inspectors work without pay, in fact, forcing them to pay for their own work-related travel - how prudent is that? - in order to strong arm some union-busting provisions into the FAA reauthorization.

Everyone knows that in a hostage situation, the reckless and amoral actor has the negotiating upper hand over the cautious and responsible actor because the latter is actually concerned about the life of the hostage, while the former does not care. This fact, which ought to be obvious, has nevertheless caused confusion among the professional pundit class, which is mostly still stuck in the Bob Dole era in terms of its orientation.
For instance, Ezra Klein wrote of his puzzlement over the fact that while House Republicans essentially won the debt ceiling fight, enough of them were sufficiently dissatisfied that they might still scuttle the deal. Of course they might - the attitude of many freshman Republicans to national default was "bring it on!"

It should have been evident to clear-eyed observers that the Republican Party is becoming less and less like a traditional political party in a representative democracy and becoming more like an apocalyptic cult, or one of the intensely ideological authoritarian parties of 20th century Europe. This trend has several implications, none of them pleasant.

In his "Manual of Parliamentary Practice," Thomas Jefferson wrote that it is less important that every rule and custom of a legislature be absolutely justifiable in a theoretical sense, than that they should be generally acknowledged and honored by all parties. These include unwritten rules, customs and courtesies that lubricate the legislative machinery and keep governance a relatively civilized procedure. The US Senate has more complex procedural rules than any other legislative body in the world; many of these rules are contradictory, and on any given day, the Senate parliamentarian may issue a ruling that contradicts earlier rulings on analogous cases.

The only thing that can keep the Senate functioning is collegiality and good faith. During periods of political consensus, for instance, the World War II and early post-war eras, the Senate was a "high functioning" institution: filibusters were rare and the body was legislatively productive. Now, one can no more picture the current Senate producing the original Medicare Act than the old Supreme Soviet having legislated the Bill of Rights.

Far from being a rarity, virtually every bill, every nominee for Senate confirmation and every routine procedural motion is now subject to a Republican filibuster. Under the circumstances, it is no wonder that Washington is gridlocked:  legislating has now become war minus the shooting, something one could have observed 80 years ago in the Reichstag of the Weimar Republic. As Hannah Arendt observed, a disciplined minority of totalitarians can use the instruments of democratic government to undermine democracy itself.

John P. Judis sums up the modern GOP this way:

"Over the last four decades, the Republican Party has transformed from a loyal opposition into an insurrectionary party that flouts the law when it is in the majority and threatens disorder when it is the minority. It is the party of Watergate and Iran-Contra, but also of the government shutdown in 1995 and the impeachment trial of 1999. If there is an earlier American precedent for today's Republican Party, it is the antebellum Southern Democrats of John Calhoun who threatened to nullify, or disregard, federal legislation they objected to and who later led the fight to secede from the union over slavery."
A couple of years ago, a Republican committee staff director told me candidly (and proudly) what the method was to all this obstruction and disruption. Should Republicans succeed in obstructing the Senate from doing its job, it would further lower Congress's generic favorability rating among the American people. By sabotaging the reputation of an institution of government, the party that is programmatically against government would come out the relative winner.

A deeply cynical tactic, to be sure, but a psychologically insightful one that plays on the weaknesses both of the voting public and the news media. There are tens of millions of low-information voters who hardly know which party controls which branch of government, let alone which party is pursuing a particular legislative tactic. These voters' confusion over who did what allows them to form the conclusion that "they are all crooks," and that "government is no good," further leading them to think, "a plague on both your houses" and "the parties are like two kids in a school yard." This ill-informed public cynicism, in its turn, further intensifies the long-term decline in public trust in government that has been taking place since the early 1960s - a distrust that has been stoked by Republican rhetoric at every turn ("Government is the problem," declared Ronald Reagan in 1980).

The media are also complicit in this phenomenon. Ever since the bifurcation of electronic media into a more or less respectable "hard news" segment and a rabidly ideological talk radio and cable TV political propaganda arm, the "respectable" media have been terrified of any criticism for perceived bias. Hence, they hew to the practice of false evenhandedness. Paul Krugman has skewered this tactic as being the "centrist cop-out." "I joked long ago," he says, "that if one party declared that the earth was flat, the headlines would read 'Views Differ on Shape of Planet.'"

Inside-the-Beltway wise guy Chris Cillizza merely proves Krugman right in his Washington Post analysis of "winners and losers" in the debt ceiling impasse. He wrote that the institution of Congress was a big loser in the fracas, which is, of course, correct, but then he opined: "Lawmakers - bless their hearts - seem entirely unaware of just how bad they looked during this fight and will almost certainly spend the next few weeks (or months) congratulating themselves on their tremendous magnanimity." Note how the pundit's ironic deprecation falls like the rain on the just and unjust alike, on those who precipitated the needless crisis and those who despaired of it. He seems oblivious that one side - or a sizable faction of one side - has deliberately attempted to damage the reputation of Congress to achieve its political objectives.

This constant drizzle of "there the two parties go again!" stories out of the news bureaus, combined with the hazy confusion of low-information voters, means that the long-term Republican strategy of undermining confidence in our democratic institutions has reaped electoral dividends.
The United States has nearly the lowest voter participation among Western democracies; this, again, is a consequence of the decline of trust in government institutions - if government is a racket and both parties are the same, why vote? And if the uninvolved middle declines to vote, it increases the electoral clout of a minority that is constantly being whipped into a lather by three hours daily of Rush Limbaugh or Fox News. There were only 44 million Republican voters in the 2010 mid-term elections, but they effectively canceled the political results of the election of President Obama by 69 million voters.

This tactic of inducing public distrust of government is not only cynical, it is schizophrenic. For people who profess to revere the Constitution, it is strange that they so caustically denigrate the very federal government that is the material expression of the principles embodied in that document. This is not to say that there is not some theoretical limit to the size or intrusiveness of government; I would be the first to say there are such limits, both fiscal and Constitutional. But most Republican officeholders seem strangely uninterested in the effective repeal of Fourth Amendment protections by the Patriot Act, the weakening of habeas corpus and self-incrimination protections in the public hysteria following 9/11 or the unpalatable fact that the United States has the largest incarcerated population of any country on earth. If anything, they would probably opt for more incarcerated persons, as imprisonment is a profit center for the prison privatization industry, which is itself a growth center for political contributions to these same politicians.[1] Instead, they prefer to rail against those government programs that actually help people. And when a program is too popular to attack directly, like Medicare or Social Security, they prefer to undermine it by feigning an agonized concern about the deficit. That concern, as we shall see, is largely fictitious.

Undermining Americans' belief in their own institutions of self-government remains a prime GOP electoral strategy. But if this technique falls short of producing Karl Rove's dream of 30 years of unchallengeable one-party rule (as all such techniques always fall short of achieving the angry and embittered true believer's New Jerusalem), there are other even less savory techniques upon which to fall back. Ever since Republicans captured the majority in a number of state legislatures last November, they have systematically attempted to make it more difficult to vote: by onerous voter ID requirements (in Wisconsin, Republicans have legislated photo IDs while simultaneously shutting Department of Motor Vehicles (DMV) offices in Democratic constituencies while at the same time lengthening the hours of operation of DMV offices in GOP constituencies); by narrowing registration periods; and by residency requirements that may disenfranchise university students.

This legislative assault is moving in a diametrically opposed direction to 200 years of American history, when the arrow of progress pointed toward more political participation by more citizens. Republicans are among the most shrill in self-righteously lecturing other countries about the wonders of democracy; exporting democracy (albeit at the barrel of a gun) to the Middle East was a signature policy of the Bush administration. But domestically, they don't want those people voting.

You can probably guess who those people are. Above all, anyone not likely to vote Republican. As Sarah Palin would imply, the people who are not Real Americans. Racial minorities. Immigrants. Muslims. Gays. Intellectuals. Basically, anyone who doesn't look, think, or talk like the GOP base. This must account, at least to some degree, for their extraordinarily vitriolic hatred of President Obama. I have joked in the past that the main administration policy that Republicans object to is Obama's policy of being black.[2] Among the GOP base, there is constant harping about somebody else, some "other," who is deliberately, assiduously and with malice aforethought subverting the Good, the True and the Beautiful: Subversives. Commies. Socialists. Ragheads. Secular humanists. Blacks. Fags. Feminazis. The list may change with the political needs of the moment, but they always seem to need a scapegoat to hate and fear.

It is not clear to me how many GOP officeholders believe this reactionary and paranoid claptrap. I would bet that most do not. But they cynically feed the worst instincts of their fearful and angry low-information political base with a nod and a wink. During the disgraceful circus of the "birther" issue, Republican politicians subtly stoked the fires of paranoia by being suggestively equivocal - "I take the president at his word" - while never unambiguously slapping down the myth. John Huntsman was the first major GOP figure forthrightly to refute the birther calumny - albeit after release of the birth certificate.

I do not mean to place too much emphasis on racial animus in the GOP. While it surely exists, it is also a fact that Republi cans think that no Democratic president could conceivably be legitimate. Republicans also regarded Bill Clinton as somehow, in some manner, twice fraudulently elected (well do I remember the elaborate conspiracy theories that Republicans traded among themselves). Had it been Hillary Clinton, rather than Barack Obama, who had been elected in 2008, I am certain we would now be hearing, in lieu of the birther myths, conspiracy theories about Vince Foster's alleged murder.

The reader may think that I am attributing Svengali-like powers to GOP operatives able to manipulate a zombie base to do their bidding. It is more complicated than that. Historical circumstances produced the raw material: the deindustrialization and financialization of America since about 1970 has spawned an increasingly downscale white middle class - without job security (or even without jobs), with pensions and health benefits evaporating and with their principal asset deflating in the collapse of the housing bubble. Their fears are not imaginary; their standard of living is shrinking.

What do the Democrats offer these people? Essentially nothing. Democratic Leadership Council-style "centrist" Democrats were among the biggest promoters of disastrous trade deals in the 1990s that outsourced jobs abroad: NAFTA, World Trade Organization, permanent most-favored-nation status for China. At the same time, the identity politics/lifestyle wing of the Democratic Party was seen as a too illegal immigrant-friendly by downscaled and outsourced whites.[3]

While Democrats temporized, or even dismissed the fears of the white working class as racist or nativist, Republicans went to work. To be sure, the business wing of the Republican Party consists of the most energetic outsourcers, wage cutters and hirers of sub-min imum wage immigrant labor to be found anywhere on the globe. But the faux-populist wing of the party, knowing the mental compartmentalization that occurs in most low-information voters, played on the fears of that same white working class to focus their anger on scapegoats that do no damage to corporations' bottom lines: instead of raising the minimum wage, let's build a wall on the Southern border (then hire a defense contractor to incompetently manage it). Instead of predatory bankers, it's evil Muslims. Or evil gays. Or evil abortionists.

How do they manage to do this? Because Democrats ceded the field. Above all, they do not understand language. Their initiatives are posed in impenetrable policy-speak: the Patient Protection and Affordable Care Act. The what? - can anyone even remember it? No wonder the pejorative "Obamacare" won out. Contrast that with the Republicans' Patriot Act. You're a patriot, aren't you? Does anyone at the GED level have a clue wh at a Stimulus Bill is supposed to be? Why didn't the White House call it the Jobs Bill and keep pounding on that theme?

You know that Social Security and Medicare are in jeopardy when even Democrats refer to them as entitlements. "Entitlement" has a negative sound in colloquial English: somebody who is "entitled" selfishly claims something he doesn't really deserve. Why not call them "earned benefits," which is what they are because we all contribute payroll taxes to fund them? That would never occur to the Democrats. Republicans don't make that mistake; they are relentlessly on message: it is never the "estate tax," it is the "death tax." Heaven forbid that the Walton family should give up one penny of its $86-billion fortune. All of that lucre is necessary to ensure that unions be kept out of Wal-Mart, that women employees not be promoted and that politicians be kept on a short leash.


It was not always thus. It would have been hard to find an uneducated farmer during the depression of the 1890s who did not have a very accurate idea about exactly which economic interests were shafting him. An unemployed worker in a breadline in 1932 would have felt little gratitude to the Rockefellers or the Mellons. But that is not the case in the present economic crisis. After a riot of unbridled greed such as the world has not seen since the conquistadors' looting expeditions and after an unprecedented broad and rapid transfer of wealth upward by Wall Street and its corporate satellites, where is the popular anger directed, at least as depicted in the media? At "Washington spending" - which has increased primarily to provide unemployment compensation, food stamps and Medicaid to those economically damaged by the previous decade's corporate saturnalia. Or the popular rage is harmlessly diverted against pseudo-issues: death panels, birtherism, gay marriage, abortion, and so on, none of which stands to dent the corporate bottom line in the slightest.

Thus far, I have concentrated on Republican tactics, rather than Republican beliefs, but the tactics themselves are important indicators of an absolutist, authoritarian mindset that is increasingly hostile to the democratic values of reason, compromise and conciliation. Rather, this mindset seeks polarizing division (Karl Rove has been very explicit that this is his principal campaign strategy), conflict and the crushing of opposition.

As for what they really believe, the Republican Party of 2011 believes in three principal tenets I have laid out below. The rest of their platform one may safely dismiss as window dressing:

1. The GOP cares solely and exclusively about its rich contributors. The party has built a whole catechism on the protection and further enrichment of America's plutocracy. Their caterwauling about deficit and debt is so much eyewash to con the public. Whatever else President Obama has accomplished (and many of his purported accomplishments are highly suspect), his $4-trillion deficit reduction package did perform the useful service of smoking out Republican hypocrisy. The GOP refused, because it could not abide so much as a one-tenth of one percent increase on the tax rates of the Walton family or the Koch brothers, much less a repeal of the carried interest rule that permits billionaire hedge fund managers to pay income tax at a lower effective rate than cops or nurses. Republicans finally settled on a deal that had far less deficit reduction - and even less spending reduction! - than Obama's offer, because of their iron resolution to protect at all costs our society's overclass.

Republicans have attempted to camouflage their amorous solicitude for billionaires with a fog of misleading rhetoric. John Boehner is fond of saying, "we won't raise anyone's taxes," as if the take-home pay of an Olive Garden waitress were inextricably bound up with whether Warren Buffett pays his ca pital gains as ordinary income or at a lower rate. Another chestnut is that millionaires and billionaires are "job creators." US corporations have just had their most profitable quarters in history; Apple, for one, is sitting on $76 billion in cash, more than the GDP of most countries. So, where are the jobs?

Another smokescreen is the "small business" meme, since standing up for Mom's and Pop's corner store is politically more attractive than to be seen shilling for a megacorporation. Raising taxes on the wealthy will kill small business' ability to hire; that is the GOP dirge every time Bernie Sanders or some Democrat offers an amendment to increase taxes on incomes above $1 million. But the number of small businesses that have a net annual income over a million dollars is de minimis, if not by definition impossible (as they would no longer be small businesses). And as data from the Center for Economic and Policy Research have shown, small businesses account for only 7.2 percent of total US employment, a significantly smaller share of total employment than in most Organisation for Economic Co-operation and Development (OECD) countries.

Likewise, Republicans have assiduously spread the myth that Americans are conspicuously overtaxed. But compared to other OECD countries, the effective rates of US taxation are among the lowest. In particular, they point to the top corporate income rate of 35 percent as being confiscatory Bolshevism. But again, the effective rate is much lower. Did GE pay 35 percent on 2010 profits of $14 billion? No, it paid zero.

When pressed, Republicans make up misleading statistics to "prove" that the America's fiscal burden is being borne by the rich and the rest of us are just freeloaders who don't appreciate that fact. "Half of Americans don't pay taxes" is a perennial meme. But what they leave out is that that statement refers to federal income taxes. There are millions of people who don't pay income taxes, but do contribute payroll taxes - among the most regressive forms of taxation. But according to GOP fiscal theology, payroll taxes don't count. Somehow, they have convinced themselves that since payroll taxes go into trust funds, they're not real taxes. Likewise, state and local sales taxes apparently don't count, although their effect on a poor person buying necessities like foodstuffs is far more regressive than on a millionaire.

All of these half truths and outright lies have seeped into popular culture via the corporate-owned business press. Just listen to CNBC for a few hours and you will hear most of them in one form or another. More important politically, Republicans' myths about taxation have been internalized by millions of economically downscale "values voters," who may have been attracted to the GOP for other reasons (which I will explain later), but who now accept this misinformation as dogma.

And when misinformation isn't enough t o sustain popular support for the GOP's agenda, concealment is needed. One fairly innocuous provision in the Dodd-Frank financial reform bill requires public companies to make a more transparent disclosure of CEO compensation, including bonuses. Note that it would not limit the compensation, only require full disclosure. Republicans are hell-bent on repealing this provision. Of course; it would not serve Wall Street interests if the public took an unhealthy interest in the disparity of their own incomes as against that of a bank CEO. As Spencer Bachus, the Republican chairman of the House Financial Services Committee, says, "In Washington, the view is that the banks are to be regulated and my view is that Washington and the regulators are there to serve the banks."

2. They worship at the altar of Mars. While the me-too Democrats have set a horrible example of keeping up with the Joneses with respect to waging wars, they can never match GOP stalwarts such as John McCain or Lindsey Graham in their sheer, libidinous enthusiasm for invading other countries. McCain wanted to mix it up with Russia - a nuclear-armed state - during the latter's conflict with Georgia in 2008 (remember? - "we are all Georgians now," a slogan that did not, fortunately, catch on), while Graham has been persistently agitating for attacks on Iran and intervention in Syria. And these are not fringe elements of the party; they are the leading "defense experts," who always get tapped for the Sunday talk shows. About a month before Republicans began holding a gun to the head of the credit markets to get trillions of dollars of cuts, these same Republicans passed a defense appropriations bill that increased spending by $17 billion over the prior year's defense appropriation. To borrow Chris Hedges' formulation, war is the force that gives meaning to their lives.

A cynic might conclude that this militaristic enthusiasm is no more complicated than the fact that Pentagon contractors spread a lot of bribery money around Capitol Hill. That is true, but there is more to it than that. It is not necessarily even the fact that members of Congress feel they are protecting constituents' jobs. The wildly uneven concentration of defense contracts and military bases nationally means that some areas, like Washington, DC, and San Diego, are heavily dependent on Department of Defense (DOD) spending. But there are many more areas of the country whose net balance is negative: the citizenry pays more in taxes to support the Pentagon than it receives back in local contracts.

And the economic justification for Pentagon spending is even more fallacious when one considers that the $700 billion annual DOD budget creates comparatively few jobs. The days of Rosie the Riveter are long gone; most weapons projects now require very little touch labor. Instead, a disproportionate share is siphoned off into high-cost research and development (from which the civilian economy benefits little); exorbitant management expenditures, overhead and out-and-out padding; and, of course, the money that flows back into the coffers of political campaigns. A million dollars appropriated for highway construction would create two to three times as many jobs as a million dollars appropriated for Pentagon weapons procurement, so the jobs argument is ultimately specious.

Take away the cash nexus and there still remains a psychological predisposition toward war and militarism on the part of the GOP. This undoubtedly arises from a neurotic need to demonstrate toughness and dovetails perfectly with the bell igerent tough-guy pose one constantly hears on right-wing talk radio. Militarism springs from the same psychological deficit that requires an endless series of enemies, both foreign and domestic.

The results of the last decade of unbridled militarism and the Democrats' cowardly refusal to reverse it[4], have been disastrous both strategically and fiscally. It has made the United States less prosperous, less secure and less free. Unfortunately, the militarism and the promiscuous intervention it gives rise to are only likely to abate when the Treasury is exhausted, just as it happened to the Dutch Republic and the British Empire.

3. Give me that old time religion. Pandering to fundamentalism is a full-time vocation in the GOP. Beginning in the 1970s, religious cranks ceased simply to be a mi nor public nuisance in this country and grew into the major element of the Republican rank and file. Pat Robertson's strong showing in the 1988 Iowa Caucus signaled the gradual merger of politics and religion in the party. The results are all around us: if the American people poll more like Iranians or Nigerians than Europeans or Canadians on questions of evolution versus creationism, scriptural inerrancy, the existence of angels and demons, and so forth, that result is due to the rise of the religious right, its insertion into the public sphere by the Republican Party and the consequent normalizing of formerly reactionary or quaint beliefs. Also around us is a prevailing anti-intellectualism and hostility to science; it is this group that defines "low-information voter" - or, perhaps, "misinformation voter."

The Constitution to the contrary notwithstanding, there is now a de facto religious test for the presidency: major candidates are encouraged (or coerced) to "share their feelings" about their "faith" in a revelatory speech; or, some televangelist like Rick Warren dragoons the candidates (as he did with Obama and McCain in 2008) to debate the finer points of Christology, with Warren himself, of course, as the arbiter. Politicized religion is also the sheet anchor of the culture wars. But how did the whole toxic stew of GOP beliefs - economic royalism, militarism and culture wars cum fundamentalism - come completely to displace an erstwhile civilized Eisenhower Republicanism?

It is my view that the rise of politicized religious fundamentalism (which is a subset of the decline of rational problem solving in America) may have been the key ingredient of the takeover of the Republican Party. For politicized religion provides a substrate of beliefs that rationalizes - at l east in the minds of followers - all three of the GOP's main tenets.
Televangelists have long espoused the health-and-wealth/name-it-and-claim it gospel. If you are wealthy, it is a sign of God's favor. If not, too bad! But don't forget to tithe in any case. This rationale may explain why some economically downscale whites defend the prerogatives of billionaires.
The GOP's fascination with war is also connected with the fundamentalist mindset. The Old Testament abounds in tales of slaughter - God ordering the killing of the Midianite male infants and enslavement of the balance of the population, the divinely-inspired genocide of the Canaanites, the slaying of various miscreants with the jawbone of an ass - and since American religious fundamentalist seem to prefer the Old Testament to the New (particularly that portion of the New Testament known as the Sermon on the Mount), it is but a short step to approving war as a divinely inspired mission. This sort of thinking has led, inexorably, to such phenomena as Jerry Falwell once writing that God is Pro-War.
It is the apocalyptic frame of reference of fundamentalists, their belief in an imminent Armageddon, that psychologically conditions them to steer this country into conflict, not only on foreign fields (some evangelicals thought Saddam was the Antichrist and therefore a suitable target for cruise missiles), but also in the realm of domestic political controversy. It is hardly surprising that the most adamant proponent of the view that there was no debt ceiling problem was Michele Bachmann, the darling of the fundamentalist right. What does it matter, anyway, if the country defaults? - we shall presently abide in the bosom of the Lord.
Some liberal writers have opined that the different socio-economic perspectives separating the "business" wing of the GOP and the religious right make it an unstable coalition that could crack. I am not so sure. There is no fundamental disagreement on which direction the two factions want to take the country, merely how far in that direction they want to take it. The plutocrats would drag us back to the Gilded Age, the theocrats to the Salem witch trials. In any case, those consummate plutocrats, the Koch brothers, are pumping large sums of money into Michele Bachman's presidential campaign, so one ought not make too much of a potential plutocrat-theocrat split.
Thus, the modern GOP; it hardly seems conceivable that a Republican could have written the following:
"Should any political party attempt to abolish social security, unemployment insurance and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires and an occasional politician or business man from other areas. Their number is negligible and they are stupid." (That was President Eisenhower, writing to his brother Edgar in 1954.)
It is this broad and ever-widening gulf between the traditional Republicanism of an Eisenhower and the quasi-totalitarian cult of a Michele Bachmann that impelled my departure from Capitol Hill. It is not in my pragmatic nature to make a heroic gesture of self-immolation, or to make lurid revelations of personal martyrdom in the manner of David Brock. And I will leave a more detailed dissection of failed Republican economic policies to my fellow apostate Bruce Bartlett.

I left because I was appalled at the headlong rush of Republicans, like Gadarene swine, to embrace policies that are deeply damagi ng to this country's future; and contemptuous of the feckless, craven incompetence of Democrats in their half-hearted attempts to stop them. And, in truth, I left as an act of rational self-interest. Having gutted private-sector pensions and health benefits as a result of their embrace of outsourcing, union busting and "shareholder value," the GOP now thinks it is only fair that public-sector workers give up their pensions and benefits, too. Hence the intensification of the GOP's decades-long campaign of scorn against government workers. Under the circumstances, it is simply safer to be a current retiree rather than a prospective one.

If you think Paul Ryan and his Ayn Rand-worshipping colleagues aren't after your Social Security and Medicare, I am here to disabuse you of your naiveté.[5] They will move heaven a nd earth to force through tax cuts that will so starve the government of revenue that they will be "forced" to make "hard choices" - and that doesn't mean repealing those very same tax cuts, it means cutting the benefits for which you worked.

During the week that this piece was written, the debt ceiling fiasco reached its conclusion. The economy was already weak, but the GOP's disgraceful game of chicken roiled the markets even further. Foreigners could hardly believe it: Americans' own crazy political actions were destabilizing the safe-haven status of the dollar. Accordingly, during that same week, over one trillion dollars worth of assets evaporated on financial markets. Russia and China have stepped up their advocating that the dollar be replaced as the global reserve currency - a move as consequential and disastrous for US interests as any that can be imagined.

If Republicans have perfected a new form of politics that is successful electorally at the same time that it unleashes major policy disasters, it means twilight both for the democratic process and America's status as the world's leading power.

Footnotes:

[1] I am not exaggerating for effect. A law passed in 2010 by the Arizona legislature mandating arrest and incarceration of suspected illegal aliens was actually drafted by the American Legislative Exchange Council, a conservative business front group that drafts "model" legislation on behalf of its corporate sponsors. The draft legislation in question was written for the private prison lobby, which sensed a growth opportunity in imprisoning more people.

[2] I am not a supporter of Obama and object to a number of his foreign and domestic policies. But when he took office amid the greatest financial collapse in 80 years, I wanted him to succeed, so that the country I served did not fail. But already in 2009, Mitch McConnell, the Senate Republican leader, declared that his greatest legislative priority was - jobs for Americans? Rescuing the financial system? Solving th e housing collapse? - no, none of those things. His top priority was to ensure that Obama should be a one-term president. Evidently Senator McConnell hates Obama more than he loves his country. Note that the mainstream media have lately been hailing McConnell as "the adult in the room," presumably because he is less visibly unstable than the Tea Party freshmen

[3] This is not a venue for immigrant bashing. It remains a fact that outsourcing jobs overseas, while insourcing sub-minimum wage immigrant labor, will exert downward pressure on US wages. The consequence will be popular anger, and failure to address that anger will result in a downward wage spiral and a breech of the social compact, not to mention a rise in nativism and other reactionary impulses. It does no good to claim that these economic consequences are an inevitable result of globalization; Germany has somehow managed to maintain a high-wage economy and a vigorous industrial base.

[4] The cowardice is not merely political. During the past ten years, I have observed that Democrats are actually growing afraid of Republicans. In a quirky and flawed, but insightful, little book, "
Democracy and Populism: Fear and Hatred," John Lukacs concludes that the left fears, the right hates.

[5] The GOP cult of Ayn Rand is both revealing and mystifying. On the one hand, Rand's tough guy, every-man-for-himself posturing is a natural fit because it puts a philosophical gloss on the latent sociopathy so prevalent among the hard right. On the other, Rand exclaimed at every opportunity that she was a militant atheist who felt nothing but contempt for Christianity. Apparently, the ignorance of most fundamentalist "values voters" means that GOP candidates who enthuse over Ran d at the same time they thump their Bibles never have to explain this stark contradiction. And I imagine a Democratic officeholder would have a harder time explaining why he named his offspring "Marx" than a GOP incumbent would in rationalizing naming his kid "Rand."




Monday, September 3, 2012

Mormonism OK With Christians (Just As Long As He's Really Really Really RICH RICH RICH) Goldman Sachs Rules Everyone/thing/YOU!




The conventional wisdom among the elite is still that the current slump “cannot be as bad as the Great Depression.” This view is wrong. What we face now could, in fact, be worse than the Great Depression — because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.

It's nice, isn't it?

To know who's in charge, that is.

And did you think things were improving in the financial sector?

Sure, for the banks and investors.

Not for the taxpayers, bubby.

This latest plan — which is likely to provide cheap loans to hedge funds and others so that they can buy distressed bank assets at relatively high prices — has been heavily influenced by the financial sector, and Treasury has made no secret of that. As Neel Kashkari, a senior Treasury official under both Henry Paulson and Tim Geithner (and a Goldman alum) told Congress in March, “We had received inbound unsolicited proposals from people in the private sector saying, ‘We have capital on the sidelines; we want to go after [distressed bank] assets.’” And the plan lets them do just that: “By marrying government capital — taxpayer capital — with private-sector capital and providing financing, you can enable those investors to then go after those assets at a price that makes sense for the investors and at a price that makes sense for the banks.” Kashkari didn’t mention anything about what makes sense for the third group involved: the taxpayers.

And you thought that Goldman Sachs, having been almost overexposed as the repository (sepulchre actually) of all things inherent in the financial corruption racket, was now on its best behavior?

Think again. (We are fools!)

Goldman Sachs's Oligarchic Powers


Simon Johnson was a former chief economist of the International Monetary Fund and is a professor at MIT, a senior fellow at the Peterson Institute for International Economics and co-founder of The Baseline Scenario.

He draws upon his experiences with the IMF to describe the 2008 financial crisis in the United States and suggests where the crisis might lead. He describes the oligarchy that now basically runs the government and its regulatory parts without mentioning either the word "fraud" or "corruption."

Elsewhere, an article in Mother Jones called How the Oligarchs Took America by Andy Kroll names some of the oligarchs as excerpted below:

The limited glimpse we have of the people bankrolling these shadowy outfits is a who's-who of the New Oligarchy: the billionaire Koch Brothers ($21.5 billion); financier George Soros ($11 billion); hedge-fund CEO Paul Singer (his fund, Elliott Management, is worth $17 billion); investor Harold Simmons (net worth: $4.5 billion); New York venture capitalist Kenneth Langone ($1.1 billion); and real estate tycoon Bob Perry ($600 million).

Then there's the roster of corporations who have used their largesse to influence American politics. Health insurance companies, including UnitedHealth Group and Cigna, gave a whopping $86.2 million to the US Chamber to kill the public option, funneling the money through the industry trade group America's Health Insurance Plans. And corporate titans like Goldman Sachs, Prudential Financial, and Dow Chemical have given millions more to the Chamber to lobby against new financial and chemical regulations.  (from the article in Mother Jones called How the Oligarchs Took America)
. . . . . . . . . . . . . . . . . . . . .

The Quiet Coup

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government — a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

By Simon Johnson - The Atlantic
. . . .
One channel of influence was, of course, the flow of individuals between Wall Street and Washington. Robert Rubin, once the co-chairman of Goldman Sachs, served in Washington as Treasury secretary under Clinton, and later became chairman of Citigroup’s executive committee. Henry Paulson, CEO of Goldman Sachs during the long boom, became Treasury secretary under George W. Bush.
John Snow, Paulson’s predecessor, left to become chairman of Cerberus Capital Management, a large private-equity firm that also counts Dan Quayle among its executives. Alan Greenspan, after leaving the Federal Reserve, became a consultant to Pimco, perhaps the biggest player in international bond markets.

These personal connections were multiplied many times over at the lower levels of the past three presidential administrations, strengthening the ties between Washington and Wall Street.
It has become something of a tradition for Goldman Sachs employees to go into public service after they leave the firm. The flow of Goldman alumni — including Jon Corzine, now the governor of New Jersey, along with Rubin and Paulson — not only placed people with Wall Street’s worldview in the halls of power; it also helped create an image of Goldman (inside the Beltway, at least) as an institution that was itself almost a form of public service.

Wall Street is a very seductive place, imbued with an air of power.
Its executives truly believe that they control the levers that make the world go round. A civil servant from Washington invited into their conference rooms, even if just for a meeting, could be forgiven for falling under their sway.

Throughout my time at the IMF, I was struck by the easy access of leading financiers to the highest U.S. government officials, and the interweaving of the two career tracks. I vividly remember a meeting in early 2008 — attended by top policy makers from a handful of rich countries — at which the chair casually proclaimed, to the room’s general approval, that the best preparation for becoming a central-bank governor was to work first as an investment banker.
A whole generation of policy makers has been mesmerized by Wall Street, always and utterly convinced that whatever the banks said was true. Alan Greenspan’s pronouncements in favor of unregulated financial markets are well known. Yet Greenspan was hardly alone. This is what Ben Bernanke, the man who succeeded him, said in 2006: “The management of market risk and credit risk has become increasingly sophisticated. … Banking organizations of all sizes have made substantial strides over the past two decades in their ability to measure and manage risks.”

Of course, this was mostly an illusion. Regulators, legislators, and academics almost all assumed that the managers of these banks knew what they were doing. In retrospect, they didn’t. AIG’s Financial Products division, for instance, made $2.5 billion in pretax profits in 2005, largely by selling underpriced insurance on complex, poorly understood securities. Often described as “picking up nickels in front of a steamroller,” this strategy is profitable in ordinary years, and catastrophic in bad ones.

As of last fall, AIG had outstanding insurance on more than $400 billion in securities. To date, the U.S. government, in an effort to rescue the company, has committed about $180 billion in investments and loans to cover losses that AIG’s sophisticated risk modeling had said were virtually impossible.
Wall Street’s seductive power extended even (or especially) to finance and economics professors, historically confined to the cramped offices of universities and the pursuit of Nobel Prizes. As mathematical finance became more and more essential to practical finance, professors increasingly took positions as consultants or partners at financial institutions.

Myron Scholes and Robert Merton, Nobel laureates both, were perhaps the most famous; they took board seats at the hedge fund Long-Term Capital Management in 1994, before the fund famously flamed out at the end of the decade. But many others beat similar paths. This migration gave the stamp of academic legitimacy (and the intimidating aura of intellectual rigor) to the burgeoning world of high finance.

As more and more of the rich made their money in finance, the cult of finance seeped into the culture at large. Works like Barbarians at the Gate, Wall Street, and Bonfire of the Vanities — all intended as cautionary tales — served only to increase Wall Street’s mystique. Michael Lewis noted in Portfolio last year that when he wrote Liar’s Poker, an insider’s account of the financial industry, in 1989, he had hoped the book might provoke outrage at Wall Street’s hubris and excess. Instead, he found himself “knee-deep in letters from students at Ohio State who wanted to know if I had any other secrets to share. … They’d read my book as a how-to manual.” Even Wall Street’s criminals, like Michael Milken and Ivan Boesky, became larger than life.
In a society that celebrates the idea of making money, it was easy to infer that the interests of the financial sector were the same as the interests of the country — and that the winners in the financial sector knew better what was good for America than did the career civil servants in Washington. Faith in free financial markets grew into conventional wisdom — trumpeted on the editorial pages of The Wall Street Journal and on the floor of Congress.


From this confluence of campaign finance, personal connections, and ideology there flowed, in just the past decade, a river of deregulatory policies that is, in hindsight, astonishing:

• insistence on free movement of capital across borders;
• the repeal of Depression-era regulations separating commercial and investment banking;
• a congressional ban on the regulation of credit-default swaps;
• major increases in the amount of leverage allowed to investment banks;
• a light (dare I say invisible?) hand at the Securities and Exchange Commission in its regulatory enforcement;
• an international agreement to allow banks to measure their own riskiness;
• and an intentional failure to update regulations so as to keep up with the tremendous pace of financial innovation.

The mood that accompanied these measures in Washington seemed to swing between nonchalance and outright celebration: finance unleashed, it was thought, would continue to propel the economy to greater heights.

America’s Oligarchs and the Financial Crisis

The oligarchy and the government policies that aided it did not alone cause the financial crisis that exploded last year. Many other factors contributed, including excessive borrowing by households and lax lending standards out on the fringes of the financial world. But major commercial and investment banks — and the hedge funds that ran alongside them — were the big beneficiaries of the twin housing and equity-market bubbles of this decade, their profits fed by an ever-increasing volume of transactions founded on a relatively small base of actual physical assets. Each time a loan was sold, packaged, securitized, and resold, banks took their transaction fees, and the hedge funds buying those securities reaped ever-larger fees as their holdings grew.

Because everyone was getting richer, and the health of the national economy depended so heavily on growth in real estate and finance, no one in Washington had any incentive to question what was going on. Instead, Fed Chairman Greenspan and President Bush insisted metronomically that the economy was fundamentally sound and that the tremendous growth in complex securities and credit-default swaps was evidence of a healthy economy where risk was distributed safely.

In the summer of 2007, signs of strain started appearing. The boom had produced so much debt that even a small economic stumble could cause major problems, and rising delinquencies in subprime mortgages proved the stumbling block. Ever since, the financial sector and the federal government have been behaving exactly the way one would expect them to, in light of past emerging-market crises.

By now, the princes of the financial world have of course been stripped naked as leaders and strategists—at least in the eyes of most Americans. But as the months have rolled by, financial elites have continued to assume that their position as the economy’s favored children is safe, despite the wreckage they have caused.

Stanley O’Neal, the CEO of Merrill Lynch, pushed his firm heavily into the mortgage-backed-securities market at its peak in 2005 and 2006; in October 2007, he acknowledged, “The bottom line is, we—I—got it wrong by being overexposed to subprime, and we suffered as a result of impaired liquidity in that market. No one is more disappointed than I am in that result.” O’Neal took home a $14 million bonus in 2006; in 2007, he walked away from Merrill with a severance package worth $162 million, although it is presumably worth much less today.

In October, John Thain, Merrill Lynch’s final CEO, reportedly lobbied his board of directors for a bonus of $30 million or more, eventually reducing his demand to $10 million in December; he withdrew the request, under a firestorm of protest, only after it was leaked to The Wall Street Journal. Merrill Lynch as a whole was no better: it moved its bonus payments, $4 billion in total, forward to December, presumably to avoid the possibility that they would be reduced by Bank of America, which would own Merrill beginning on January 1. Wall Street paid out $18 billion in year-end bonuses last year to its New York City employees, after the government disbursed $243 billion in emergency assistance to the financial sector.

In a financial panic, the government must respond with both speed and overwhelming force. The root problem is uncertainty — in our case, uncertainty about whether the major banks have sufficient assets to cover their liabilities. Half measures combined with wishful thinking and a wait-and-see attitude cannot overcome this uncertainty. And the longer the response takes, the longer the uncertainty will stymie the flow of credit, sap consumer confidence, and cripple the economy — ultimately making the problem much harder to solve. Yet the principal characteristics of the government’s response to the financial crisis have been delay, lack of transparency, and an unwillingness to upset the financial sector.
The response so far is perhaps best described as “policy by deal”:  when a major financial institution gets into trouble, the Treasury Department and the Federal Reserve engineer a bailout over the weekend and announce on Monday that everything is fine. In March 2008, Bear Stearns was sold to JP Morgan Chase in what looked to many like a gift to JP Morgan. (Jamie Dimon, JP Morgan’s CEO, sits on the board of directors of the Federal Reserve Bank of New York, which, along with the Treasury Department, brokered the deal.)
In September, we saw the sale of Merrill Lynch to Bank of America, the first bailout of AIG, and the takeover and immediate sale of Washington Mutual to JP Morgan — all of which were brokered by the government. In October, nine large banks were recapitalized on the same day behind closed doors in Washington. This, in turn, was followed by additional bailouts for Citigroup, AIG, Bank of America, Citigroup (again), and AIG (again).

Some of these deals may have been reasonable responses to the immediate situation. But it was never clear (and still isn’t) what combination of interests was being served, and how. Treasury and the Fed did not act according to any publicly articulated principles, but just worked out a transaction and claimed it was the best that could be done under the circumstances. This was late-night, backroom dealing, pure and simple.

Throughout the crisis, the government has taken extreme care not to upset the interests of the financial institutions, or to question the basic outlines of the system that got us here. In September 2008, Henry Paulson asked Congress for $700 billion to buy toxic assets from banks, with no strings attached and no judicial review of his purchase decisions. Many observers suspected that the purpose was to overpay for those assets and thereby take the problem off the banks’ hands—indeed, that is the only way that buying toxic assets would have helped anything. Perhaps because there was no way to make such a blatant subsidy politically acceptable, that plan was shelved.

Instead, the money was used to recapitalize banks, buying shares in them on terms that were grossly favorable to the banks themselves. As the crisis has deepened and financial institutions have needed more help, the government has gotten more and more creative in figuring out ways to provide banks with subsidies that are too complex for the general public to understand. The first AIG bailout, which was on relatively good terms for the taxpayer, was supplemented by three further bailouts whose terms were more AIG-friendly.
The second Citigroup bailout and the Bank of America bailout included complex asset guarantees that provided the banks with insurance at below-market rates. The third Citigroup bailout, in late February, converted government-owned preferred stock to common stock at a price significantly higher than the market price — a subsidy that probably even most Wall Street Journal readers would miss on first reading. And the convertible preferred shares that the Treasury will buy under the new Financial Stability Plan give the conversion option (and thus the upside) to the banks, not the government.

This latest plan — which is likely to provide cheap loans to hedge funds and others so that they can buy distressed bank assets at relatively high prices—has been heavily influenced by the financial sector, and Treasury has made no secret of that. As Neel Kashkari, a senior Treasury official under both Henry Paulson and Tim Geithner (and a Goldman alum) told Congress in March, “We had received inbound unsolicited proposals from people in the private sector saying, ‘We have capital on the sidelines; we want to go after [distressed bank] assets.’” And the plan lets them do just that: “By marrying government capital—taxpayer capital—with private-sector capital and providing financing, you can enable those investors to then go after those assets at a price that makes sense for the investors and at a price that makes sense for the banks.” Kashkari didn’t mention anything about what makes sense for the third group involved: the taxpayers.

Even leaving aside fairness to taxpayers, the government’s velvet-glove approach with the banks is deeply troubling, for one simple reason: it is inadequate to change the behavior of a financial sector accustomed to doing business on its own terms, at a time when that behavior must change. As an unnamed senior bank official said to The New York Times last fall, “It doesn’t matter how much Hank Paulson gives us, no one is going to lend a nickel until the economy turns.” But there’s the rub: the economy can’t recover until the banks are healthy and willing to lend.

The Way Out
Looking just at the financial crisis (and leaving aside some problems of the larger economy), we face at least two major, interrelated problems. The first is a desperately ill banking sector that threatens to choke off any incipient recovery that the fiscal stimulus might generate. The second is a political balance of power that gives the financial sector a veto over public policy, even as that sector loses popular support.

Big banks, it seems, have only gained political strength since the crisis began. And this is not surprising. With the financial system so fragile, the damage that a major bank failure could cause—Lehman was small relative to Citigroup or Bank of America—is much greater than it would be during ordinary times. The banks have been exploiting this fear as they wring favorable deals out of Washington. Bank of America obtained its second bailout package (in January) after warning the government that it might not be able to go through with the acquisition of Merrill Lynch, a prospect that Treasury did not want to consider.

The challenges the United States faces are familiar territory to the people at the IMF. If you hid the name of the country and just showed them the numbers, there is no doubt what old IMF hands would say: nationalize troubled banks and break them up as necessary.

In some ways, of course, the government has already taken control of the banking system. It has essentially guaranteed the liabilities of the biggest banks, and it is their only plausible source of capital today. Meanwhile, the Federal Reserve has taken on a major role in providing credit to the economy—the function that the private banking sector is supposed to be performing, but isn’t. Yet there are limits to what the Fed can do on its own; consumers and businesses are still dependent on banks that lack the balance sheets and the incentives to make the loans the economy needs, and the government has no real control over who runs the banks, or over what they do.

At the root of the banks’ problems are the large losses they have undoubtedly taken on their securities and loan portfolios. But they don’t want to recognize the full extent of their losses, because that would likely expose them as insolvent. So they talk down the problem, and ask for handouts that aren’t enough to make them healthy (again, they can’t reveal the size of the handouts that would be necessary for that), but are enough to keep them upright a little longer. This behavior is corrosive: unhealthy banks either don’t lend (hoarding money to shore up reserves) or they make desperate gambles on high-risk loans and investments that could pay off big, but probably won’t pay off at all. In either case, the economy suffers further, and as it does, bank assets themselves continue to deteriorate—creating a highly destructive vicious cycle.

To break this cycle, the government must force the banks to acknowledge the scale of their problems. As the IMF understands (and as the U.S. government itself has insisted to multiple emerging-market countries in the past), the most direct way to do this is nationalization. Instead, Treasury is trying to negotiate bailouts bank by bank, and behaving as if the banks hold all the cards—contorting the terms of each deal to minimize government ownership while forswearing government influence over bank strategy or operations. Under these conditions, cleaning up bank balance sheets is impossible.

Nationalization would not imply permanent state ownership. The IMF’s advice would be, essentially: scale up the standard Federal Deposit Insurance Corporation process. An FDIC “intervention” is basically a government-managed bankruptcy procedure for banks. It would allow the government to wipe out bank shareholders, replace failed management, clean up the balance sheets, and then sell the banks back to the private sector. The main advantage is immediate recognition of the problem so that it can be solved before it grows worse.

The government needs to inspect the balance sheets and identify the banks that cannot survive a severe recession. These banks should face a choice: write down your assets to their true value and raise private capital within 30 days, or be taken over by the government. The government would write down the toxic assets of banks taken into receivership—recognizing reality—and transfer those assets to a separate government entity, which would attempt to salvage whatever value is possible for the taxpayer (as the Resolution Trust Corporation did after the savings-and-loan debacle of the 1980s). The rump banks—cleansed and able to lend safely, and hence trusted again by other lenders and investors—could then be sold off.

Cleaning up the megabanks will be complex. And it will be expensive for the taxpayer; according to the latest IMF numbers, the cleanup of the banking system would probably cost close to $1.5 trillion (or 10 percent of our GDP) in the long term. But only decisive government action — exposing the full extent of the financial rot and restoring some set of banks to publicly verifiable health—can cure the financial sector as a whole.

This may seem like strong medicine. But in fact, while necessary, it is insufficient. The second problem the U.S. faces—the power of the oligarchy—is just as important as the immediate crisis of lending. And the advice from the IMF on this front would again be simple: break the oligarchy.

Oversize institutions disproportionately influence public policy; the major banks we have today draw much of their power from being too big to fail. Nationalization and re-privatization would not change that; while the replacement of the bank executives who got us into this crisis would be just and sensible, ultimately, the swapping-out of one set of powerful managers for another would change only the names of the oligarchs.

Ideally, big banks should be sold in medium-size pieces, divided regionally or by type of business. Where this proves impractical—since we’ll want to sell the banks quickly—they could be sold whole, but with the requirement of being broken up within a short time. Banks that remain in private hands should also be subject to size limitations.

This may seem like a crude and arbitrary step, but it is the best way to limit the power of individual institutions in a sector that is essential to the economy as a whole. Of course, some people will complain about the “efficiency costs” of a more fragmented banking system, and these costs are real. But so are the costs when a bank that is too big to fail—a financial weapon of mass self-destruction—explodes. Anything that is too big to fail is too big to exist.

To ensure systematic bank breakup, and to prevent the eventual reemergence of dangerous behemoths, we also need to overhaul our antitrust legislation. Laws put in place more than 100 years ago to combat industrial monopolies were not designed to address the problem we now face. The problem in the financial sector today is not that a given firm might have enough market share to influence prices; it is that one firm or a small set of interconnected firms, by failing, can bring down the economy. The Obama administration’s fiscal stimulus evokes FDR, but what we need to imitate here is Teddy Roosevelt’s trust-busting.

Caps on executive compensation, while redolent of populism, might help restore the political balance of power and deter the emergence of a new oligarchy. Wall Street’s main attraction—to the people who work there and to the government officials who were only too happy to bask in its reflected glory—has been the astounding amount of money that could be made. Limiting that money would reduce the allure of the financial sector and make it more like any other industry.

Still, outright pay caps are clumsy, especially in the long run. And most money is now made in largely unregulated private hedge funds and private-equity firms, so lowering pay would be complicated. Regulation and taxation should be part of the solution. Over time, though, the largest part may involve more transparency and competition, which would bring financial-industry fees down. To those who say this would drive financial activities to other countries, we can now safely say: fine.

Two Paths
To paraphrase Joseph Schumpeter, the early-20th-century economist, everyone has elites; the important thing is to change them from time to time. If the U.S. were just another country, coming to the IMF with hat in hand, I might be fairly optimistic about its future. Most of the emerging-market crises that I’ve mentioned ended relatively quickly, and gave way, for the most part, to relatively strong recoveries. But this, alas, brings us to the limit of the analogy between the U.S. and emerging markets.

Emerging-market countries have only a precarious hold on wealth, and are weaklings globally. When they get into trouble, they quite literally run out of money — or at least out of foreign currency, without which they cannot survive. They must make difficult decisions; ultimately, aggressive action is baked into the cake. But the U.S., of course, is the world’s most powerful nation, rich beyond measure, and blessed with the exorbitant privilege of paying its foreign debts in its own currency, which it can print. As a result, it could very well stumble along for years — as Japan did during its lost decade — never summoning the courage to do what it needs to do, and never really recovering. A clean break with the past — involving the takeover and cleanup of major banks—hardly looks like a sure thing right now. Certainly no one at the IMF can force it.

In my view, the U.S. faces two plausible scenarios. The first involves complicated bank-by-bank deals and a continual drumbeat of (repeated) bailouts, like the ones we saw in February with Citigroup and AIG. The administration will try to muddle through, and confusion will reign.

Boris Fyodorov, the late finance minister of Russia, struggled for much of the past 20 years against oligarchs, corruption, and abuse of authority in all its forms. He liked to say that confusion and chaos were very much in the interests of the powerful—letting them take things, legally and illegally, with impunity. When inflation is high, who can say what a piece of property is really worth? When the credit system is supported by byzantine government arrangements and backroom deals, how do you know that you aren’t being fleeced?

Our future could be one in which continued tumult feeds the looting of the financial system, and we talk more and more about exactly how our oligarchs became bandits and how the economy just can’t seem to get into gear.

The second scenario begins more bleakly, and might end that way too. But it does provide at least some hope that we’ll be shaken out of our torpor. It goes like this: the global economy continues to deteriorate, the banking system in east-central Europe collapses, and—because eastern Europe’s banks are mostly owned by western European banks—justifiable fears of government insolvency spread throughout the Continent. Creditors take further hits and confidence falls further.

The Asian economies that export manufactured goods are devastated, and the commodity producers in Latin America and Africa are not much better off. A dramatic worsening of the global environment forces the U.S. economy, already staggering, down onto both knees. The baseline growth rates used in the administration’s current budget are increasingly seen as unrealistic, and the rosy “stress scenario” that the U.S. Treasury is currently using to evaluate banks’ balance sheets becomes a source of great embarrassment.


Under this kind of pressure, and faced with the prospect of a national and global collapse, minds may become more concentrated.

The conventional wisdom among the elite is still that the current slump “cannot be as bad as the Great Depression.” This view is wrong. What we face now could, in fact, be worse than the Great Depression — because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.



Sunday, September 2, 2012

The KILLERS (Flim-Flam Men) - Medicare First, Then Social Security, Medicaid, Disability (It's Inequality, Stupid!) & Who Says Ryan's Not Open To Adventure? Black College Girl Friend Favors Obama Now



(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.)


BREAKING NEWS:   Paul Ryan's Black College Sweetheart Arrested and Imprisoned For Fraud?

The thing that continues to stick in my craw (wherever that is) is the overweening air of superiority seen in Ann Rmoney's easily-accepted (by the MSM talking heads) explanation of how and why they have told "you people" (me and my ilk) all they are ever going to about her and her Presidential candidate husband's tax payments, and her desire to be left alone with her brilliant mind (compliments of Barb Bush during the Katrina catastrophe) and $100,000 horse tax writeoffs as she makes her plans to help her husband take over the White House (and the government) of the U.S. (funded by those whose money lives in untaxable Cayman Island accounts as well as in other countries with their own unique agendas).

My government, that is. My White House. But I have no right (in her mind anyhow) to question who they are, how they got to where they are politically and financially, and exactly what their plans are for me and my family and friends due to the fact that they feel free to lie without respite to their inferiors (me/us) because they know that their inferiors don't have any rights - or enforceable rights anyway. At all. Because that's effectively all the Rethuglican Convention was about - right down to the lies told by law-and-order icon Clint Eastwood.

However, until the entire Bill of Rights is revoked, I still think I have some right to know (and we all do) what these jokers are planning, and can ask them as many times as we desire with a reasonable expectation of getting some truthful answers (to put us off a little while they hope - until November at least) in a still somewhat democratic-seeming country.

And if I/we don't get these answers, then that's the progressive campaign agenda (metaphorically, anyhow) that should go forward:   the full-on exposure of self-serving lies.

(But as I'm not actually in charge of any part of the powerful media presence existent in this country today, that is probably a dream or a moot point anyway.)

Matt Taibbi | Romney, Ryan Speeches Make Me Miss George Bush


The Bushs and the Cheneys at the 2004 Republican convention. (photo: Getty Images)

The Bushes and the Cheneys at the 2004 Republican convention. (photo: Getty Images)

The Medicare Killers

Paul Krugman August 31, 2012 Paul Ryan’s speech Wednesday night may have accomplished one good thing: It finally may have dispelled the myth that he is a Serious, Honest Conservative. Indeed, Mr. Ryan’s brazen dishonesty left even his critics breathless.
Some of his fibs were trivial but telling, like his suggestion that President Obama is responsible for a closed auto plant in his hometown, even though the plant closed before Mr. Obama took office. Others were infuriating, like his sanctimonious declaration that “the truest measure of any society is how it treats those who cannot defend or care for themselves.” This from a man proposing savage cuts in Medicaid, which would cause tens of millions of vulnerable Americans to lose health coverage.
And Mr. Ryan — who has proposed $4.3 trillion in tax cuts over the next decade, versus only about $1.7 trillion in specific spending cuts — is still posing as a deficit hawk.
But Mr. Ryan’s big lie — and, yes, it deserves that designation — was his claim that “a Romney-Ryan administration will protect and strengthen Medicare.” Actually, it would kill the program.
Before I get there, let me just mention that Mr. Ryan has now gone all-in on the party line that the president’s plan to trim Medicare expenses by around $700 billion over the next decade — savings achieved by paying less to insurance companies and hospitals, not by reducing benefits — is a terrible, terrible thing. Yet, just a few days ago, Mr. Ryan was still touting his own budget plan, which included those very same savings.
But back to the big lie. The Republican Party is now firmly committed to replacing Medicare with what we might call Vouchercare. The government would no longer pay your major medical bills; instead, it would give you a voucher that could be applied to the purchase of private insurance. And, if the voucher proved insufficient to buy decent coverage, hey, that would be your problem.
Moreover, the vouchers almost certainly would be inadequate; their value would be set by a formula taking no account of likely increases in health care costs.
Why would anyone think that this was a good idea? The G.O.P. platform says that it “will empower millions of seniors to control their personal health care decisions.” Indeed. Because those of us too young for Medicare just feel so personally empowered, you know, when dealing with insurance companies.
Still, wouldn’t private insurers reduce costs through the magic of the marketplace? No. All, and I mean all, the evidence says that public systems like Medicare and Medicaid, which have less bureaucracy than private insurers (if you can’t believe this, you’ve never had to deal with an insurance company) and greater bargaining power, are better than the private sector at controlling costs.
I know this flies in the face of free-market dogma, but it’s just a fact. You can see this fact in the history of Medicare Advantage, which is run through private insurers and has consistently had higher costs than traditional Medicare. You can see it from comparisons between Medicaid and private insurance: Medicaid costs much less. And you can see it in international comparisons: The United States has the most privatized health system in the advanced world and, by far, the highest health costs.
So Vouchercare would mean higher costs and lower benefits for seniors. Over time, the Republican plan wouldn’t just end Medicare as we know it, it would kill the thing Medicare is supposed to provide: universal access to essential care. Seniors who couldn’t afford to top up their vouchers with a lot of additional money would just be out of luck.
Still, the G.O.P. promises to maintain Medicare as we know it for those currently over 55. Should everyone born before 1957 feel safe? Again, no.
For one thing, repeal of Obamacare would cause older Americans to lose a number of significant benefits that the law provides, including the way it closes the “doughnut hole” in drug coverage and the way it protects early retirees.
Beyond that, the promise of unchanged benefits for Americans of a certain age just isn’t credible. Think about the political dynamics that would arise once someone born in 1956 still received full Medicare while someone born in 1959 couldn’t afford decent coverage. Do you really think that would be a stable situation? For sure, it would unleash political warfare between the cohorts — and the odds are high that older cohorts would soon find their alleged guarantees snatched away.
The question now is whether voters will understand what’s really going on (which depends to a large extent on whether the news media do their jobs). Mr. Ryan and his party are betting that they can bluster their way through this, pretending that they are the real defenders of Medicare even as they work to kill it. Will they get away with it?
Comments:
  • James.jordan@cox.net, Falls Church, Va
Dr. Krugman,
Heroic truth telling. Mr. Ryan and Mr. Romney are leading a heavily funded campaign designed to implement a strategy of lies & misleading statements via the media, and much of the media is owned by the donors to the GOP. From Mitt Romney's acceptance speech until the last debate in October, the American voter will be subjected to a huge wave of misleading statements, lies, and images designed to trigger our Stone Age emotions, rather than our intellect & persuade voters to go to the polls & cast a vote Mitt Romeny. In bad times, particularly these, with the realities of the 40 year trends of declining and flat wages, increasing income inequality plus poor performance of our public school system, outrageously high college tuitions, loss of social mobility, deteriorating public infrastructure, & high un- & under-employment, rising gasoline, food, and healthcare costs & a blatantly unfair tax code that favors the rich & keeps wage earners in chattel which started a solid year before the Obama election. I noticed in Mr. Romney's speech that he conveniently forgot to mention the starting time of the recession. The American political process for selection of candidates deliberately separates voters from reality. The campaign and the media propaganda places the voter in an emotional state by creating a false reality that we are in an urgent crisis that favors casting a vote for change. The urgent crisis, is "the deficit" despite your great work. Keep it up.
Aug. 31, 2012
  • RLS
  • Virginia
Ryan is a fraud. He told the same bold-faced lie while campaigning in Florida with his mother: “When I think about Medicare, it’s not just a program. It’s not just a bunch of numbers. It’s what my mom relies on. Medicare was there for our family, for my grandma, when we needed it then. And Medicare is there for my mom while she needs it now. And we have to keep that guarantee.” “And Mr. Ryan — who has proposed $4.3 trillion in tax cuts over the next decade, versus only about $1.7 trillion in specific spending cuts — is still posing as a deficit hawk.” Could it be any clearer that the Ryan budget is not about dealing with the deficit? Giving trillions in tax cuts to corporations and the wealthy when taxes are the lowest in decades while demanding shortsighted and savage cuts on the backs of the most vulnerable and politically weakest in our society is immoral and bad economic policy. Romney and Ryan share Grover Norquist's vision of drowning government in a bathtub. Their reverse-Robin-Hood budgets would end most of government other than Social Security and defense (and corporate welfare), and give more tax breaks to millionaires who don’t need them. Romney Budget Proposals Would Require Massive Cuts in Medicare, Medicaid, and Other Programs http://www.cbpp.org/cms/index.cfm?fa=view&id=3658
  • KZ
  • Middlesex County, NJ
NYT Pick
Thank you. I'm 47, and I've been paying into the Medicare pot since 1979. This Boomer demographic time bomb has been waiting to go off for decades, and every politician has been ignoring the ticking. Instead of edging out insurance companies, they have doubled down on the most inhumane medical system in the developed world. I can't understand why any of my Gen X cohort would vote for the same people who betrayed us with cuts to our school, elimination of pensions, job insecurity, enormous student loan debt. Unrest, yes there will be if these clowns remove every last shred of our safety net.
Aug. 31, 2012
  • RMC
  • NYC
They will get away with it, because no one is really listening. The message that the Republicans are delivering about Medicare - "you can trust us"-- is meant to deflect criticisms of those policies, so that their audience, white working- and middle-class men, will focus on the Republican's real message: namely, that President Obama is "weak" and a "loser" and has "failed" to fix the economy, and that the only way to remedy that failure is by electing Mitt Romney. The rest, including the Medicare debate, is mere blocking - defense so that the offense can move forward. White working- and middle-class men are terrified.Their identity and sense of purpose have been undermined by 4 years of recession. They yearn to reclaim that identity -- to feel adequate and powerful - by taking action. Romney is giving these men something a choice - vote for him - while characterizing Obama as a loser. In short, the insecurities and real, justified terror, of the victims of the Republican recession (because the Republicans "built it") is being turned against those victims. The deficit and debt are merely fig leaves, offered to the victims to disguise as decisiveness and strength, what is really only a panicked run for cover . If we Democrats don't figure out how to combat this strategy out soon, we can lose this election. We need to reassure frightened people that the President can fight for them, while exposing Romney and his running mate, Elmer Gantry, for the phonies that they are.
  • kurthunt
  • Chicago
You can fact-check, reason, debate, accommodate, compromise. A mountain of undeniable evidence can pile up against the GOP. But the simple fact remains that they don't care about any of it. They are driven my a simplistic hatred of liberals. It's a new sort of tribalism. They love their team, and they hate the opposing team. A logical approach clearly dose not work. We need to understand what motivates these people - nearly fifty percent of our population - and shamelessly manipulate them.... the way that the Koch Brothers and other plutocrats manipulate them. The Democrats need to hire an army of social anthropoligists, psychologists and marketers, to find out what makes these people tick. The policy wonks, economists, legal scholars, historians, and scientists have no effect upon them. We should not debate crazy people. We need to try to understand crazy people and either fix or exploit their sickness.
  • Sandra Andrews
  • North Carolina
I am just turning 65 and am eligible for Medicare, which means that I also have to have a supplemental policy and drug coverage. I am deluged with mail from every insurance company in the free world touting their plans. I find it very confusing, which prompted me to think, if I am having trouble sifting through these supplemental plans, while I am healthy and in my right mind, what in the world would I run into if I was given a voucher for $6400 and told to "find a plan"? Doesn't anyone remember or care to learn why Medicare was enacted in the first place? Not one insurance company wants to insure someone 65 or older at a price they can afford. The elderly will just give up and not get care at all, just like what happened before Medicare.
Aug. 31, 2012
  • Robert
  • London, UK
@VR - my brother is an NHS GP, and yes the plan _was_ to begin privatising the NHS by the Conservatives. It was only the Lib Dem partners in their government, and a huge outcry from the people, that have thwarted their efforts. Even where this has not happened, local PCTs have begun to radically cut compensation to the doctors per patient, most notably in Lambeth in South London (cut by 31%), which has seen several practices merge or close as a result. The NHS is being threatened by bad people with bad ideas - because those practices will be gold mines to anyone that manages to buy the buildings and take them private, as they have all been built on public tax dollars but are expected to go cheaply. That is basically the plan - a huge windfall for those "in the know" and wealthy enough to buy up the chunks of the NHS that are privatised, and reduced care for the citizens. This should sound familiar to anyone in the US, as you are there now...
  • Sheldon Bunin
  • Jackson Heights NY
There are more than one kind of lies. There are outright lies, like the claim that Republicans will save Medicare, a program that they hated for years. There are sugar coated lies, like Vouchercare will will be empowering. Then there are damnable lies when Republicans who caused our economy to collapse and stonewalled and filibustered every effort to create jobs and did the opposite, blame the results of their party's GOP over country politics, on Obama's policies which he cound not implement. . Then there is the gift wrapped, highly polished, juicy looking poisoned apple which Romney and Ryan are trying to get the American people to bite into. "Take a bite. It will solve your little middle class problems." And for the convention a new lie that a man whose presidential run is funded by anonymous billionaires, possibly foreign corporations or foreigners, for all we know and who keeps hundreds of millions in offshore tax havens, promising that all his tax avoidance strategies saved him nothing on taxes but still refuses to release any tax returnes before 2010, because he values his privacy or perhaps he doesn’t dare to, and who runs ads with doctored quotes, tells us that he is a middle class champion and can solves the nations problem, if we just trust him and his team of liars. America is invited to confuse success with making millions. Elect Ronmey get Sheldon Adelson, et al., and the GOP platform. .
Aug. 31, 2012
  • Dave Scott
  • Ohio
Ryan: "the truest measure of any society is how it treats those who cannot defend or care for themselves.” What we have in today''s Republican leadership is nothing less than real evil. At the point when the Wizard publicly bloviates about compassion for the poor while the little man behind the curtain slashes Medicaid, lines of minimal human decency have been crossed -- lines Ryan has also crossed in many other ways. And as a practical matter, I find it hard to believe that some future Congress is going to tell millions of Baby Boom retirees that Medicare is limited to Ryan's vouchers.
Aug. 31, 2012
  • Scott
  • Illinois
Anyone with a sense of history would recoil at the notion that excessive government debt might bring about inflation like Germany had post WWI with people rolling wheelbarrows of money to buy a loaf of bread, but the other side of the coin is the greater threat now with deflation in home prices wiping out years of equity accumulation and impoverishing much of the once middle class. With China and the development of robot technology able to produce an almost endless supply of manufactured goods, supply shortages causing inflation may be almost impossible. The fact that Romney and Ryan don't really want to close the gap between revenue and spending, and are willing to explode the budget plans of either side with a much greater willingness to feed the monster of the military industrial complex by starting a war with Iran leads one to the realization that there is no genuinely resposible course they are likely to persue. Debt elimination is a smokescreen. In the midst of their planned shockwave will be cutbacks in Medicare engineered to be necessary and patriotic because of the dire emergency of the newest military adventure. If we really did have a true military emergency, we ought to sell War Bonds, tax the top incomes at 91% like it was under Roosevelt, Truman, and Eisenhower and reinstate the draft, which would create great protest and turmoil unless the cause were truly just. Or someone could vote for Obama instead. Not perfect, but definitely a more reasoned choice.
Aug. 31, 2012
  • Sunk in...
  • Sausalito, CA
This is entirely consistent with Bain and Co. business model. Human suffering is simply not factored into the equation for this transaction. See Matt Taibbi's article in Rolling Stone. Romney is the presidential personification of a multinational corporation. He has no nationality he's not _from_ anywhere he's entirely divorced from community country or civic duty. He just doing what he does - take.
  • Carl Ian Schwartz
  • Paterson, New Jersey
So...why not Medicare for Everyone. That would level the risk pool. It works in many industrialized countries, such as Canada, France, and England. The other approach is to force health insurance into being non-profit. We had that for years in the Blue Cross/Blue Shield Associations, but those have been taken over by for-profit insurers. Some things shouldn't be for profit: health insurance and our Constitutional guarantees. This iteration of the GOP wants to do just that, and we've seen where it takes us. (Indeed, those who know 20th-century European history have seen where the Corporate State took Italy and Germany.)
  • c kaufman
  • Hoboken, NJ
The rising amount of Washington demagoguery is related to the amount of political disingenuousness needed to get the latest Washington privatization scheme into law. Creating yet another distorted market to deliver the public into. Privatization today is actually using government for one businessman's dubious business plan, rigging profits like a rigged card game (textbook cronyism), and astonishingly Washington is proud of it. There's no public prosecution of cronyism, no public advocate at the table, so there's not going to be a serious political discussion worth a dime. Beyond Washington's barrage of political infomercials, and circular group think it's hard to prove that medicare is the crisis. Our economy, tax base, private healthcare system is in much worse shape. For the GOP to insist that 47 year old Medicare is less stable then one of their many recent privatization programs (banking deregulation, Enron, etc.) is ludicrous. I don't know anyone who wouldn't just pay a few dollars more into our managed not-for profit insurance system (Medicare) to assure themselves benefits later. The goal is to push for transparency, and rigorous management. I don't trust today's conservative politicians who managed to throw all oversight, and responsible management of the 2008 bank bailout out of the window. Let the bankers take the cash and run.
Aug. 31, 2012
  • Ron T
  • Mpls
Is Medicare going “bankrupt”? Not even close. Notice that somehow nobody in GOP says the Army is going bankrupt, yet it doesn't even have its own fake "fund" like SS or Medicare: there is zero dollars appropriated for the Army for future decades - spending for the Army each year is only politically limited: just like SS and Medicare, if someone says otherwise they are lying. The debate is skilfully narrowed down to "whether the Medicare fund will run out in 2042 or 2063", yet the Army "fund" runs out in 2012 (since there is no fund) and we all know that the military will be funded in 2013, more than in 2012. The US government can always fund Medicare if we the people make a political decision to do so. Money is scarce to you and me, but the government creates out of nothing every dollar it spends. And it destroys almost as many dollars by taxing. The government cannot run out of dollars, like a bowling alley cannot run out of points. It can create too many dollars and so fuel inflation, but it cannot run out. See: http://tinyurl.com/3pmseq8 The only problem may be inadequate REAL output. The government is now manufacturing this future scarcity by refusing to spend and thus allowing unemployment to persist - all this to "save money" it doesn't need. The lost productivity may actually result in us as seniors being unable to obtain the care we will need, not the government "not having dollars" in the future. http://mosler2012.com/wp-content/uploads/2009/03/7deadly.pdf
Aug. 31, 2012

It's Inequality, Stupid

Robert Reich, Robert Reich's Blog
31 August 12
he most troubling economic trend facing America this Labor Day weekend is the increasing concentration of income, wealth, and political power at the very top - among a handful of extraordinarily wealthy people - and the steady decline of the great American middle class.
Inequality in America is at record levels. The 400 richest Americans now have more wealth than the bottom 150 million of us put together.
Republicans claim the rich are job creators. Nothing could be further from the truth. In order to create jobs, businesses need customers. But the rich spend only a small fraction of what they earn. They park most of it wherever around the world they can get the highest return.
The real job creators are the vast middle class, whose spending drives the economy and creates jobs.
But as the middle class's share of total income continues to drop, it cannot spend as much as before. Nor can most Americans borrow as they did before the crash of 2008 - borrowing that temporarily masked their declining purchasing power.
As a result, businesses are reluctant to hire. This is the main reason why the recovery has been so anemic.
As wealth and income rise to the top, moreover, so does political power. The rich are able to entrench themselves by lowering their taxes, gaining special tax breaks (such as the "carried interest" loophole allowing private equity and hedge fund managers to treat their incomes as capital gains), and ensuring a steady flow of corporate welfare to their businesses (special breaks for oil and gas, big agriculture, big insurance, Big Pharma, and, of course, Wall Street).
All of this squeezes public budgets, corrupts government, and undermines our democracy. The issue isn't the size of our government; it's who our government is for. It has become less responsive to the needs of most citizens and more to the demands of a comparative few.
The Republican response - as we saw dramatically articulated this past week in Tampa - is to further reduce taxes on the rich, defund programs for the poor, fight unions, allow the median wage to continue to fall, and oppose any limits on campaign contributions or spending.
It does not take a great deal of brainpower to understand this strategy will lead to an even more lopsided economy, more entrenched wealth, and more corrupt democracy.
The question of the moment is whether next week President Obama will make a bold and powerful rejoinder. If he and the Democratic Party stand for anything, it must be to reverse this disastrous trend.

(Robert B. Reich, Chancellor's Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers Aftershock and The Work of Nations. His latest is an e-book, Beyond Outrage. He is also a founding editor of the American Prospect magazine and chairman of Common Cause.)

Saturday, September 1, 2012

Conspiracy of Stupid:   Ron Paul Reps Shouted Down and Permanently Offended - Not "Endorsing" the Rmoney Team (Ever?) Does It Matter That Santorum Addressed Working-Class Voters In Non-Mandarin Terms?



UPDATE:

I just found the most concise denouement of the Rethuglican Gathering at Cogitamus:

Would that we'd been reading more like this at the Guardian from our weak-tea press corps here at home.

They set out on their long trek with two deeply mendacious speeches. Mr Ryan's lies were more barefaced: he blamed the incumbent president for the closure of a General Motors plant which went belly up under his predecessor.

Mr Romney's rewriting of recent history was just as bold. According to him, the Republicans in Congress accepted Mr Obama's victory in 2008 and, being the good and generous people that they are, rallied round his presidency. They did not block everything he did, or threaten to send government finances over a cliff, twice.

The most partisan and obstructionist opposition in history has all been one giant misunderstanding. In a similar vein, Bain Capital was a "small" company that "helped" other businesses. The man with more wealth than the eight most recent presidents combined ended this section by reaching out to Americans on two jobs at $9 an hour. The hallucinogen powerful enough to cast Mr Romney as a man of the poor has not yet been confected.
Posted by: nancy | August 31, 2012

Remember to check out Glenn Greenwald now in the Guardian. Here he speaks about this "suffocatingly" dumb presidential election (and all the past ones), and why it's so hard to write seriously about it or wish anything except that it would be over quickly.




by Glenn Greenwald
Wednesday night, the GOP's nominee for vice-president, Paul Ryan, delivered a speech loaded with pure, fundamental deceit on its core claims. The New Republic's Jonathan Cohn has the clearest and most concise explanation of those falsehoods.
Reflecting the pure worthlessness and chronic failure of CNN, however, here is how that network's lead anchor, Wolf Blitzer, reacted after the speech was finished:

"So there he is, the Republican vice-presidential nominee and his beautiful family there. His mom is up there. This is exactly what this crowd of Republicans here, certainly Republicans all across the country, were hoping for. He delivered a powerful speech, Erin, a powerful speech. Although I marked seven or eight points, I'm sure the fact-checkers will have some opportunities to dispute if they want to go forward; I'm sure they will. As far as Mitt Romney's campaign is concerned, Paul Ryan on this night delivered."
Blitzer's co-anchor, Erin Burnett – who, the night before, described how she "had a tear in [her] eye" as she listened to Ann Romney's convention speech – added this journalistic wisdom:

"That's right. Certainly so. We were jotting down points. There will be issues with some of the facts. But it motivated people. He's a man who says I care deeply about every single word. I want to do a good job. And he delivered on that. Precise, clear, and passionate."
As Gawker's Louis Peitzman wrote:

"'A powerful speech' with only 'seven or eight' facts to dispute? Sounds like a winner … [I]n the end, isn't 'precise, clear, and passionate' more important than truthful?"
As perfect an exhibit as that is of the empty, rotted wasteland known as "CNN", when it comes to conveying the self-parodying inanity of The Most Trusted Name in News, nothing will ever top this tweet, from Blitzer last week:
blitzer
What could ever be better than that? The tagline for Blitzer's show, including on the Sea of Galilee story, boasts that he "delivers the most important news and political stories of the day".

But mocking CNN is to pick low-hanging fruit. The real issue is that CNN's vapid fixation on the dreaminess of our political leaders and "their beautiful families" dominates political discourse generally, especially during the nation's presidential election cycle, which drags on for a seemingly interminable 18 months – more than one third of the president's term – and drowns out virtually all other political issues.
The reason I write so little about the presidential election is that it's the ultimate expression of the CNN-ization of American politics: a tawdry, uber-contrived reality show that has less to do with political reality than the average rant one hears at any randomly chosen corner bar or family dinner. That does not mean the outcome is irrelevant, only that the process is suffocatingly dumb and deceitful, generating the desire to turn away and hope that it's over as quickly as possible.
 Read the rest here.

 Ron Paul won almost (who knows the real count?) 200 votes according to the Seattle Times.

Funny how the domineering Rmoney boys acted like it was only an embarrassment, treated the Paul people "atrociously," and ran their humiliated asses off the stage whenever it looked like someone might want to seriously resist their dismissal.

From the Nation:

As Santorum spoke, not on the message of the night but on a deeper message of outreach to working-class voters delivered in the language both parties once employed, the crowd that packed the great hall roared with approval — if not entirely for the political point, then surely for the relief from the drab repetition that defined “We Built It” night. This was not the empty rhetoric molded by the mandarins who have managed the life out of the fortieth Republican National Convention.

The only speech that might have been more engaging would have been the one that wasn’t delivered — by Paul.
Unfortunately, Paul was not being allowed near any official microphones.
Paul was the Romney challenger who stayed in the race longest, and who won almost 200 delegate votes. (The actual delegate vote for Paul was hard to measure, as RNC officials only announced votes for Romney during Tuesday night’s roll call, but the Seattle Times counted 193 for Paul.)
Not that many years ago, coming second in the convention vote might have guaranteed Paul a convention speaking slot.
At this convention, it guaranteed him—and his supporters—treatment so rough that his supporters, the largest dissident block on the floor, openly accused party chair Reince Priebus and his team of “corruption.”
Paul backers had enough delegates and support in the states to have their candidate’s name put in nomination. But that didn’t count in the Priebus party. As the New York Times noted: “Delegates from Nevada tried to nominate Mr. Paul from the floor, submitting petitions from their own state as well as Minnesota, Maine, Iowa, Oregon, Alaska and the Virgin Islands. That should have done the trick: Rules require signatures from just five states. But the party changed the rules on the spot. Henceforth, delegates must gather petitions from eight states.”
But Priebus did not just rewrite the rules of 2012. More ominously, he and the Romney team rewrote the rules of 2016. The party brass engineered a fundamental change in the next nominating process in order to assure that neither Paul — nor anyone else as interesting, or dissenting — will ever again be able to beat the establishment at its own game and win substantial numbers of delegates. The Paul delegates, many Tea Party conservatives and a number of renegade Romney delegates objected, creating the only real drama of the day, and the convention.
As Priebus and his allies gaveled objections down, the Paul delegates shouted their disapproval from the back-of-the-hall seats to which states with substantial Paul contingents had been relegated. “It’s a coronation,” said David Aiello, a medical student from Rhode who, like many Paul delegates, complained that “the party leaders, the people in charge, they don’t want a real debate. That’s obvious this week.”
Aiello, 25 years old, savvy, smart and highly engaged, is precisely the sort of young person the Grand Old Party needs to bring into its ranks. “That’s what I thought,” said Aiello. “But I’m not getting that vibe.”
Some Paul delegates were so offended that they exited the convention. Others speculated about whether they would back the GOP ticket. And libertarian-leaning young voters across the country got a signal that they weren’t really wanted at the Grand Old Party. In a fall race where it is likely that many states will be decided by narrow margins, the disregard for these voters (who might sit the election out, might vote for Libertarian Party nominee Gary Johnson or might even consider Obama and the Democrats) could come back to haunt the Romney campaign.
Paul said Tuesday that his delegates felt they had been treated “atrociously.”
And, no, Paul added, he will not be rushing to join the Romney team.
“I haven’t made up my mind,” he told Fox. “Put me down as undecided.”
Paul Ryan has tried to secure Paul’s endorsement, claiming that the Romney-Ryan ticket will appeal to Paul’s supporters. After all, the platform references the Gold Standard.
But Paul’s not so easily bought.
“I have not endorsed the ticket,” Paul explained Tuesday. “I endorsed the principles I have been talking about.… I endorse peace, prosperity, individual liberty and the Constitution. I am more intent on that than on the politics.”