05 January 2013

The Dysfunctional Origins Of The Fiscal Cliff Fiasco

Brian Beutler, January 2, 2013, 1:52 PM

If the end of the 112th Congress differed in any operational way from the rest of the 112th Congress it was that the closing showmanship oversold the consequences of inaction.

The New Year’s drama had all the trappings of a typical 112th Congress cliffhanger — up to and including a final pre-midnight vote denouement — but this time around the deadline that was supposedly driving the action had actually passed without consequence. The mess, such as it was, could’ve been cleaned up in the days and weeks ahead.

So the theatrics were partly self-imposed.

Eleanor - The Radical Roosevelt Deserves Her Own Worthy Film

By Peter Dreier, Truthout | Op-Ed

Eleanor Roosevelt, an important historical figure, has never been depicted in movies, including "Hyde Park on Hudson" accurately. It's about time!

Many younger Americans probably know very little about Eleanor Roosevelt, and if their first encounter with her is the new film Hyde Park on Hudson, what they'll learn is incredibly misleading and inaccurate.  Other films - including Sunrise At Campobello (1960), the two-part Eleanor & Franklin HBO mini-series (1976), Eleanor, First Lady of the World (1982) and Warm Springs (2005) - have depicted different aspects of her life. But Hollywood can't seem to make a film that accurately portrays the depth and influence of Eleanor's radicalism.

Hyde Park on Hudson focuses on the relationship between her husband, President Franklin Roosevelt (played by Bill Murray) and his distant cousin Margaret "Daisy" Stuckley (Laura Linney) during a weekend in 1939 when the King and Queen of England are visiting the Roosevelts at their second home in upstate New York. The film shows FDR and Stuckley having a sexual love affair, although many historians believe that their relationship was primarily a flirtation. Given its focus on the affair, perhaps it is not surprising that the film treats Eleanor (Olivia Williams) primarily as a ceremonial helpmate whose major function was to help FDR negotiate the social rituals of being president. In the film, the biggest controversy Eleanor dealt with was whether to serve hot dogs to the British royals.

Paul Krugman: Perspective on the Deal

To make sense of what just happened, we need to ask what is really at stake, and how much difference the budget deal makes in the larger picture.

So, what are the two sides really fighting about? Surely the answer is, the future of the welfare state. Progressives want to maintain the achievements of the New Deal and the Great Society, and also implement and improve Obamacare so that we become a normal advanced country that guarantees essential health care to all its citizens. The right wants to roll the clock back to 1930, if not to the 19th century.

Paul Krugman: Uninformed Politicians Pushing US Toward Austerity

Some of us had fun with a recent Business Insider poll finding that by a large margin, people who thought they knew something about the fiscal cliff believed that it would increase, not reduce, the deficit.

Hahaha — although I actually have a lot of sympathy for ordinary voters, who don't follow these things closely but know that everyone important has been warning for years that the budget deficit is Worse Than Hitler or something. How are they supposed to know that those very same people are now screaming that the deficit is coming down too fast? I have less sympathy for major political figures who also can't get it straight.

6 Reasons Joseph Stiglitz and Other Top Economists Think Means-Testing Medicare & Social Security Is a Destructive Idea 

By Lynn Stuart Parramore

December 31, 2012  |  In Washington-speak, “means-testing” is a scheme to deny or reduce Medicare and Social Security benefits for people who are “too wealthy” in the name of saving money. It’s a counterproductive, harmful idea, but one that well-intentioned liberals often get snookered into embracing.

It’s easy to see why. Economic inequality has exploded to dangerous levels, and the argument for means-testing seems to appeal to a powerful sense that the rich are getting more than their fair share at the expense of everyone else. Combine this with the deficit hysteria promoted by conservatives, and the trap is set.

Don’t fall into it. The truth is that means-testing is a sneak attack on vital programs meant to weaken and eventually destroy them. There’s a reason why an ultra-conservative like Paul Ryan pushed means-testing during the presidential campaign. And there’s a reason why private equity billionaire Pete Peterson, enemy of Social Security and Medicare who served in Richard Nixon's cabinet, makes a special point of bringing up means-testing [3] when he is talking to liberals.

31 December 2012

Michael Hudson: America’s Deceptive 2012 Fiscal Cliff, Part II

Today’s economic warfare is not the kind waged a century ago between labor and its industrial employers. Finance has moved to capture the economy at large, industry and mining, public infrastructure (via privatization) and now even the educational system. (At over $1 trillion, U.S. student loan debt came to exceed credit-card debt in 2012.) The weapon in this financial warfare is no larger military force. The tactic is to load economies (governments, companies and families) with debt, siphon off their income as debt service and then foreclose when debtors lack the means to pay. Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings. And indebting labor means that it no longer is necessary to hire strikebreakers to attack union organizers and strikers.

Workers have become so deeply indebted on their home mortgages, credit cards and other bank debt that they fear to strike or even to complain about working conditions. Losing work means missing payments on their monthly bills, enabling banks to jack up interest rates to levels that used to be deemed usurious. So debt peonage and unemployment loom on top of the wage slavery that was the main focus of class warfare a century ago. And to cap matters, credit-card bank lobbyists have rewritten the bankruptcy laws to curtail debtor rights, and the referees appointed to adjudicate disputes brought by debtors and consumers are subject to veto from the banks and businesses that are mainly responsible for inflicting injury.
 

The Top 12 Political Fallacies of 2012

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Our nation was gripped by so many fallacies and delusions in 2012 that the whole Mayan calendar end-of-the-world thing didn’t even make the list.

Even those apocalyptic prophecies were more plausible than the idea that cutting Social Security will help the deficit, that government spending cuts will jump-start the economy, there were no crimes on Wall Street, or that we live in a “divided nation” whose “center” wants more business as usual in Washington.

Here then, without further ado, are our Top 12 Political Fallacies for 2012.
 

Chris Hedges Explains How Entire Regions Within the US Are Treated Like Exploited Colonies

By Vince Emanuele

December 29, 2012  |  Emanuele: In Chapter One of your new book, Days of Destruction, Days of Revolt, you describe the horrendous conditions endured by the Native American population living in Pine Ridge, South Dakota. This population earns, on average, anywhere from $2,600-$3,500 a year, with 49% of the total population living in official poverty status. However in a broad sense, and to inject a historical context, you describe the systematic destruction of Native culture and society; namely, through the practices of physical termination and cultural genocide. Can you talk about why you began this journey in South Dakota and the importance of recognizing previous national injustices?

Hedges: Well, it's important because that's where the project of limitless expansion and exploitation, especially the plundering of natural resources, began. There you had the timber merchants and the railroad magnates, mine speculators, and land speculators seizing territory on the western plains and exterminated the native populations who resisted. Many of which did not even resist. Then, herding the remnants into what were originally prisoner of war camps, which then finally became tribal residencies and eventually reservations--breaking the natives capacity for self-sufficiency, while creating a culture of dependency. Remember, all of this is for profit. This became the template for which the American Empire expanded: the Philippines, Cuba and all throughout Latin America. And today, places like Iraq and Afghanistan. So that's why we wanted to examine where this ideology first took root; where it was first formed; and what happened to these peoples, because in an age of corporate capitalism, where there are no impediments left, what happened to them, is going to happen to us. In the end, we're all going to be herded on some form of a reservation. 

This book is about these "sacrifice zones." Whether its in Pine Ridge, or southern West Virginia in the coal mines, or whether that be urban decay such as Camden, New Jersey, which is per capita the poorest city in the country, and on target this year to be the most dangerous, per capita in the country. As we've reconfigured American society, there's no longer any mechanisms to restrain these forces. And I think the other reason Pine Ridge is important, is because the native communities were structured very differently. People who hoarded and kept everything for themselves were disposed; everything was communal; there was an understanding that all forms of life, including the natural world, were sacred. This is unacceptable in a capitalist society where human and natural life are commodities that you exploit for money until exhaustion or collapse. We see the devastation visited on the western plains now being visited in places like the Arctic, where 40% of the summer sea-ice now melts, and the response is that it's a business opportunity, where people go and slam down half a billion dollar drill bits. It's insanity of course, because in the end, these forces will not only kill us off, but they'll kill themselves off as well. That is the awful logic behind it. I think Pine Ridge provides a window into how this ideology took root, and how it works.

There's Only One Way To Fix The Deficit — And Actually It's Totally Painless

Joe Weisenthal | Dec. 28, 2012, 1:51 PM

People who insist that the US has a gigantic "spending problem" are ignorant of what really drives the deficit and the national debt, as Henry Blodget easily demonstrated in a series of charts.
 Closing the deficit is not just about lowering spending, relative to GDP, but also about increasing revenue from our very low levels.

So how is that accomplished?
 

Yank the Chain: Washington's Terrible New Social Security Fix

Timothy Noah
December 11, 2012 | 10:48 am

One “fiscal cliff” remedy favored by House and Senate leaders that President Obama might actually go for is changing how cost-of-living increases are calculated for Social Security recipients. The change has some appeal because it could save $112 billion over ten years. Worse ideas have been tossed Democrats’ way—raising the Medicare eligibility age is one, as TNR’s Jonathan Cohn explains elsewhere on this site. But “chaining” the Consumer Price Index (CPI) is a benefit cut disguised as a technical fix. And if budget constraints require cuts in Social Security benefits, those cuts should be targeted at the most affluent recipients—as chaining does not.
 

Michael Hudson: America’s Deceptive 2012 Fiscal Cliff: Part I

How today’s fiscal austerity is reminiscent of World War I’s economic misunderstandings

When World War I broke out in August 1914, economists on both sides forecast that hostilities could not last more than about six months. Wars had grown so expensive that governments quickly would run out of money. It seemed that if Germany could not defeat France by springtime, the Allied and Central Powers would run out of savings and reach what today is called a fiscal cliff and be forced to negotiate a peace agreement.

But the Great War dragged on for four destructive years. European governments did what the United States had done after the Civil War broke out in 1861 when the Treasury printed greenbacks. They paid for more fighting simply by printing their own money. Their economies did not buckle and there was no major inflation. That would happen only after the war ended, as a result of Germany trying to pay reparations in foreign currency. This is what caused its exchange rate to plunge, raising import prices and hence domestic prices. The culprit was not government spending on the war itself (much less on social programs).

How Bad Is Our Debt Problem, Anyway? And Will a Deal Fix It?

by Theodoric Meyer
ProPublica, Dec. 28, 2012, 12:34 p.m.

President Obama will meet with congressional leaders today in another attempt to avert the fiscal cliff — the automatic tax increases and spending cuts set to take effect Jan. 1 unless Congress can strike a deal. The cuts and tax hikes, which total more than $500 billion, are so large and so sudden that many economists fear they would plunge the country back into recession.

As Washington tries to hash out a deal, we've taken a step back to break down the numbers behind our deficit — how it grew so big, why it is actually shrinking and whether a deal can bring it under control.

Who paid for the Log Cabin Republicans' anti-Hagel NYT ad?

The gay GOP group confirms the ad was funded by outside donors, but refuses to identify them or their cause

Glenn Greenwald
guardian.co.uk, Sunday 30 December 2012 07.29 EST

Last Thursday, the gay GOP group Log Cabin Republicans (LCR) placed a full-page ad in the New York Times that attacked Chuck Hagel as anti-Israel and anti-gay and urged President Obama not to appoint him as Defense Secretary. This was quite a strange event for multiple reasons.

First, full-page ads in the NYT are notoriously expensive, particularly for a small, poorly-funded group like LCR; published rates indicate that such an ad can cost well in excess of $100,000, though some discounts are possible with flexible dates (five years ago, the published rate for a black-and-white full-page political ad was $142,000). Second, LCR - which touts itself as "the only Republican organization dedicated to representing the interests of LGBT Americans and their allies"- has virtually no demonstrated prior interest in Israel; the only mention of that country on its entire website is as part of a laundry list of nations which allow gay and lesbians to serve in the armed forces, while its only substantive position on Iran policy is a tepid 2010 statement advocating a single 2010 bill for increased sanctions, something which Obama supported and signed (the group did lend its name to a coalition against Iranian nuclear proliferation). Third, since when does LCR - which endorsed McCain/Palin in 2008 and Mitt Romney with his abundant anti-gay advocacy in 2012 - oppose GOP officials on the ground that they have some anti-gay aspects to their record?

Deprogramming Progressives Indoctrinated into Supporting Austerity

By Bill Black

A little bit of economics can be a truly terrible thing, for the introductory classes in micro and macro-economics are the most dogmatic and myth-filled part of the neo-liberal curriculum. Dogmas that have been falsified for 75 years (such as austerity) are taught as revealed truth. The poor indoctrinated student is then launched into the world “knowing” that austerity is the answer and that mass unemployment and prolonged recessions are small prices to be paid (by others) to achieve the holy grail of a balanced budget. Students are taught that national budgets are really just like household budgets. These dogmas are not simply false, they are self-destructive and cruel. Neo-liberal economics is so bad and has gone downhill at such a rapid rate that it now worships the economic analog to bleeding patients – austerity – as a response to a Great Recession. Millions of people are indoctrinated annually into believing this long-falsified nonsense, and that includes people who consider themselves progressives.
  

Paul Krugman: Is Growth Over?

The great bulk of the economic commentary you read in the papers is focused on the short run: the effects of the “fiscal cliff” on U.S. recovery, the stresses on the euro, Japan’s latest attempt to break out of deflation. This focus is understandable, since one global depression can ruin your whole day. But our current travails will eventually end. What do we know about the prospects for long-run prosperity?

The answer is: less than we think

New Report Shows Tectonic Shifts in Campaign Spending

Wednesday, 26 December 2012 09:23  
By Adam Crowther, Citizen Vox | Report 

The U.S. Supreme Court was so determined to treat outside groups fairly in its 2010 Citizens United v. Federal Election Commission (FEC) decision that it put these groups on course to supplant the candidates themselves as the dominant voices in our elections.

That is the finding of a newly released Public Citizen report, Outside Money Takes the Inside Track. The report compares spending by outside groups, which were permitted as a result of Citizens United to use unlimited contributions to influence elections, with that of candidates and national parties, which are subject to contribution limits.

Ask a Democrat: On Social Security, Which Side Are You On?

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This is a moment of moral clarity. Right now there are only two sides in the Social Security debate: the side that says it’s acceptable to cut benefits — in a way that raises taxes for all income except the highest — and the side that says it isn’t.

It’s time to ask our leaders — and ourselves — a simple question: Which side are you on?

Nancy Pelosi says she can convince most Congressional Democrats to “stick with the President” as he pursues his gratuitous and callous plan to cut Social Security benefits as part of a deficit deal — even though Social Security does not contribute to the deficit.

Dean Baker: Mr. Incompetent, the Economy Wrecker Alan Greenspan, Was Central to the Formation of the Campaign to Fix the Debt

Monday, 24 December 2012 17:36

Alan Greenspan will go down in history as the person who has done more damage to the U.S. economy and society that anyone who was not a foreign enemy. In fact the destruction he wreaked through his incompetence would also exceed the damage caused by almost all would-be enemies as well.

Greenspan accomplished the remarkable feat as Fed chair of ignoring the growth of the $8 trillion housing bubble. This bubble could not have been easier to see if it had been 500 feet high and lit up with huge neon signs saying "Huge Housing Bubble." But Greenspan insisted the bubble was not there.

Were US Marines Used as Guinea Pigs on Okinawa?

Friday, 21 December 2012 20:59  
By Jon Mitchell, The Asia-Pacific Journal | News Analysis 

Growing evidence suggests that the U.S. military tested biochemical agents on its own forces on the island in the 1960s.

Newly discovered documents reveal that 50 years ago this month, in December 1962, the Pentagon dispatched a chemical weapons platoon to Okinawa under the auspices of its infamous Project 112. Described by the U.S. Department of Defense as "biological and chemical warfare vulnerability tests," the highly classified program subjected thousands of unwitting American service members around the globe to substances including sarin and VX nerve gases between 1962 and 1974. [1]

According to papers obtained from the U.S. Army Heritage and Education Center in Carlisle, Pennsylvania, the 267th Chemical Platoon was activated on Okinawa on Dec. 1, 1962, with "the mission of operation of Site 2, DOD (Department of Defense) Project 112." Before coming to Okinawa, the 36-member platoon had received training at Denver's Rocky Mountain Arsenal, one of the key U.S. chemical and biological weapons (CBW) facilities. Upon its arrival on the island, the platoon was billeted just north of Okinawa City at Chibana — the site of a poison gas leak seven years later. Between December 1962 and August 1965, the 267th platoon received three classified shipments — codenamed YBA, YBB and YBF — believed to include sarin and mustard gas. [2]

Georgia’s Hunger Games

Fewer than 4,000 adults in the southern state receive welfare, even as poverty is soaring. How Georgia declared war on its poorest citizens—leaving them to fight for themselves.

By Neil deMause  |  Posted Wednesday, Dec. 26, 2012, at 4:00 AM ET

When the economy crashed in 2008, millions of Americans lost their jobs. Applications for food stamps soared. So did attendance at emergency food providers—soup kitchens and food pantries—that help the estimated 50 million people, working and non-working, who can't afford enough groceries to get through the month.

Unlike in past economic downturns, though, the welfare rolls barely budged. Where 15 years ago 68 percent of poor Americans received cash via Temporary Assistance to Needy Families (as welfare was officially renamed in 1996), today only 27 percent of Americans with incomes low enough to qualify for cash benefits receive them. As the New York Times' Jason DeParle discussed in a front-page article earlier this year, the resulting welfare gap has left at least 4 million families with neither jobs nor cash aid.