Russ Feingold: Democrats Sold Out in 2012 and Need to Quit Big Money

—By Andy Kroll  | Thu Jan. 10, 2013 9:01 AM PST

President Obama's decision to let his 2013 inauguration committee accept corporate cash and million-dollar donations marks quite a reversal for the president: for his first inaugural in 2009, he capped individual donations at $50,000 and banned corporate money. The Associated Press calls the decision "part of a continuing erosion of Obama's pledge to keep donors and special interests at arm's length of his presidency." But for former Sen. Russ Feingold, it's yet another sell-out by his friends in the Democratic Party to the big-money forces so dominant in politics today.

 

Paul Krugman Talks to Bill Moyers About How to Speed Recovery -- And Why He Doesn't Want to Run the Treasury

By Bill Moyers

January 11, 2013  |  Nobel Prize-winning economist and New York Times columnist Paul Krugman argues that saving money is not the path to economic recovery. Instead, he tells Bill Moyers, we should put aside our excessive focus on the deficit, try to overcome political recalcitrance, and spend money to put America back to work. Krugman offers specific solutions to not only end what he calls a “vast, unnecessary catastrophe,” but to do it more quickly than some imagine possible. His latest book, End This Depression Now!, is both a warning of the fiscal perils ahead and a prescription to safely avoid them.

A transcript of Krugman's interview with Bill Moyers on the PBS show, Moyers & Company, appears below the video.

[...]

BILL MOYERS: Welcome. Just before the holidays, we asked you, our viewers, to recommend the one book you thought President Obama should read as he prepares himself for his second term in office. As ever, your suggestions were thoughtful, provocative and eclectic – from books by authors who have appeared as guests on this broadcast, to works by the late John Steinbeck and A. A. Milne, the creator of Winnie-the-Pooh. You can see a list at our Web site, BillMoyers.com [4].

Many of you asked for my choice, too. This is it – Paul Krugman’s End This Depression Now! It’s both prescription and warning: our current obsession with slashing the deficit and avoiding that well-known and worn fiscal cliff is killing us, Krugman writes, getting in the way of what really needs to be done – which is dedicating government to creating jobs and getting us back to full employment. He blames not only Congress but the White House.
 

Paul Krugman: Coins Against Crazies

So, have you heard the one about the trillion-dollar coin? It may sound like a joke. But if we aren’t ready to mint that coin or take some equivalent action, the joke will be on us — and a very sick joke it will be, too.

Let’s talk for a minute about the vile absurdity of the debt-ceiling confrontation. 

Under the Constitution, fiscal decisions rest with Congress, which passes laws specifying tax rates and establishing spending programs. If the revenue brought in by those legally established tax rates falls short of the costs of those legally established programs, the Treasury Department normally borrows the difference.

The Latest Myth About the Government’s Mishandling of the Housing Market

by Jesse Eisinger
ProPublica, Jan. 9, 2013, 12 p.m.

No matter how many times people debunk the notion that government policy created the housing bubble, it doesn't die. It's part of what the blogger Barry Ritholtz has called the "big lie" of the financial crisis. Now, we are having another argument about whether the government is creating a new housing disaster for taxpayers.

The target this time: the Federal Housing Administration, the government's mortgage insurer mostly for low-to-moderate income and minority borrowers.

Dean Baker: Paul Krugman for Treasury Secretary

Posted: 01/08/2013 7:07 pm

That headline has all the D.C. insider types rolling their eyes right now, since they know it is absurd to imagine that President Obama would pick Krugman to be Timothy Geithner's replacement as Treasury Secretary. They aren't wrong, it is absurd. There is no way on earth that Obama would select Krugman. This fact tells us a great deal about what is wrong with the shape of the economic policy being debated in the nation's capital.

First of all, let's get the obvious out of the way. No one can question Krugman's qualifications for the administration's top economic policy position. He is a winner of both the John Bates Clark award, which is given out every second year to the best economist under age 40, and the Nobel Prize. He has published hundreds of articles in academic journals, many of them leading to path-breaking innovations in economic theory. Arguing that he lacks the background is just silly.

Karl Rove accidentally unmasks the GOP’s debt ceiling ruse

Posted by Greg Sargent on January 10, 2013 at 11:47 am

I know you’re tired of hearing that the Republicans’ position on the debt ceiling is incoherent and that their claims of leverage are greatly exaggerated. But now we have none other than Karl Rove confirming all of this for us.

Rove’s latest column rips into Obama for supposedly mischaracterizing the GOP position on the debt limit. He quotes Obama saying: “We can’t not pay bills that we’ve already incurred.”

A Checkerboard Strategy for Regaining the Progressive Initiative

Gar Alperovitz
Posted: 01/07/2013 8:06 pm

President Obama is Time magazine's "Person of the Year" -- the first Democratic president to receive two consecutive popular-vote majorities since Franklin Delano Roosevelt. Yet these are clearly tough times for progressives. Everything progressives have fought for is seemingly on the chopping block nationally, and in many states and cities. Programs are being cut; public assets are being sold off; school teachers are losing their jobs; unions are being attacked; pension and health care benefits are being slashed -- even Social Security is being challenged.

Progressives, in short, remain on the defensive.
 

Two New Fraud Deals Show Wall Street’s Washington Insiders At Work

By Richard Eskow | January 8, 2013


It must’ve been like old home week when the old gang of Wall Street and Washington insiders finalized a couple more cushy settlements last week.

Everybody knew the drill: Ignore the potential criminal charges and agree on settlement figures they think the public will swallow – figures that are big enough to sound impressive but far smaller than the banks’ ill-gotten gains.  They’ve done this dozens of times before.

But there was an empty chair at the negotiating table.
 
 

Rick Perlstein: Why I Am A Liberal

January 7, 2013 - 10:11 AM ET


This past October, I participated in a debate at North Carolina State University sponsored by the Libertarian group Young Americans for Liberty. The YAL debates join a libertarian, conservative and a liberal. I held down the liberal pole. Why two positions to right of center and only one to the left? Good question, given that I find the potential breach within the the Democratic coalition—between, you might say, Keynesians and austerians, Krugmanites and Obamaites—more profound and potentially more portentous than that between conservatives and libertarians within the Republican coalition, but that’s an issue for another post. For this one, though, my inaugural post, the first of my thrice-weekly missives I’ll be blasting your way here at TheNation.com, you get a manifesto: my opening statement at that debate.

Richard Kim, the editor of this site, asked me for a few lines about what I’m going to be writing about here. I wrote back, “I’ll be interpreting contemporary political developments in light of their historical context. I’m especially interested in educating folks on the left about the organic continuities in right-wing thought and action—since the 1960s, since the 1920s, even going back to the eighteenth century. Too often we act as if the forces we’re fighting came about only the day before yesterday.” But first, before I get into all that, here are some “priors,” as the philosophers put it, some thoughts about where I’m coming from and why, the very best brief statement I could muster, for an audience of mostly conservative Southern college students about why I am a card-carrying liberal, and why they should be to.
 

Matt Taibbi: Secrets and Lies of the Bailout: One Broker's Story

I have a feature in the new issue of Rolling Stone called "Secrets and Lies of the Bailout," which focuses in large part on the seemingly intentional policy of deception in the government's rescue of the financial sector. The government didn't just bail out Wall Street with money: It also lied on Wall Street's behalf, calling unhealthy banks healthy, and helping banks cover up just how much aid they were getting in secret.

Proponents of the bailouts will say that whatever the government did, it worked. The economy didn't collapse as it appeared it might in late 2008, and the stock markets are puffed up all over again, as financial companies in particular are back making huge profits.

But in the course of researching the magazine piece, we discovered definite victims of the myriad deceptions that became a baked-in feature of the bailouts. One of those victims was a southern investment broker who lost lots of his own money, lost money for family members who'd invested with him, and (maybe worst of all) lost plenty of his clients' money, when he made investment decisions based on what turned out to be incomplete information.

 

ANOTHER Report On Jobs Lost To China “Trade”

By Dave Johnson | January 8, 2013

In DC the geniuses are busy with the billionaire agenda, fighting the things We, the People do to make our lives better. Meanwhile, in the real world yet another report is out that shows how one-sided trade deals with China and others are killing off our jobs and factories and industries and economy. And while DC’s geniuses work themselves into a frenzy over the budget deficit — money that we Americans mostly to each other — they ignore the real problem: the trade deficit, and hundreds of billions of our dollars continue to bleed out of our country, year after year. 

New York Times Article Tells Big Lies on Impact of Fiscal Cliff Deal on Rich v. Ordinary Americans

If the media was licensed, the New York Times story, “After Fiscal Cliff Deal, Tax Code May Be the Most Progressive Since 1979,” would be grounds for disbarment. I flagged the piece as a Big Lie in comments yesterday, and figured that since anyone who was either old enough to have been paying taxes in the 1980s or had minimal Google skills could ascertain its claims were nonsense, that it would be debunked elsewhere. Instead, it was apparently tweeted actively by soi-disant liberals on Saturday.

This piece is one of a series of changes over the last month of so of a ratcheting up in the propaganda war against what is left of middle class America. It appears that the effort to sell citizens the necessity of cutting Social Security and Medicare has led our fearless leaders to take us across an event horizon into a late Soviet “all propaganda all the time” footing.
 

Debt! How Human Beings Become Enslaved to Powerful Interests

By Jeffery Atik

January 3, 2013  |  Debt is ubiquitous. It is also insidious, since debt imposes a power relationship (amplified by the state) between borrower and creditor. We are diminished by debt. The ongoing financial crisis has revealed the degree to which most Americans (myself included, alas) are seriously indebted — and being so, we are more controlled than controlling.

David Graeber — of Occupy Wall Street fame — has written, in Debt: The First 5,000 Years, a grand intellectual project and a call for action. He investigates debt across time and across cultures and finds it to be a primary institution, preceding exchange, money and any notion of “the economy.” Debt is a building block for ever more elaborate social organization, because it creates fluid structures of subordination. Though in principle the sum of all debts should equal the sum of all credits, in practice debtors are many and creditors few. Today, there is growing concern about income inequality in America — but it is wealth inequality that captures the relation of debtors and creditors.

Debt is central to most Americans' life experience. We obtain housing, education, transport and medical services through our access to credit — and as such we spend most of our lives deeply indebted. How dispiriting debt is; it gnaws at us, this non-dischargeable burden.
 

Secret Goldman Team Sidesteps Volcker After Blankfein Vow

By Max Abelson - Jan 8, 2013

 

Sitting onstage in Washington’s Ronald Reagan Building in July, Lloyd C. Blankfein said Goldman Sachs Group Inc. (GS) had stopped using its own money to make bets on the bank’s behalf.

“We shut off that activity,” the chief executive officer told more than 400 people at a lunch organized by the Economic Club of Washington, D.C., slicing the air with his hand. The bank no longer had proprietary traders who “just put on risks that they wanted” and didn’t interact with clients, he said.

That may come as a surprise to people working in a secretive Goldman Sachs group called Multi-Strategy Investing, or MSI. It wagers about $1 billion of the New York-based firm’s own funds on the stocks and bonds of companies, including a mortgage servicer and a cement producer, according to interviews with more than 20 people who worked for and with the group, some as recently as last year. The unit, headed by two 1999 Princeton University classmates, has no clients, the people said.
 

Paul Krugman: As Another Confrontation Looms, Will Obama Stand His Ground?

Tuesday, 08 January 2013 09:56 

To make sense of what happened with last week’s deal in the United States, we need to ask what is really at stake, and how much difference it 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 to implement and improve Obamacare so that the United States becomes 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.

GOP Threat: Cut Social Security and Medicare or we’ll kill the economy. Americans say NO to both.

By Roger Hickey | January 6, 2013

Here we go again. Republicans are very clear about their latest extortion threat to the American people: Unless you cut Social Security and Medicare benefits, within the next two months we will throw the US economy back into recession – by refusing to allow the US raise the debt ceiling and pay our bills – or by pushing the economy over another fiscal cliff of deep spending cuts and tax increases – or by shutting down the government by refusing to pass a continuing budget resolution. 

Paul Krugman: The Big Fail

It’s that time again: the annual meeting of the American Economic Association and affiliates, a sort of medieval fair that serves as a marketplace for bodies (newly minted Ph.D.’s in search of jobs), books and ideas. And this year, as in past meetings, there is one theme dominating discussion: the ongoing economic crisis. 

This isn’t how things were supposed to be. If you had polled the economists attending this meeting three years ago, most of them would surely have predicted that by now we’d be talking about how the great slump ended, not why it still continues. 

So what went wrong? The answer, mainly, is the triumph of bad ideas.

Robert Reich: The Hoax of Entitlement Reform

Sunday, January 6, 2013

It has become accepted economic wisdom, uttered with deadpan certainty by policy pundits and budget scolds on both sides of the aisle, that the only way to get control over America’s looming deficits is to “reform entitlements.”

But the accepted wisdom is wrong.

The Deadly Secret About the Fiscal Cliff Charade

By Richard (RJ) Eskow

January 4, 2013  |  Imagine a nation with a terrible problem – one its leaders refuse to discuss. The problem will needlessly drain trillions of dollars from its economy in the next ten years.

Now imagine that this problem also robs that nation’s citizens of life itself, draining years from their lifespans while depriving them of large sums of money. Imagine that it sickens and disables countless others, drives many people into bankrupcty, and kills more than two newborn infants out of every thousand born.

Imagine that fixing this problem would make result in a dramatic decline in publicly-held debt. It wouldn’t just “help” the debt problem, mind you – it would cause that debt to plunge [3].

And now imagine a national “deficit debate” which completely ignores this problem.
 

Michael Hudson: America’s Deceptive 2012 Fiscal Cliff, Part IV– Why Financial and Tax Reform Should Go Together

Taxes pay for the cost of government by withdrawing income from the parties being taxed. From Adam Smith through John Stuart Mill to the Progressive Era, general agreement emerged that the most appropriate taxes should not fall on labor, capital or on sales of basic consumer needs. Such taxes raise the break-even cost of employing labor. In today’s world, FICA wage withholding for Social Security raises the price that employers must pay their work force to maintain living standards and buy the products they produce.

However, these economists singled out one kind of tax that does not increase prices: taxes on the land’s rental value, natural resource rents and monopoly rents. These payments for rent-extraction rights are not a return to “factors of production,” but are privatized levy reflecting privileges that have no ongoing cost of production. They are rentier rake-offs.

 

In the Coal Fields, a Novel Way to Get Rid of Pensions Is Born

Friday, 04 January 2013 10:03  
By Mike Elk, In These Times | News Analysis 

Morgantown, West Virginia - If you are an individual struggling with debt, your options are limited. But if you are a coal company, you may be able to take advantage of a creative new strategy to shed your obligations.

Over the past decade, Peabody Energy and Arch Coal, the nation's largest coal companies, offloaded large amounts of retiree healthcare obligations to new companies that now face bankruptcy. The United Mine Workers of America (UMWA) says that the spin-offs were designed to fail in order to clean the companies' books of their retiree debts.
 

Glenn Greenwald: The 'war on terror' - by design - can never end

As the Pentagon's former top lawyer urges that the war be viewed as finite, the US moves in the opposite direction

Last month, outgoing pentagon general counsel Jeh Johnson gave a speech at the Oxford Union and said that the War on Terror must, at some point, come to an end:

"Now that efforts by the US military against al-Qaida are in their 12th year, we must also ask ourselves: How will this conflict end? . . . . 'War' must be regarded as a finite, extraordinary and unnatural state of affairs. We must not accept the current conflict, and all that it entails, as the 'new normal.' Peace must be regarded as the norm toward which the human race continually strives. . . .

"There will come a tipping point at which so many of the leaders and operatives of al-Qaida and its affiliates have been killed or captured, and the group is no longer able to attempt or launch a strategic attack against the United States, that al-Qaida will be effectively destroyed."

6 Biggest Religious Right Threats to America

By Simon Brown

January 3, 2013  |  Multiple courts have said “no” to states that want public schools to teach “intelligent design” creationism in science classes, but that doesn’t faze Montana State Rep. Clayton Fiscus (R-Billings).

Fiscus, a Tea Party favorite whose professional background is in real estate, asked the legislative services staff of the Montana House of Representatives in November to come up with a bill for the 2013 legislative session that would “require public schools to teach intelligent design along with evolution.”

Lawmakers like Fiscus often push their agenda in defiance of established constitutional law, and sometimes hope they can create a case to convince the U.S. Supreme Court to overturn previous decisions that contradict their personal beliefs. Americans Uni­ted combated a wide array of state-level leg­islative schemes in 2012 that sought to tear down the critical safeguards that keep church and state separate.
 

Rescued by a Bailout, A.I.G. May Sue Its Savior

By BEN PROTESS and MICHAEL J. DE LA MERCED

Fresh from paying back a $182 billion bailout, the American International Group has been running a nationwide advertising campaign with the tagline “Thank you America.”

Behind the scenes, the restored insurance company is weighing whether to tell the government agencies that rescued it during the financial crisis: thanks, but you cheated our shareholders.

The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation.”
 

Frank Rich: The Fiscal Cliff Was a Molehill

Every week, New York Magazine writer-at-large Frank Rich talks with assistant editor Eric Benson about the biggest stories in politics and culture. This week: the end of the "Fiscal Cliff" crisis, Howard Schulz's bipartisanship fetish, and John Roberts's latest political play.

In the first hours of the new year, the Senate overwhelmingly approved a not-so-grand bargain to arrest our fall off the "fiscal cliff." The White House is hailing the deal as a big win. Many liberals, from the Iowa Senator Tom Harkin to our own Jonathan Chait, see it as Obama yet again snatching defeat (or at least partial defeat) from the jaws of victory. What's your take?

It is discouraging that Obama would retreat on what he had previously vowed to be a nonnegotiable line in the sand — refusing to extend the Bush-era tax cuts for income over $250,000 a year. (That line moved to $400,000 for individuals, $450,000 for couples.) He ran on this inviolate stand and won. It makes you wonder if he will hold to his other ostensibly firm position — refusing to let the nation’s debt ceiling be held hostage in the coming battle over budget cuts, due in March. That said, Obama did stave off cuts to Social Security and Medicare and extended unemployment insurance for a year. But in truth, for all the news-media hysteria over the “fiscal cliff,” the cliff may prove a molehill in the view of history anyway. It’s just another skirmish in an ideological war that promises far bloodier battles ahead.
 

5 Most Terrifying Things About the Likely New CIA Head John Brennan

By Alex Kane 

January 7, 2013  |  Lost amidst the manufactured controversy over President Barack Obama’s pick of Chuck Hagel [3] as Secretary of Defense is the equally consequential pick for new director of the Central Intelligence Agency (CIA). Yesterday, President Obama tapped a man for the top CIA post who has supported the hallmarks of the permanent war on terror: wiretapping, drone strikes and torture. Pending confirmation, John Brennan, currently a top counterterrorism adviser to Obama, will be the new head of the powerful CIA. Brennan will take over from David Petraeus, who was felled by an extramarital affair.

President Obama praised Brennan in a press conference January 7, where the announcement of Brennan as CIA head was made. “For the last four years, as my Advisor for Counterterrorism and Homeland Security, John developed and has overseen our comprehensive counterterrorism strategy — a collaborative effort across the government, including intelligence and defense and homeland security, and law enforcement agencies,” said Obama [4]. “And so think about the results.  More al Qaeda leaders and commanders have been removed from the battlefield than at any time since 9/11.”

Obama’s praise for Brennan ignores the man’s dubious record. So instead, we’ll give Brennan’s history a closer look--and point out five disturbing facts you should know about Brennan’s past.

The Real Reason Republicans Hate Hagel

It has more to do with President Obama than the former senator from Nebraska.

By Fred Kaplan  |  Posted Sunday, Jan. 6, 2013, at 8:37 PM ET

It’s good news that President Obama will nominate Chuck Hagel as his secretary of defense, despite the frantic campaign against him that’s been mounted by certain Republicans.

I don’t think that he chose Hagel because of the opposition. It’s generally not Obama’s style to pick a fight for its own sake (cf. Rice, Susan). He’s an issues man, and he faces many fights on other pressing matters. If he thought that someone less controversial could do the job at the Pentagon, he’d have gone with that person in a flash (cf. Kerry, John).
 

Dean Baker: The Blame the Community Reinvestment Act Industry

One of the major occupations for economists these days is blaming efforts to help poor people for the housing bubble and bust. The main villains in this story are Fannie Mae, Freddie Mac, the Federal Housing Authority (FHA) and the Community Reinvestment Act (CRA). A reader recently sent me another work in this proud tradition.

I just did a quick reading of the paper, but it seems that the smoking gun in this one is that banks subject to the CRA appeared to do more lending in CRA tracts in the periods where their lending behavior was being scrutinized by regulators. Just to remind folks, the CRA requires banks to make loans in the areas from which they were taking deposits, in particular focusing on areas that are disproportionately African American or Hispanic. The authors take this timing result, which is especially pronounced in the peak bubble years of 2004-2006, as evidence that the CRA played a major role in the pushing of bad loans on moderate income people. As they note, the loans issued in these tracts in these periods had a much higher default rate than other loans.
 

Matt Taibbi: Secrets and Lies of the Bailout

The federal rescue of Wall Street didn’t fix the economy – it created a permanent bailout state based on a Ponzi-like confidence scheme. And the worst may be yet to come 

It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you'd think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we've been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?

Wrong.

It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.
 

Fix the Debt Empties Its Trojan Horse

January 2, 2013 · By Sarah Anderson and Scott Klinger

The corporate-driven campaign didn't get everything it wanted with the fiscal deal, but it's likely to continue to be a major force as budget talks continue.

Over the last three months, the Fix the Debt campaign, led by more than 100 big company CEOs, has unleashed a firestorm of ads, blanketing political news web sites and entirely plastering the Capitol South Metro station used by most Congressional staffers.

In late October, the Institute for Policy Studies began exposing the Fix the Debt campaign's Trojan Horse. While they presented themselves as a patriotic bipartisan group, merely seeking a “balanced” deal, their own lobby materials revealed they were out to use the fiscal cliff as an opportunity to win massive new corporate tax breaks paid for with cuts to earned benefit programs like Social Security and Medicare.

The Case Against Billionaires

Thursday, 03 January 2013 15:57  
By Thom Hartmann and Sam Sacks, The Daily Take | Op-Ed 

It’s time we as a nation have a serious discussion about outlawing billionaires.

This week we learned that 2012 was one heck of a year for the billionaires. The 100 richest people in the world got $241 billion wealthier this year bringing their total net worth to $1.9 trillion. These 100 people have more combined wealth than the entire GDP of nations like Italy, Mexico, Spain, Canada, Australia, and about 170 other nations. 

Billionaires exclusive to the United States also had a field day. As the annual Forbes 400 list of 2012 showed, America’s richest billionaires saw their wealth increase by $200 billion last year bringing their total net worth to $1.7 trillion.

Michael Hudson: America’s Deceptive 2012 Fiscal Cliff, Part III– Why Today’s Fiscal Squeeze Imposes Needless Austerity

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “The Bubble and Beyond.” 

The financial sector promises that privatizing roads and ports, water and sewer systems, bus and railroad lines (on credit, of course) is more efficient and will lower the prices charged for their services. The reality is that the new buyers put up rent-extracting tollbooths on the infrastructure being sold. Their break-even costs include the high salaries and bonuses they pay themselves, as well as interest and dividends to their creditors and backers, spending on stock buy-backs and political lobbying.

Public borrowing creates a dependency that shifts economic planning to Wall Street and other financial centers. When voters resist, it is time to replace democracy with oligarchy. “Technocratic” rule replaces that of elected officials. In Europe the IMF, ECB and EU troika insists that all debts must be paid, even at the cost of austerity, depression, unemployment, emigration and bankruptcy. This is to be done without violence where possible, but with police-state practices when grabbers find it necessary to quell popular opposition.
 

Sen. John Cornyn's Outrageous Op-Ed on the Debt Ceiling

By Matthew Yglesias | Posted Friday, Jan. 4, 2013, at 10:09 AM ET

It's no surprise that congressional Republicans want to use the looming expiration of federal borrowing authority to force spending cuts, but it's worth savoring this moment's op-ed from Sen. John Cornyn of Texas and at least pretending to be surprised by a blatant effort to pull the wool over people's eyes. After an Orwellian accusation that President Obama prefers to govern via brinksmanship, Cornyn reaches the conclusion that "it may be necessary to partially shut down the government in order to secure the long-term fiscal well being of our country, rather than plod along the path of Greece, Italy and Spain."

What he's missing here is that the path he's advocating is much worse than anything that's happened in Italy or Spain. He proposing that the federal government simply default on payment it's obligated to make.

Paul Krugman: Battles of the Budget

The centrist fantasy of a Grand Bargain on the budget never had a chance. Even if some kind of bargain had supposedly been reached, key players would soon have reneged on the deal — probably the next time a Republican occupied the White House.

For the reality is that our two major political parties are engaged in a fierce struggle over the future shape of American society. Democrats want to preserve the legacy of the New Deal and the Great Society — Social Security, Medicare and Medicaid — and add to them what every other advanced country has: a more or less universal guarantee of essential health care. Republicans want to roll all of that back, making room for drastically lower taxes on the wealthy. Yes, it’s essentially a class war. 
 

Have You Ever Wondered What Compels Your Conservative Relatives to Vote the Way They Do?

By Ryan Howes

January 3, 2013  |  By the time you’re reading this, the 2012 election will have been decided, and we’ll all have had our fill of the partisan rancor that’s become commonplace in politics. Perhaps you yourself have had the experience of getting lost in an argument in which you became exasperated that people on the other side couldn’t see what was so obvious, despite your best efforts to reason with them.

When caught in the stalemate of a political debate, the advice of Jonathan Haidt, author of The Righteous Mind: Why Good People Are Divided by Politics and Religion and a social psychologist in the New York University Stern School of Business, is to save our breath–or at least recognize that what we think we’re arguing about isn’t really what we’re arguing about. Haidt believes that most political debates, at least the way they’re usually conducted, are useless because the underlying issues aren’t what they appear to be on the surface. Politics, he says, is ultimately about our stance on fundamental moral beliefs and group loyalties–things that aren’t usually influenced by facts, figures, or rational policy debate. In the interview that follows, he offers a perspective on why we vote the way that we do that differs from what you’re likely to read about in our mainstream election-season coverage.
 

Latvia’s Economic Disaster as a Neoliberal Success Story: A Model for Europe and the US?

By Jeffrey Sommers and Michael Hudson. Michael Hudson was Professor of Economics and Director of Research at the Riga Graduate School of Law. He is a research professor of Economics at University of Missouri, Kansas City. His latest book is Finance Capitalism and Its Discontents. Jeffrey Sommers is visiting faculty at the Stockholm School of Economics in Riga. He is an Associate Professor of Political Economy & Public Policy at the University of Wisconsin – Milwaukee. The authors have advised Latvian politicians and government officials up to the Prime Minister level. Both have published extensively in the Latvian press.

A generation ago the Chicago Boys and their financial supporters applauded General Pinochet’s anti-labor Chile as a success story, thanks mainly to its transformation of their Social Security into Employee Stock Ownership Plans (ESOPs) that almost universally were looted by the employer grupos by the end of the 1970s. In the last decade, the Bush Administration, seeking a Trojan Horse to privatize Social Security in the United States, applauded Chile’s disastrous privatization of pension accounts (turning many over to US financial institutions) even as that nation’s voters rejected the Pinochetistas largely out of anger at the vast pension rip-off by high finance.

Today’s most highly celebrated anti-labor success story is Latvia. Latvia is portrayed as the country where labor did not fight back, but simply emigrated politely and quietly. No general strikes, nor destruction of private property or violence, Latvia is presented as a country where labor had the good sense to not make a fuss when faced with austerity. Latvians gave up protest and simply began voting with their backsides (emigration) as the economy shrank, wage levels were scaled down, and where tax burdens remained decidedly on the backs of labor, even though recent token efforts have been made to increase taxes on real estate. The World Bank applauds Latvia and its Baltic neighbors by placing them high on its list of “business friendly” economies, even though at times scolding their social regimes as even too harsh for the Victorian tastes of the international financial institutions.

Paul Krugman: Americans Still Waiting for Predicted Hyperinflation

Some readers may recall the Peter-Schiff-was-right campaign of 2009, a sort of public-relations blitz claiming that Mr. Schiff, an Austrian-oriented commentator, had foreseen the financial crisis. It wasn’t really true even then; still, Mr. Schiff became a fixture of right-wing television shows, constantly warning that expansionary monetary and fiscal policies were about to produce hyperinflation.

Well, Cullen Roche, who writes the Pragmatic Capitalism blog, recently caught a TV host actually putting Mr. Schiff on the spot, pointing out that he’s been predicting that hyperinflation since 2008. So where is it?

Good question.

America's Real Criminal Element: Lead

New research finds Pb is the hidden villain behind violent crime, lower IQs, and even the ADHD epidemic. And fixing the problem is a lot cheaper than doing nothing.

—By Kevin Drum

When Rudy Giuliani ran for mayor of New York City in 1993, he campaigned on a platform of bringing down crime and making the city safe again. It was a comfortable position for a former federal prosecutor with a tough-guy image, but it was more than mere posturing. Since 1960, rape rates had nearly quadrupled, murder had quintupled, and robbery had grown fourteenfold. New Yorkers felt like they lived in a city under siege.

Throughout the campaign, Giuliani embraced a theory of crime fighting called "broken windows," popularized a decade earlier by James Q. Wilson and George L. Kelling in an influential article in The Atlantic. "If a window in a building is broken and is left unrepaired," they observed, "all the rest of the windows will soon be broken." So too, tolerance of small crimes would create a vicious cycle ending with entire neighborhoods turning into war zones. But if you cracked down on small crimes, bigger crimes would drop as well.

 

Dean Baker: Leave Social Security Alone; It’s Irrelevant to the Deficit

Millions of people are rightly outraged to hear that Social Security is in the gun-sights of both Speaker Boehner and President Obama in their budget negotiations. There is no reason that our political leaders should be discussing cuts to the country’s most successful social program.

While the promotion of budget hysteria is one of the largest industries in Washington, the most important and widely ignored fact about the budget situation is that we have large deficits today because the collapse of the housing bubble sank the economy. This is not a debatable point.