Today Ezra Klein posted an interesting piece about the Euro crisis that confirms what I have thought for some time.
You may have heard the standard right-wing talking point that the current economic woes in Europe are directly tied to entitlements. Conservatives made a similar claim about the US deficit, which is why we’ve been talking about that side of the equation instead of higher taxes until recently (thank you OWS).
Both claims, of course stretch the truth — a lot.
The economic downturn (due to the subprime mortgage disaster) and tax cuts for the wealthy are the prime factors in the US deficit.
Entitlements are also not the boogeyman in the European crisis.
Klein’s piece, “A larger welfare state can mean a lower deficit” highlights the case of Germany, which has a hefty welfare state — but didn’t suffer from any of the problems faced by Greece and other Euro-zone countries:
Take Germany. They have a pretty big welfare state: pensions, health care, paid vacations, unemployment benefits equal to two-thirds of one’s income. Indeed, the Organization for Economic Cooperation and Development keeps track of social spending — unemployment, old-age pensions, health care, etc — as a percentage of GDP. In 2007, Germany spent 25.2 percent of their GDP on such things. Greece spent 21.3 percent on social policies. Yet Greece is in crisis, and Germany is fine.
As recently as 1965, the cost of those two systems competed neck-and-neck. That year, Canada spent 5.9 percent of its GDP on health care. The United States spent 5.7 percent. But around that time, Canada was transitioning to its current single-payer system. Over the next four decades, the growth of health-care costs slowed in Canada while it accelerated in the United States. By 2009, Canada was spending 11 percent of its GDP on health care — and covering everyone. The United States was spending 17.4 percent of its GDP and leaving 45 million uninsured. In dollar terms, we’re spending $3,600 more per person, per year, than Canada.
I’m not an economist, but there seems to be some consensus in the articles that I have read that what Klein states is true.
I have seen no convincing evidence that European woes are principally caused by entitlement spending.
In fact, Klein makes a good argument that a strong healthcare system could act as a bulwark against deficit:
If the United States had Canada’s health-care system, and Canada’s per capita health-care costs, we would have a much “larger” welfare state, but we wouldn’t have a deficit problem. Assuming we weren’t spending that money elsewhere, we wouldn’t even have a deficit. Likewise, if any country in the euro zone maintained the United States’s health-care system and our health-care spending, it would have a smaller welfare state, but it would be sagging beneath a debt burden far more onerous than anything anyone in Europe is facing today.
- Contrary To Republican Rhetoric, Europe Is Not In Trouble Because Of Spending And Debt (thinkprogress.org)
- The European Debt Crisis in Three Graphs (bostongazette.wordpress.com)
- A Bankrupt Uncle Sam Hypocritically Lectures Europe On Debt (forbes.com)
In a November 19 post, Reich gives the following advice to the Deficit Supercommittee (which has since disbanded, after failing to reach an agreement):
1. Make no cuts before unemployment is back under control (down to 5%).
2. Make the boost big enough. We need a huge jobs program with components like the New Deal’s Civilian Conservation Corps and Work Progress Administration to restore our infrastructure.
3. Raise taxes on the super rich and tax all income (capital gains included) at the same rate. Restore the tax structure to pre-1980 levels and put a 2% surcharge on income over $5 million.
4. Cut the real welfare — military spending and corporate subsidies. Savings = $400 billion annually.
Reich’s closing plea, of course, fell on deaf ears:
Do you hear me, Washington? Do these four things and restore jobs and prosperity. Fail to do these, and you’ll make things much, much worse.
Unfortunately, there’s not a chance any of this will get through in this political climate.
It seems like we are constantly in a battle to mitigate damage from bad policy and those actively on a misguided crusade to make things much worse, and not making any headway in actually fixing the problem.
I watched for two years the coming of the slow-motion train wreck that was Tuesday’s mid-term election.
Of course, the right is crowing that this is a repudiation of liberals and liberal ideology, which of course is wrong.
If this were true, the Blue Dogs would have sailed to reelection, and progressives would have all gone down hard. Instead, it seems progressives did better than the conservative/corporate toadies who call themselves Dems:
Of the 54 seats occupied by members of the Blue Dog coalition, 27 of them were lost to Republicans. (That includes five held by incumbents who either retired or ran for the Senate.) On the other hand, all but three of the much larger group of Progressive Caucus members up for re-election won their seats, including six out of nine caucus members whose races were rated as competitive.
If anything the elections were the result of these things:
1) The timidity of the Democrats — and their inability to put their message out (and highlight their accomplishments)
2) The shit-ton of money poured into campaigns by secretive, unaccountable front groups in the light of the Citizen’s United Supreme Court ruling. Release the Kraken, indeed.
The New York Times has the critical article on this.
“Outside Groups on the Right Flexed Muscles”
While it is hard to sort out the exact difference they made, their success rate, particularly in races in which Republican challengers would have otherwise been badly outgunned, raises the prospect that a relatively small number of deep-pocketed donors exerted an outsize influence on Tuesday’s results.
Yeah. Classic understatement.
The principle right-wing shadow organ has been the hilariously misnamed US Chamber of Commerce. I’ve written about them before, and they look to be one of the most powerful money-laundering outlets for the Bankster set.
As a side note, I find it hilarious the way right-wing nutbags snarl the name “George Soros” (who funds liberal organizations) but can’t find their voice to say anything about Richard Mellon Scaife, the Koch Brothers, front groups like the US Chamber and media vampire Rupert Murdoch.
Until a way is found to get the oversized influence of huge multinational (and in many cases, foreign) money out of the election process, this country is on the fast march to Fascism.
The unbridled celebration of corporatism is about to begin, and the faith of the true believers is unlikely to be broken by any disaster visited upon us as a result.
If these deluded hordes could be swayed by reality, the BP disaster, Mortgage catastrophe and Enron certainly would have done the trick.
The inestimable Bill Moyers recently gave a speech honoring the late progressive historian Howard Zinn. Entitled “Welcome to the Plutocracy”, it should be read by anyone who gives a shit about this country.
The elder statesman of a dead art (journalism) crafts a lesson filled with all the history needed to highlight the consequences of the regressive direction American voters just chose.
Moyers captures the moment perfectly:
Now let’s connect some dots. While knocking down nearly all limits on corporate spending in campaigns, the Supreme Court did allow for disclosure, which would at least tell us who’s buying off the government. Senate Republican Leader Mitch McConnell even claimed that “sunshine” laws would make everything okay. But after the House of Representatives passed a bill that would require that the names of all such donors be publicly disclosed, McConnell lined up every Republican in the Senate to oppose it. Hardly had the public begun to sing “Let the Sunshine In” than McConnell & Company went tone deaf. And when the chief lobbyist for the Chamber of Commerce was asked by an interviewer, “Are you guys eventually going to disclose?” the answer was a brisk: “No.” Why? Because those corporations are afraid of a public backlash. Like bank robbers pulling a heist, they prefer to hide their “personhood” behind sock masks. Surely that tells us something about the nature of what they’re doing. In the words of one of the characters in Tom Stoppard’s play Night and Day: “People do terrible things to each other, but it’s worse in places where everything is kept in the dark.”
In the short term, I am extremely interested in how the alleged principles of the Tea Party zealots breaks against the wall of corporate adulation that is the Republican party.
I’ll be crying into my popcorn as I watch.
- Texas millionaire gives $7 million to GOP group (salon.com)
- Senate Elections: Democrats Take Losses But Hold Upper Chamber (huffingtonpost.com)
- More than half the Blue Dogs are out (dailykos.com)
In the wake of the Citizen’s United ruling by the Supreme Court, unlimited amounts of cash are polluting our election campaigns and buying politicians wholesale.
Robert Reich had a nice piece on his blog Monday about the “Perfect Storm” that threatens our democracy:
He hits all the bases:
- The top one-tenth of one percent of Americans now earn as much as the bottom 120 million of us
- Hundreds of millions of dollars are pouring into campaigns with no accountability whatsoever
- a handful of front groups is laundering the money, and some have taken donations from foreign companies
- Most Americans are in a bad position (unemployment, debt, mortgages) and taxes are rising and services are being cut
- Infrastructure is crumbling
- Politicians refuse to take the most modest step of restoring taxes for top earners (who are now “burdened” with the lowest taxation in 80 years)
We’re back to the late 19th century when the lackeys of robber barons literally deposited sacks of cash on the desks of friendly legislators. The public never knew who was bribing whom.
Reich is right. And there doesn’t seem to be any hope in sight.
I have no choice but to agree with his gloomy conclusion:
The perfect storm: An unprecedented concentration of income and wealth at the top; a record amount of secret money flooding our democracy; and a public becoming increasingly angry and cynical about a government that’s raising its taxes, reducing its services, and unable to get it back to work.
We’re losing our democracy to a different system. It’s called plutocracy.
Salon.com has an article on the debate between Delaware Senate candidates Christine O’Donnell (R-Tea Partyville) and Chris Coons (D).
Details the pitifully out of her depth O’Donnell and describes a debate in which she ran down a checklist of contradictory and nonsensical right wing tropes and buzzwords (Marxist, waste, fraud, abuse, Nancy Pelosi, out of control spending) and seems not to recognize that she’s in the wrong end of the pool.
Salon writer Steve Kornacki makes an observation that scares the hell out of me:
We’d like to believe that elections are won and lost on policy, but they aren’t. So O’Donnell’s policy deficiencies didn’t lose her the debate, just as Coons’ effortless policy conversance didn’t win it for him.
As a further example, the offers the situation in the Wisconsin Senate contest in which Russ Feingold (D) is losing to the clueless Ron Johnson (R – Teabag City).
The key passage:
“A candidate like Johnson in Wisconsin can get away with that because – at least for now – he meets swing voters’ basic threshold for competence; they are strongly inclined to back Republicans this year, and he’s good enough. But for O’Donnell, the key to Wednesday night was whether anything would be said (or whether any body language would be expressed) that might grab the attention of the media and create enough noise in the next few days (or weeks) to shake swing voters from their aversion to her.”
So this is the state of the American electorate — or at least a huge segment of it.
Competence and familiarity with policy are irrelevant, and the masses clamour for candidates who think from the gut. Yay.
We tried that. Eight years, two wars, an economic collapse and a budget surplus transformed into a seemingly insurmountable deficit later, I think we can safely say that we should take a pass.
My fondest fantasy involves a reality television show and an island nation in which the Tea Party crowd could realize their wildest dreams.
Americans could watch the formation of “Galtland” and see the consequences of their policies as they play out on live television.
Each week, the producers could have citizenship quiz contests for those who want to compete for a return trip to “socialist” America.
Update: The New York Times published an editorial on October 12 that deals with the Wisconsin race.
“Uphill in Wisconsin” hits some of the same points as the Salon article, and provides further evidence that the Tea Partiers (in the words of Matt Taibbi) are full of shit:
Mr. Feingold’s independent mind, and his refusal to follow the big-money line on issues like trade, campaign finance and Wall Street reform, should have endeared him to Tea Party members and other independents who are angry at Washington conformists. If they had taken the time to listen.
The editorial is outlines the puzzling phenomenon in which Democrats, who have some accomplishments to crow about, are failing to get through the dense web of lies being woven by the united right wing media machine and candidates like Johnson.
It’s possible that within a decade my fantasy about the island above will become the nightmare reality in America.
- O’Donnell’s debate Hail Mary: He’s a Marxist! (salon.com)
If you haven’t read Matt Taibbi’s excellent article on the Tea Party in the latest Rolling Stone, you should give it a look.
He descended into the Tea Party culture like an anthropologist traveling to the far reaches of the world — making observations about a completely alien way of life and thought.
Titled “Tea and Crackers” , Taibbi pulls no punches about what he found and makes many of the same observations I have made about this faux movement:
I’ve concluded that the whole miserable narrative boils down to one stark fact: They’re full of shit. All of them. At the voter level, the Tea Party is a movement that purports to be furious about government spending — only the reality is that the vast majority of its members are former Bush supporters who yawned through two terms of record deficits and spent the past two electoral cycles frothing not about spending but about John Kerry’s medals and Barack Obama’s Sixties associations. The average Tea Partier is sincerely against government spending — with the exception of the money spent on them. In fact, their lack of embarrassment when it comes to collecting government largesse is key to understanding what this movement is all about
Taibbi outlines how the movement — what there was of one — has it’s roots in Ron Paul’s run for president, and details how it has been co-opted by the Republican establishment.
The Rolling Stone writer suggests that the Tea Partiers (those who actually care about “out of control spending” etc) are likely to be disappointed when their candidates (most of whom are perpetual candidates who have taken up the Tea Party mantle to tap into the visible energy and anger of the movement) abandon all their positions — except for tax cuts for the wealthy.
Taibbi’s opening image of a Kentucky rally with dozens of Medicare-funded personal scooters and protesters on similarly-financed oxygen is at the heart of the Tea Party base. He argues that the Tea Party base is the same old Republican base:
So how does a group of billionaire businessmen and corporations get a bunch of broke Middle American white people to lobby for lower taxes for the rich and deregulation of Wall Street? That turns out to be easy. Beneath the surface, the Tea Party is little more than a weird and disorderly mob, a federation of distinct and often competing strains of conservatism that have been unable to coalesce around a leader of their own choosing. Its rallies include not only hardcore libertarians left over from the original Ron Paul “Tea Parties,” but gun-rights advocates, fundamentalist Christians, pseudomilitia types like the Oath Keepers (a group of law- enforcement and military professionals who have vowed to disobey “unconstitutional” orders) and mainstream Republicans who have simply lost faith in their party.
Addressing the accusations of racism, Taibbi states:
It’s not like the Tea Partiers hate black people. It’s just that they’re shockingly willing to believe the appalling horseshit fantasy about how white people in the age of Obama are some kind of oppressed minority. That may not be racism, but it is incredibly, earth-shatteringly stupid.
I’m not quite so sure. I’m convinced that the Tea Partiers have a strong racist element among them. I do agree that many, if not a majority of these aging white folks holds the paranoid persecution mindset Taibbi describes.
Anyway, the article makes clear that the Tea Party folks are not people that can be reasoned with.
They are the fringe, conspiracy-minded base of the current Republican Party, and Karl Rove and friends have found a way to tap into their anger to keep their wealthy friends comfortable.
- The Tea Party Demographic (themoderatevoice.com)
- Sorry Tea Partiers, This Is No Revolution (newser.com)
- The Tea Party’s religious roots exposed | Sarah Posner (guardian.co.uk)
Apparently, Paul Krugman is continuing to be a problem for the powerful elite.
From time to time you read a snide comment or a post purporting to prove Krugman wrong. If it comes to his attention, the Nobel Prize-winng economist usually takes the argument apart like a cheap suit.
This past week, he has faced two attacks from the gatekeepers of knowledge in the media.
Most of the article is standard profile fluff, but there is undercurrent of snobbery throughout that seems to say that rich people are hypocrites when they advocate for the middle class and poor.
For example, in Kurtz’ Media Notes profile of the New York Times columnist, he writes:
Krugman would seem to have an exceedingly comfortable life. There’s the large house in Princeton, described by the New Yorker as being in “Japanese modern style,” the New York apartment and the condo on the beach in St. Croix. There are trips to international conferences, most recently in Sweden and Japan. He makes a bundle on writing textbooks with his wife. People’s heads turn in restaurants, like the one where he is lunching.
So, Kurtz seems to say, why doesn’t he just shut the F*&K up?
Like many of the media elite, floating around in the rarified air (and sipping champagne with the politicians and other power brokers they write about), Kurtz cannot fathom why someone would be upset that American is going to hell in a handbasket.
After all, he’s got plenty of money, right?
Krugman started his early columns in the New York Times at the time the Bush Administration took the reigns. As Kurtz does manage to note, the Princeton professor didn’t like the lies and sleight of hand the Bush economic team used to rig the economy for the wealthy.
He called them on it in print. A lot.
This has made Krugman a target for the elite and the right, who bluster nonsensical pronouncements about magical economic forces the defy scrutiny. They usually do this without a shred of evidence to back them up, or by distorting and misreading data.
Krugman writes in a way that takes the complexity of the worlds of finance and economics and makes them understandable to the layperson.
And so, he must be marginalized. Immediately. Mercilessly.
The second attempt this week is also the most hilarious.
As reported in Salon’s “The dumbest attack on Paul Krugman, ever”, blogger Gonzalo Lira, writing for Business Insider tried to twist the Times’ columnist’s word to make it seem that he was advocating starting a war to improve the economy.
Dumb, dumb, dumb:
It’s Krugman’s disturbing, nihilist inference, which he makes over and over, tucked away in his articles, but always there, like a nasty aftertaste of a drink laced with a roofie: So maybe another total war might not be such a bad idea now, so as to get us out of this new Global Depression.
That is what I object to in Paul Krugman: He seems to be offering up another war as the only way to fix the economy.
Of course, Krugman never said or suggested any such thing.
Lira tries to state that Krugman’s reference to World War II’s role in helping bring the U.S. out of a depression (a little-debated fact among economists) as advocacy for starting another war.
Bullshit was called on Mr. Lira by large segments of the blogosphere, and Business Insider yanked the piece with a weak mea culpa:
The post that previously appeared at this URL by the writer Gonzalo Lira makes some claims about Paul Krugman’s stance on war being necessary for the economy that we feel distort Krugman’s actual stance.
It’s clear that certain factions are scrambling to find something to nail Krugman with, with little success.
It’s a good indication that what he is saying is making certain people uncomfortable.
You should read him.
So, the Republicans haven’t learned a thing since their “Contract With America” was revealed for the utter fraud that it was.
Their new “Pledge To America” is rife with distortions and what FactCheck.org politely refers to as “dubious claims”:
The report starts with a damning summary that takes “The Pledge” apart — revealing it for the cheap publicity stunt that it is.
- It declares that “the only parts of the economy expanding are government and our national debt.” Not true. So far this year government employment has declined slightly, while private sector employment has increased by 763,000 jobs.
- It says that “jobless claims continue to soar,” when in fact they are down eight percent from their worst levels.
- It repeats a bogus assertion that the Internal Revenue Service may need to expand by 16,500 positions, an inflated estimate based on false assumptions and guesswork.
- It claims the stimulus bill is costing $1 trillion, considerably more than the $814 billion, 10-year price tag currently estimated by nonpartisan congressional budget experts.
- It says Obama’s tax proposals would raise taxes on “roughly half the small business income in America,” an exaggeration. Much of the income the GOP is counting actually comes from big businesses making over $50 million a year.
On healthcare, the stimulus bill, the economy, taxes and small business, the GOP pledge presents a fiction.
What is important to remember is this tidbit:
Fact: It’s true that the economy lost nearly 8.4 million jobs from the peak of employment in December, 2007 to the bottom of the job slump in December of last year. More than half (4.4 million) were lost before Obama took office. The economy has regained 723,000 jobs since hitting bottom, according to data from the Bureau of Labor Statistics.
So, the economy is turning around after being driven into the ground during the last administration.
Look at the record. That’s what things like this “pledge” purport to do. As as you can see, the Republicans have to make things up and want don’t want accountability for what they did.
Don’t let them get away with it.
- Campaign Finance
- Civil Rights
- Fox News
- Health Care
- Health Care Reform
- Media Criticism
- Presidential Campaign
- Tax Debate
- Tea Party
- Wall Street