Paul Krugman: The GOP's Privatization Pathology

Let me take a moment to flag an issue others have been writing about in the aftermath of Hurricane Sandy: The weird Republican obsession with killing the Federal Emergency Management Agency. Kevin Drum, a political blogger at Mother Jones magazine, has the goods: they just keep doing it.

"At a deep ideological level, Republicans believe that federal bureaucracies are inherently inept," Mr. Drum wrote on Oct. 30, "so when Republicans occupy the White House they have no interest in making the federal bureaucracy work. And it doesn't. Democrats, by contrast, take government services seriously and appoint people whose job is to make sure the federal bureaucracy does work. And it does.

Election Over, Time For Progressive Dems to Face the Truth

by Jeff Faux

 

Terrorized by the prospect of a complete takeover of the U.S. government by right-wing reactionaries—progressive Democrats swallowed their unhappiness with Barack Obama throughout the campaign. They gamely defended his policies on the economy, health care, budget priorities and other issues on which they felt betrayed in his first term.

We’ve now dodged the bullet of a Mitt Romney White House, so let’s get back to reality. Despite his campaign-trail populism, the president will continue the politics of accommodation to conservatives. Two of the three priorities he has set out for his next term are at the top of the GOP agenda: a “grand bargain” to cut government spending over the next 10 years and corporate tax reform that would cut rates—don’t hold your breath—and close loopholes. The third priority, rationalizing immigration law, is one of the few progressive ideas that also has the support of the Chamber of Commerce and the Business Roundtable.

Paul Krugman: Life, Death and Deficits

America’s political landscape is infested with many zombie ideas — beliefs about policy that have been repeatedly refuted with evidence and analysis but refuse to die. The most prominent zombie is the insistence that low taxes on rich people are the key to prosperity. But there are others.

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

4 Ways College Admissions Committees Stack the Deck in Favor of Already Privileged Applicants

By Kristin Rawls

November 16, 2012  |  Affirmative action has been the subject of much media debate recently, as the U.S. Supreme Court began hearing oral arguments on October 10 involving the controversial Fisher v. University of Texas “reverse racism” case. The plaintiff, Abigail Fisher, alleges that she was declined admission to the university as a result of affirmative action policies that left her at a disadvantage because she is white.

Contemporary debates about affirmative action policies that take race into account tend to presume that, in our post-Civil Rights era, the U.S. is a pure meritocracy that rewards the best and brightest. But this isn’t quite true. Affirmative action is used to offset other arbitrary identifiers that admissions committees are allowed to consider, many of which further enshrine existing social hierarchies according to race and class. Here are just four criteria admissions committees are allowed to consider that reward already privileged students.

Don’t Let Obama Cut Medicare, Medicaid, and Social Security

By Arun Gupta, The Progressive | Op-Ed 

f you voted this election, whether for Barack Obama, Jill Stein or even Mitt Romney, you did not vote for austerity. But that’s of little consequence to Obama and the Republicans. The two parties are currently drafting measures that will undermine Social Security, Medicaid and Medicare as the economy approaches the “fiscal cliff” at the end of this year when more than $600 billion in tax increases and spending cuts will kick in absent a new budget deal.

They hope to strike a “grand bargain,” but are bickering over how much to increase taxes and cut spending. The spotlight has been on the Bush tax cuts, which Obama campaigned on repealing for the rich, but this issue is a sleight of hand that distracts the public from the bipartisan plotting against your retirement income and healthcare.

Surely, you say, Obama will thwart the Republicans’ scheme to dismantle social welfare. After all, it’s well known that retirement programs are healthy. Social Security is solvent through 2033 and Medicare is solvent through 2024. Both can be strengthened for decades to come with relative tweaking.

This Was the First Class Warfare Election of Our Gilded Age — and the Middle Class Won Big

By Robert Borosage

November 15, 2012  |  In 2012, class warfare broke out in American politics. And from the president to key Senate races, the middle class won.

When the 2012 campaign began, the lousy economy made President Obama vulnerable. Republicans were favored to take back the Senate, given retirements in conservative states. Republican billionaires — the Koch brothers, Adelson and others — put up big money in the effort to have it all. Instead the president swept to victory, and Democrats gained seats in the Senate and the House.

Many factors contributed. Republicans learned once more the shortcomings of a stale, male, pale, Southern-based party in a nation of diversity. The GOP “legitimate rape” caucus helped give away two Senate seats. But too little attention has been paid to the new emerging reality. This was the first class warfare election of the new Gilded Age — and the middle class won big.

Europe's striking warning to US that austerity is no solution to fiscal cliff

As Obama opens the debate on the US's fiscal cliff, Europe is brought to a standstill by protests at cuts to the social safety net

Amy Goodman
guardian.co.uk, Thursday 15 November 2012 12.07 EST
Amaia Engana didn't wait to be evicted from her home. On 9 November, in the town of Barakaldo, a suburb of Bilbao in Spain's Basque country, officials from the local judiciary were on their way to serve her eviction papers. Amaia threw herself out of her fifth-floor apartment window, dying instantly on impact on the sidewalk below. She was the second person in two weeks in Spain to commit suicide as a result of an impending foreclosure action.

Her suicide has added gravity to this week's general strike radiating from the streets of Madrid to across all of Europe. As resistance to so-called austerity in Europe becomes increasingly transnational and coordinated, President Barack Obama and the House Republicans begin their debate to avert the "fiscal cliff". The fight is over fair tax rates, budget priorities and whether we as a society will sustain the social safety net built during the past 80 years.

Dean Baker: The Crisis of the Deficit Crisis Mongers

he gang for gutting Social Security and Medicare (aka “The Campaign to Fix the Debt”) are running in high gear. During the long election campaign they gathered dollars, corporate CEOs and washed up politicians for a full-fledged push in the final months of the year. They are hoping that the hype around the budget standoff (aka “fiscal cliff”) can be used for a grand bargain that eviscerates the country’s two most important social programs, Social Security and Medicare.

They made a point of keeping this plan out of election year politics because they know it is a huge loser with the electorate. People across the political and ideological spectrums strongly support these programs and are opposed to cuts. Politicians who advocated cuts would have been likely losers on Election Day. But now that the voters are out of the way, the Wall Street gang and the CEOs see their opportunity.

In financial ecosystems, big banks trample economic habitats and spread fiscal disease

by Morgan Kelly, Office of Communications

Like the impact of an elephant herd grazing on grassland, multinational banks shape the financial environment to an extent that far outweighs their small number. And like a contagious person on a transnational flight, when these giant, interconnected banks succumb to financial ills, they are uniquely positioned to infect wide swaths of the financial system.

Researchers from Princeton University, the Bank of England and the University of Oxford applied methods inspired by ecosystem stability and contagion models to banking meltdowns and found that large national and international banks wield an influence and potentially destructive power that far exceeds their actual size.

Did climate change controversy cause UVA's sacking of Teresa Sullivan?

The University of Virginia board that fired, then reinstated UVA's president earlier this year owes us all a full account of its actions

Robert P Geraci
guardian.co.uk, Wednesday 14 November 2012 12.40 EST

"Without an understanding of history, we can't understand the present or predict the future."

Being a historian myself, I couldn't agree more. But the statement jarred with me because the person making it, University of Virginia Board of Visitors (BOV) member Bobbie Kilberg, had implied exactly the opposite just half an hour before, when she urged UVA faculty senate chair George Cohen to stop asking why the board had unseated President Teresa Sullivan in June citing "philosophical differences" about the administration of the university. After uproar on the UVA campus and far beyond, the board was forced to reverse its decision two weeks later, reinstating Sullivan on 26 June.

Cohen, addressing the board at its 13 September meeting (pdf), had listed several reasons for doubting the most frequent justification the board has offered for pursuing Sullivan's removal: her supposed failure to produce a bold strategic plan. And he complained of the board's refusal to explain the lack of proper communication – with Sullivan, with the faculty, and among its own members – in the making and execution of its decision. Until the board provides a more compelling account of the ouster and its rationale, he asserted, the faculty's vote of no confidence from June cannot be reversed. Yet Kilberg insisted: "I just want to move ahead … I think we gain absolutely nothing by rehashing this."

Phony school “reform” agenda takes a beating

The media barely noticed, but voters in three states rejected the profit-driven fraud that is education "reform"

David Sirota

If your only source of news about American education came from docu-propaganda like “Waiting for Superman,” Hollywood politi-schlock like “Won’t Back Down” and elite-focused national news outlets in Washington, D.C., and New York City, you might think that the so-called education “reform” (read: privatization) movement was a spontaneous grass-roots uprising of good-old-fashioned heartlanders generating ever more mass support throughout the country. You would have no reason to believe it was a top-down, corporate-driven coalition of conservative coastal elites trying to both generally undermine organized labor and specifically wring private profit out of public schools, and you would similarly have no reason to believe it was anything but wildly popular in an America clamoring for a better education system.

In other words, you would be utterly misinformed — especially after last week’s explosive election results in three key states.

Paul Krugman: Deficit Hawks and Hypocrites

Back in 2010, self-styled deficit hawks — better described as deficit scolds — took over much of our political discourse. At a time of mass unemployment and record-low borrowing costs, a time when economic theory said we needed more, not less, deficit spending, the scolds convinced most of our political class that deficits rather than jobs should be our top economic priority. And now that the election is over, they’re trying to pick up where they left off.

They should be told to go away. 

The Grand Bargain is a Grand Lie

Why the scheme being negotiated in Washington is one-sided and totally unfair

by Cenk Uygur

 

First of all, let's establish that no one in Washington actually cares about balancing the budget. If they did, they would love this so-called Fiscal Cliff. It raises taxes and cuts spending, so it would massively reduce the deficit. Isn't that what all of Washington has been pretending to care about all of this time?

Second, understand that this so-called compromise they are talking about in order to avoid this supposed calamity is a trick. In fact, it'll be the greatest robbery in American history. Think about it -- they say they are worried about all those tax increases and spending cuts. But that's not true. The Grand Bargain would dramatically increase spending cuts, not alleviate them. So, in fact, the only thing they care about is paying less taxes, as always.

Five Misconceptions About Our Tattered Safety Net

Paul Buchheit for Buzzflash at Truthout

Mitt Romney said he wasn't concerned about the very poor, because they have a safety net. This is typical of the widespread ignorance about inequality in our country. Struggling Americans want jobs, not handouts, and for the most part they've paid for their "safety net." The real problem is at the other end of the wealth gap.

How many people know that out of 150 countries, we have the 4th-highest wealth disparity? Only Zimbabwe, Namibia, and Switzerland are worse.

It's not just economic inequality that's plaguing our country. It's lack of opportunity. It's a dismissal of poor people as lazy, or as threats to society. More than any other issue over the next four years, we need to address the growing divide in our nation, to tone down our winner-take-all philosophy, to provide job opportunities for people who want to contribute to society.

Cliff Notes on the Over-Hyped "Fiscal Cliff" Crisis

By Mattea Kramer, Chris Hellman
November 12, 2012  |  They don’t call it the "cliff” for nothing.  It’s the fiscal spot where a nation’s representatives can gather and cry doom.  It’s the place -- if Washington is to be believed -- where, with a single leap into the Abyss of Sequestration, those representatives can end it all for the rest of us.

In the wake of President Obama’s electoral victory, that cliff (if you’ll excuse a mixed metaphor or two) is about to step front and center. The only problem: the odds are no one will leap, and remarkably little of note will actually happen.  But since the headlines are about to scream “crisis,” what you need to understand American politics in the coming weeks of the lame-duck Congress is a little guide to reality, some Cliff Notes for Washington.

As a start, relax.  Don’t let the headlines get to you.  There’s little reason for anyone to lose sleep over the much-hyped fiscal cliff [5].  In fact, if you were choosing an image based on the coming fiscal dust-up, it probably wouldn’t be a cliff but an obstacle course [6] -- a series of federal spending cuts and tax increases all scheduled to take effect as 2013 begins. And it’s true that, if all those budget cuts and tax increases were to go into effect at the same time, an already weak recovery would probably sink into a double-dip recession.

Once Again—Death of the Liberal Class

By Chris Hedges

The presidential election exposed the liberal class as a corpse. It fights for nothing. It stands for nothing. It is a useless appendage to the corporate state. It exists not to make possible incremental or piecemeal reform, as it originally did in a functional capitalist democracy; instead it has devolved into an instrument of personal vanity, burnishing the hollow morality of its adherents. Liberals, by voting for Barack Obama, betrayed the core values they use to define themselves—the rule of law, the safeguarding of civil liberties, the protection of unions, the preservation of social welfare programs, environmental accords, financial regulation, a defiance of unjust war and torture, and the abolition of drone wars. The liberal class clung desperately during the long nightmare of this political campaign to one or two issues, such as protecting a woman’s right to choose and gender equality, to justify its complicity in a monstrous evil. This moral fragmentation—using an isolated act of justice to define one’s self while ignoring the vast corporate assault on the nation and the ecosystem along with the pre-emptive violence of the imperial state—is moral and political capitulation. It fails to confront the evil we have become. 

“The American Dream has run out of gas,” wrote the novelist J.G. Ballard. “The car has stopped. It no longer supplies the world with its images, its dreams, its fantasies. No more. It’s over. It supplies the world with its nightmares now. …”

Nomi Prins: Real Danger of “Obamacare”: Insurance Company Takeover of Health Care

Election rhetoric shuns the big picture in favor of the bigger platitude. Now that The Show is over, we are left with the equivalent of a Sunday morning hangover following a binge of promises and lies. We leave the theatre of political spectacle on steroids for the real world of unstable economy, a globally and publicly subsidized financial sector, and increased costs of living on everything from food to education to health-care; outpacing declining median incomes. The average cost for health insurance for a family is $15,745 per year vs. a median income of $50,502, or about half post-tax take-home pay.

“Obamacare” is the name commonly used for the Patient Protection and Affordable Care Act (PPACA) of 2010. The very moniker is indicative of how name-and-image-centric our world has become; Medicare was never called “Johnsoncare” when President Johnson signed it into law in 1965 and Johnson was not exactly a man of small-personality. At any rate, Obamacare or the PPACA ranks as one of the most misrepresented issues from the campaign, by both sides of the ever-slimming aisle.

Elizabeth Warren Heads to Washington, an Uncompromising Senator for the Left

E.J. Graff

November 7, 2012   

 

Massachusetts just sent the US Senate a pure and passionate voice for an unwavering progressive vision.
 
They were insane at the Warren party in a gilded ballroom at the Fairmont Copley in downtown Boston. I’ve never spent election night with a campaign before, but I don’t think I’ll ever spend election night at home alone again. With two huge screens up front cycling among the regional cable news and various TV news stations, the screams got louder every time the numbers flashed on screen. Every color that you can find in Massachusetts was here: ruddy faces descended from the Irish, gray no-product hair and purple fleece vests from the People’s Republic of Cambridge, young white guys with square glasses and cool sideburns, Harvard law students in sleek suits and perfectly plucked eyebrows, black guys in dreads, a range of brown tones from South Asia to south of the border. Shoulder to shoulder, so jammed it was hard to make it through the room, they were beaming, grinning, screaming like rock fans, delirious with glee.

Bill Black: Wall Street Urges Obama to Commit the Great Betrayal

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from Benzinga

Greetings from the Third Annual Kilkenomics Festival in Kilkenny, Ireland. The Irish bubble (as a percentage of GDP) was twice as large as the U.S. bubble. I’m returning to the U.S. to provide economic commentary for al Jazeera’s election night coverage. (Yes, I voted via absentee ballot.)

The Safety Net is the Glory of America and the Unending Wall Street Nightmare

Wall Street’s leading “false flag” group, the Third Way, has responded to the warnings that Robert Kuttner, AFL-CIO President Trumka, and I have made that if President Obama is re-elected our immediate task will be to prevent the Great Betrayal – the adoption of self-destructive austerity programs and the opening wedge of the effort to unravel the safety net (including Social Security, Medicare, and Medicaid).

Romney favors the same betrayal, but it would be political suicide for a Republican national leader to lead the attack on the nation’s most popular programs. Huge majorities of Americans oppose cuts in the safety nets. A majority of Republicans oppose such cuts and Democrats overwhelmingly oppose the cuts.

After the Election, a New Mandate – and New “Fiscal Cliff” Math

By Richard Eskow | November 8, 2012


President Obama was reportedly planning to reach out to House Majority Leader John Boehner today to begin negotiating a deal to avoid the so-called “fiscal cliff,” a series of spending cuts and tax hikes that will take effect unless Congress recinds the law that created it. That’s an appropriate and statesmanlike move. The public expects its leaders to work together on important issues.

The question is, what kind of deal? Boehner’s been acting as intransigent as ever, telling Reuters that Congressional Republicans will have “a mandate to not raise taxes.”
 

Hurricane Sandy: beware of America's disaster capitalists

The aftermath of the storm offers a chance to rebuild a fairer society. How can we seize it?

Naomi Klein
The Guardian, Tuesday 6 November 2012 13.22 EST

Less than three days after Sandy made landfall on the east coast of the United States, Iain Murray of the Competitive Enterprise Institute blamed New Yorkers' resistance to Big Box stores for the misery they were about to endure. Writing on Forbes.com, he explained that the city's refusal to embrace Walmart will likely make the recovery much harder: "Mom-and-pop stores simply can't do what big stores can in these circumstances," he wrote. He also warned that if the pace of reconstruction turned out to be sluggish (as it so often is) then "pro-union rules such as the Davis-Bacon Act" would be to blame, a reference to the statute that requires workers on public works projects to be paid not the minimum wage, but the prevailing wage in the region.

The same day, Frank Rapoport, a lawyer representing several billion-dollar construction and real estate contractors, jumped in to suggest that many of those public works projects shouldn't be public at all. Instead, cash-strapped governments should turn to public private partnerships, known as "P3s" in the US. That means roads, bridges and tunnels being rebuilt by private companies, which, for instance, could install tolls and keep the profits. These deals aren't legal in New York or New Jersey, but Rapoport believes that can change. "There were some bridges that were washed out in New Jersey that need structural replacement, and it's going to be very expensive," he told the Nation. "And so the government may well not have the money to build it the right way. And that's when you turn to a P3."

Paul Krugman: Let's Not Make a Deal

To say the obvious: Democrats won an amazing victory. Not only did they hold the White House despite a still-troubled economy, in a year when their Senate majority was supposed to be doomed, they actually added seats.

Nor was that all: They scored major gains in the states. Most notably, California — long a poster child for the political dysfunction that comes when nothing can get done without a legislative supermajority — not only voted for much-needed tax increases, but elected, you guessed it, a Democratic supermajority. 

The Importance of Elizabeth Warren

By SIMON JOHNSON

One of the most important results on Tuesday was the election of Elizabeth Warren as United States senator from Massachusetts. Her victory matters not only because it helps the Democrats keep control of the Senate but also because Ms. Warren has a track record of speaking truth to authority on financial issues – both to officials in Washington and to powerful people on Wall Street.

During the campaign, Ms. Warren’s opponent and his allies made repeated attempts to portray her as antibusiness. In the most bizarre episode, Karl Rove’s Crossroads GPS ran an ad that contended that she favored bailing out large Wall Street banks. All of this was misdirection and disinformation.

Can the Federal Reserve Help Prevent a Second Recession?

William Greider | November 7, 2012

Despite what you may have read in the newspapers or heard from the president’s cheerful speeches, the economy is not out of the danger zone. Despite some encouraging indicators recently, both the US economy and the world’s remain in perilous condition, still threatened by the larger catastrophe Washington officials thought they had averted. That is, a renewed global recession will compound the losses and can swiftly morph into the big D, for depression.

At least nine of the economies in Western Europe are already contracting. Their euro debt crisis threatens to pull down others. The anemic American recovery remains stalled by its blocked housing sector—there are still too many homeowners drowning in mortgage debt to trigger normal home sales and construction. Private investment is sagging, corporate profits softening too. Even China’s growth is slowing at an alarming rate.

If Congress fails to defuse the threat of the post-election “fiscal cliff,” austerity will be in the saddle for sure. The International Monetary Fund, not usually known for dire forecasts, predicts increased risk of worldwide stagnation, and has warned specifically against the “excessive fiscal consolidation” of austerity measures. Why haven’t the presidential candidates talked about this? Maybe for the same reason they didn’t talk about global warming: they saw no votes in either.

No Conspiracy Theory -- A Small Group of Companies Have Enormous Power Over the World

By Andrew Gavin Marshall
October 31, 2012  |  In October of 2011, New Scientist reported that a scientific study on the global financial system was undertaken by three complex systems theorists at the Swiss Federal Institute of Technology in Zurich, Switzerland. The conclusion of the study revealed what many theorists and observers have noted for years, decades, and indeed, even centuries: “An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.” As one of the researchers stated, “Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market… Our analysis is reality-based.” Using a database which listed 37 million companies and investors worldwide, the researchers studied all 43,060 trans-national corporations (TNCs), including the share ownerships linking them.[1~footnotes at the end of the article]

The mapping of ‘power’ was through the construction of a model showing which companies controlled which other companies through shareholdings. The web of ownership revealed a core of 1,318 companies with ties to two or more other companies. This ‘core’ was found to own roughly 80% of global revenues for the entire set of 43,000 TNCs. And then came what the researchers referred to as the “super-entity” of 147 tightly-knit companies, which all own each other, and collectively own 40% of the total wealth in the entire network. One of the researchers noted, “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network.” This network poses a huge risk to the global economy, as, “If one [company] suffers distress… this propagates.” The study was undertaken with a data set established prior to the economic crisis, thus, as the financial crisis forced some banks to die (Lehman Bros.) and others to merge, the “super-entity” would now be even more connected, concentrated, and problematic for the economy.[2]

Peter Orszag of Bank Welfare Queen Citigroup is Selling Catfood Futures Hard

The Obama victory was less than 24 hours old when the Rubinite faction of the Democratic party was out full bore selling “reforming” Social Security as the adult solution to the coming budget impasse, giving it higher priority than any other measure on the table while simultaneously admitting that this is not even a pressing (let alone real) problem.

And the worse is that this snakeoil salesmanship, which comes from former OMB director, now Citigrgoup vice chairman of corporate and investment banking Peter Orszag, is almost certainly an Obama trial balloon. It’s no secret that Obama has long viewed cutting, whoops, “reforming” Social Security and Medicare, as one of his fondest goals. He made that clear shortly before he was inaugurated, in a dinner with conservatives hosted by George Will. He even volunteered in the debates that he and Romney were on the same page as far as these programs were concerned. So it’s reasonable to view Orszag as fronting for the Administration.