Super Committee Out Of The Way -- Now Back To Reality?

By Dave Johnson, cross-posted from Campaign for America's Future

Let's hope that the failure of the "super committee" quest to take money out of the economy clears the media mist for a minute, so people can focus on real issues that matter to real people. What are the chances of that? Will our government now focus on creating jobs, reducing inequality, fighting climate change, providing health care, increasing justice, balancing trade, increasing education, enabling small business to compete against the multinational?

Real Issues

People are in the streets across the country, demanding that the government start addressing real issues that matter to real people. But the increasingly irrelevant Congress has instead focused on things like blocking the government from making school lunches more nutritious.

Create Jobs

We have millions of people out of work. And we have millions of jobs that we have been putting off getting done.

And, guess what, as of today we can get the money to hire those millions of people to do those millions of need-to-get-done jobs for the lowest cost in history. That's right, the US government can borrow money at the lowest rates ever. Marketwatch: U.S. sells 5-year debt at record-low yield,

The Treasury Department sold $35 billion in 5-year notes on Tuesday at a yield of 0.937%, the lowest level on record and below where traders expected the sale to come.

That just puts the lie to any claim that the world is concerned about our deficits, and that we "don't have the money" to spend on maintaining and modernizing our infrastructure. "The markets" are so confident in the US that they are offering to lend money at the lowest rate ever.

Climate

Maybe it isn't in the news like it was, but the problem of global warming and resulting climate change is just getting worse and worse, and may be reaching the "tipping point." AP: Greenhouse gases soar; no signs warming is slowed,

Heat-trapping greenhouse gases in the atmosphere are building up so high, so fast, that some scientists now think the world can no longer limit global warming to the level world leaders have agreed upon as safe.
New figures from the U.N. weather agency Monday showed that the three biggest greenhouse gases not only reached record levels last year but were increasing at an ever-faster rate, despite efforts by many countries to reduce emissions.

Did you get that? It turns out that the worst-case scenarios we heard about, back when we were hearing about it, were not as bad as what it turns out is really happening. The operative words here: really happening.

That is reality. So where is the government? Where is the media?

Captured

Why can't we get anything done for the people of the country anymore? Because our Congress and government is almost completely "captured." Watch this segment of 60 Minutes, in which convicted Congress-briber Jack Abramoff explains how it's done, Jack Abramoff: The lobbyist's playbook - 60 Minutes - CBS News

You let a Congressional staffer, or agency regulator, or even a member of Congress know that there is a "job" waiting for them later, and you get what you want.

Regular people don't have this kind of money to dangle in front of government and elected officials. It isn't just campaign contributions, it's lucrative jobs after you leave government, that is corrupting our system. It is corporate money, being used to enrich the 1% at the expense of the rest of us. The solution is not just to ban corporate money from our politics, it is to ban the use of corporate money for any purpose other than running the corporation. Otherwise it will just leak out and be used to corrupt the system -- and us.

I'm sounding like a broken record.

Super Committee Headlines You'll Never See

By Richard (RJ) Eskow, cross-posted from Campaign for America's Future

Discussion of the "Super Committee" debacle continues to misguide and misinform the public in an all-too-familiar way. Once again the consensus in the media and among political leaders reflects the misperceptions of an insular Washington culture, rather than the economic or political realities of most Americans.

The Republican and Democratic co-chairs said today that "we end this process united in our belief that the nation's fiscal crisis must be addressed." That's how this exercise in misplaced priorities ends: With a "bipartisan" statement about the urgency of our "fiscal crisis" - deficits - rather than our massive and much more immediate economic crisis of jobs and stagnating wages. And with that, the media onslaught begins. Now we'll see hundreds of new headlines screaming that the Committee "failed."

What we won't see are headlines explaining what really happened: That this failure was inevitable; that it reflects the wishes of most people, Republicans as well as Democrats; that Occupy Wall Street played a large part in the outcome; that Republicans never intended to compromise and Democrats shot themselves in the foot; that this "failure" will be good for most businesses - and for the rest of us too; or that a misguided and right-leaning consensus turned leaders of both parties into cheerleaders for ill-timed budget cuts even as the economy continued to burn down all around them.

Here are seven more accurate - and more eye-catching - headlines you won't see in your major media outlets.

OCCUPY MOVEMENT WINS MAJOR VICTORY
Unpopular 'Supercommittee' Deal Stymied by Popular Opinion
 
Democrats tried. They really tried. They were ready to accept deal points that the polls - and their hearts - should have forced them to refuse: Benefit cuts to Social Security and Medicare. A permanent extension of the Bush tax cuts for the wealthy. A deal that was heavily weighted toward spending cuts, rather than revenues, even during an economic crisis.

They might very well have done it, too, except for one thing: The Occupy movement has changed the subject from the Washington-driven theme of deficits to the economic hardships faced by most people in this country. Sure, the Tea Party is getting credit (yes, I said "credit") for killing a disastrous deal, and it's true that it played an important role.

But so did the Occupy movement. There was talk of occupying Congress, and even occupying the "Super" meeting's meeting space in the now-infamous Room 200. A march and rally is scheduled for tomorrow, and an Occupy group walking from Wall Street to Washington is scheduled to arrive the day after tomorrow.

Democrats who signed on to this deal were going to feel the wrath of the 99%, and there's no way they couldn't have known it. People who have spent the last two years wishing that they had a Tea Party of their own, one that would pressure Dems the way the Tea Party pressures Republicans, can now rest easy. It's here. And it's changing things.

The moral for Democrats? Embrace jobs and growth, not cuts and austerity. You'll thank yourself next November. Some Republicans will probably thank you, too ...

Stopping The Austerity Train Wreck

Robert Reich explains on his website with his usual clarity how "Washington is on another planet" and that whether or not the Super Committee reaches an agreement or not, "Washington is on the road to making budget cuts that will slow the economy, increase unemployment, and impose additional hardship on millions of Americans."

 
 He lists four "super principles" that ought to guide the Super Committee:

FIRST: no cuts before jobs are back – until unemployment is down to 5 percent. Until then, the economy needs a boost, not a cut. Consumers – whose spending is 70 percent of the economy – don’t have the money to boost the economy on their own. Their pay is dropping and they’re losing jobs.

SECOND: Make the boost big enough. 14 million Americans are out of work, and 10 million are working part time who need full-time jobs. The President’s proposed jobs program is a start but it’s tiny relative to what needs to be done. It would create fewer than 2 million jobs. We need a big jobs program – rebuilding America’s crumbling infrastructure, and including a WPA and Civilian Conservation Corps.

THIRD: To pay for this, raise taxes on the super-rich. It’s only fair. Never before has so much income and wealth been concentrated at the very top, and taxes on the top so low. Go back to the 70 percent marginal tax we had before 1980. And include more tax brackets at the top. It doesn’t make sense that any income over $375,000 is taxed at the same 35 percent, even if it’s a billion dollars. And tax all sources of income at the same rate, including capital gains.

FOURTH: Cut the budget where the real bloat is. Military spending and corporate welfare. End weapons systems that don’t work and stop wars we shouldn’t be fighting to begin with, and we save over $300 billion a year. Cut corporate welfare – subsidies and special tax breaks going to big agribusiness, big oil, big pharma, and big insurance – and we save another $100 billion. 

 Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Aftershock.

Where's The Middle?

Dead Armadillo

As the right keeps moving right, the mainstream media keeps trying to find the center.  The rules of the game require that we have two opposing camps with reasonable solutions to be found in the middle.  All we need is a little bipartisanship and compromise and everything will be alright.

This means blaming "Congress" as a whole, ignoring that one side is too willing to compromise and the other refuses to budge.  It has led pundits like Thomas Friedman to chastise President Obama for not seeking policies he has clearly sought, and tiresome pleas for a Third Party, which advocates for exactly what Obama and centrist Democrats are hoping to achieve.

Greg Sargent puts it this way:

Self-styled “centrist” columnists have a perennial problem on their hands. They have built reputations by calling for middle-of-the-road solutions to our problems. Yet they can’t acknowledge that Obama and Democrats are the ones who are offering solutions that are genuinely centrist, because that would constitute “taking sides.” This would imperil their “brand,” which rests heavily on transcending partisanship, and on their ongoing insistence that the future depends on following a middle ground between the parties.

 Today, Paul Krugman writes that the Republicans will not pay any political price for its intransigence when the Super Committee fails because the news media won't point out that only one side refused to compromise.  In a not-so-veiled swipe at Friedman, Krugman makes the point perfectly:

Oh, and let me give a special shout-out to “centrist” pundits who won’t admit that President Obama has already given them what they want. The dialogue seems to go like this. Pundit: “Why won’t the president come out for a mix of spending cuts and tax hikes?” Mr. Obama: “I support a mix of spending cuts and tax hikes.” Pundit: “Why won’t the president come out for a mix of spending cuts and tax hikes?”
You see, admitting that one side is willing to make concessions, while the other isn’t, would tarnish one’s centrist credentials. And the result is that the G.O.P. pays no price for refusing to give an inch.

Occupy Needs To Just Say No To The Super Committee

by Fuzzyone

I have been thinking a lot about the Occupy Movement and its potential to move the larger political debate lately, but I have been having a difficult time crystallizing those thoughts into a form coherent enough to write down (and whether I have managed to do so here is an open question).  A couple of recent posts here at Fair and Unbalanced have helped me out.  First, there was the excellent testimony of Robert Borosage at the Congressional Progressive Caucus's hearing on jobs.  He lays out the problems we face, why the ideas coming out of the Super Committee are bad, and what we need to do.  His main proposal is the passage of the People's Budget, something I have talked about before (but which, lets face it, is not going to happen).  Then there was this morning's post by lovechilde on the Occupy Movement at two months.

I think that the problems that lovechilde talks about are very real.  I live in Oakland and have been involved in and listening to conversations about the Occupy Movement since it began, and particularly since the first, violent eviction of the occupiers in Oakland.  Some of those conversations have been with people who are sympathetic to the movement but put off by the tactics, not only the violence of the very small number of idiots but also the negative impact on small business and the cost to a city that is already in a dire financial situation.  One of the things I found particularly interesting was the different take that the members of two local list-serves have on the movement.  One, a neighborhood list which is mostly focused on crime prevention and neighborhood watch in one of the more affluent neighborhoods in Oakland, mostly anti-Occupy.  The posts ranged from sympathy for ends but dislike of means to full on Fox crazy talk of, I kid you not, Bolshevik revolution.  The other is an Oakland Public School Parents list where there is almost universal approval of the movement (with a few concerns expressed about tactics) especially because of its support for those fighting the proposed closure of five Oakland Elementary Schools. 

One of the things that I found most troubling, and that I think emphasizes the challenges the movement faces and that lovechilde discussed, is that even those who were sufficiently well informed to know that the violence comes from a very small minority, and that the majority had attempted to stop it, were still dismissive of the movement in large part because of that.  Another significant source of opposition was the perceived (though there is disagreement about that even among business owners) harm that the movement was doing to small business in a city that is desperate to increase business and investment.

As lovechilde said the Occupy Movement will need to evolve if it is going to continue to have broad appeal and an effect on what happens in this country.  The fact that this is on the mainstream media radar is, I think, a good sign and I think that Occupy can and will continue to be a force.  The problem is that we are quickly running out of time.  The Super Committee deadline is fast approaching and there is every sign that democrats are preparing to surrender once again.  I assume that anyone who has been awake for the Obama Presidency needs no explanation of why that is entirely likely, but if you do you can look here or here.

The Super Committee Must Fail

Donkey Hotey

Robert Borosage has long been a leading voice for progressive politics in the United States. He is the founder and president of the Institute for America’s Future and co-director of its sister organization, the Campaign for America’s Future, vital organizations which develop policies, message and issue campaigns to help forge an enduring majority for progressive change.  The following is prepared testimony from Borosage delivered today to the Congressional Progressive Caucus's Hearing on Jobs, cross-posted from Campaign for America's Future.

I thank the Congressional Progressive Caucus for holding this hearing. I am honored by the invitation to participate. I want to the salute the CPC, and its co-chairs Rep. Keith Ellison and Rep. Raul Grijalva, for being a voice of reason in a Congress and a Capitol that has lost its way. Your leadership – from the People’s Budget, to this summer remarkable Jobs Tour, to the “Rebuild the American Dream” Jobs Framework that you have championed – has provided Americans with a clear way out of the mess that we are in. And now, as we head towards what is a foolish debate about the potential recommendations of the Super Committee, that misbegotten offspring of the calamitous debt ceiling deal this summer, your leadership and your voice are more important than ever.

Today, I want to speak candidly about the situation this nation faces. Tomorrow, tens of thousands of Americans across this country will demonstrate to demand jobs, not cuts, from the Congress. They demand action on jobs, and opposition to cuts in Social Security, Medicare, Medicaid and services vital to Americans. These demonstrators represent the 99%. As poll after poll has shown, they give voice to the priorities of the vast majorities of Americans. Authorities can remove Occupy Wall Street from Liberty Park, but they cannot silence an idea whose time has come. And this Congress should take heed.

Let me lay out the case clearly and make three points. 1. For this nation to succeed, the Super Committee must fail. 2. It is time to put people to work. 3. Shared Sacrifice is for suckers.

Super Collusion: Will Obama and The Democrats Betray The Middle Class, Seniors And The Poor?

By Richard (RJ) Eskow, cross-posted from Campaign for America's Future

Two new reports suggest that the President and Congressional Democrats are about to betray everything Democrats once stood for. Under pressure from Barack Obama, Democrats on the "Super Committee" have sketched out an appalling "compromise" proposal that would almost certainly doom both their 2012 electoral chances and his own.

They'd have it coming. Their draft plan literally takes crutches away from poor people to protect tax breaks for the wealthy.

Unfortunately, middle class and impoverished Americans would suffer much more than they would. Career politicians can always look forward to comfortable sinecures from the wealthy interests who will benefit from their proposal. But the rest of us would once again be punished for the excesses of the rich, then left to the untender mercies of our new Republican leaders.

That, and not the fate of a President or a party, would be the real tragedy.

Pain Threshold

The President's actively pressuring Super Committee members from both parties to come up with a budget-slashing deal, according to a report in today's Washington Post. In addition, Obama is also urging them not to cancel the automatic $1.2 trillion in cuts that would be triggered under current law if they fail to make an agreement.

Another story, from the Huffington Post's Sam Stein, gave details on the Democrats' latest proposed "compromise." These two stories paint the picture of a President and a party who are willing to keep taxes low for the wealthy, and who would pay for it by proposing cuts that punish seniors, doctors and the poor.

Why? So they can say they "successfully governed" with extremist Republicans? To please international markets that, in reality, couldn't care less? So the President can campaign as "above left and right," as if differences in principle are a bad thing? Because they've been spiritually suffocated by the cultural norms of Washington's insular culture?

There are more questions than answers. Here's one more: With Democrats like this, who needs Republicans?

Trigger Happy: Why Deficit Cuts Should Only Happen When Unemployment Reaches 5 Percent

By Robert Reich, cross-posted from his website

On planet Washington, where reducing the federal budget deficit continues to be more important than creating jobs, everyone is talking about “triggers” that automatically go into effect if certain other things don’t happen.

Yet no one is talking about the most obvious trigger of all — no budget cuts until the official level of unemployment falls to 5 percent, its level before the Great Recession.

The biggest trigger on the minds of Washington insiders is $1.2 trillion across-the-board cuts that will automatically occur if Congress’s supercommittee doesn’t come up with at least $1.2 trillion of cuts on its own that Congress agrees to by December 23.

That automatic trigger seems likelier by the day because at this point the odds of an agreement are roughly zero.

Here’s the truly insane thing: The triggered cuts start in 2013, a little over a year from now.

Yet no one in their right mind believes unemployment will be lower than 8 percent by then.

The cuts will come on top of the expiration of extended unemployment benefits, the end of a payroll tax cut, and continuing reductions in state and local budgets — all when American consumers (whose spending is 70 percent of the economy) will still be reeling from declining jobs and wages and plunging home prices. Even if Europe’s debt crisis doesn’t by then threaten a global financial meltdown, this rush toward austerity couldn’t come at a worse time.

In other words, what will really be triggered is a deeper recession and higher unemployment.

A Super Committee "Failure" Wouldn't Hurt The Economy; But A "Success" Sure Would

By Richard (RJ) Eskow, cross-posted from Campaign for America's Future

An alarmist editorial in today's New York Times urges the Super Committee to reach a deal before their rapidly approaching deadline.  The Times warns that "walking away at this point would be an embarrassment for Congress and a far-reaching blow to Washington’s financial credibility."  As for the first concern, can Congress really be further shamed or embarrassed at this point?  And does it matter?  As for whether the Super Committee's failure would be financially damaging to the country, RJ Eskow writes below that reaching an agreement would be worse.  -- Lovechilde

DonkeyHotey

Some Democrats have come under a lot of criticism lately, much of it deserved, for abandoning popular and important programs that were historically associated with their party. But some of the other Democrats - the ones who are trying to act in the country's best interests - are genuinely concerned about what will happen to the economy if the Super Committee fails to come up with a plan.

This message is for them - and anyone else who has the same concern. You need to know that the evidence is clear: A Super Committee failure won't hurt the economy at all.
But its "success" almost certainly would.

Economic Y2K

Every month it seems as if there's another "bipartisan" process designed to impose austerity on the American people. And every month we're told there will be terrible consequences in the world's markets if it doesn't succeed. These predictions are the economic equivalent of "Y2K" - always apocalyptic, never true, and all too frequently believed.

Democratic officials and staffers are being bombarded by these predictions, delivered by think-tank operatives from their own party who have been steeped in the cult of austerity. It doesn't matter how many times they're refuted by impeccably constructed papers, or by the observations of Nobel Prize winners. And it doesn't matter how many times these predictions are proven wrong.

Some of the experts warning of doom if the "Super Committee" fails said the same thing about last year's Deficit Commission, too. What happened when that "bipartisan" body deadlocked, and the private plan put forward by its co-chairs went nowhere?

Nothing.

Now the same players are telling us the stock market will plummet without a Super Committee plan. They're saying there will be more downgrades of the US government by credit rating "agencies," and that this will bring disastrous consequences. And they're saying that international markets will lose confidence in Treasury bonds.

But recent history teaches us that the exact opposite is likely to happen.

Will We, The People Have A Say On The Supercommittee's Austerity Plan?

By Dave Johnson, cross-posted from Campaign for America's Future

by DonkeyHotey

Congress' "supercommittee" of the 1% is preparing an austerity plan for the 99%. Will We, the People be allowed to vote on this plan, or, like Greece, will the elites just tell us how it is going to be? Our deficits were caused by tax cuts for the rich and huge increases in military spending. But instead of addressing these causes the elite supercommittee is said to be preparing to take money out of the economy by cutting the things We, the People do for each other. That's right, at the very time when 99% of us need more we will get less so that the 1% can enjoy record-low tax rates -- and it looks like We, the People will have no say in it.

Last week Greek Prime Minister George Papandreou proposed a referendum on the austerity plan that European governments are preparing for the country. "The markets" -- another name for the 1% -- went berserk in reaction. Pressure was applied, and now the Greek people will not be allowed to vote on their austerity plan after all, they will just be told. Richard Eskow writes about this elite veto power over democracy, in Vetoing Democracy: In Athens or Washington, Elites Still Call the Shots,

And what was most striking was the assumption the elite - the 1%, if you will - have veto power over the democratic process. In most of the commentary that flowed from the powerful and the press, a surprising number of world leader didn't even acknowledge that Greece had the right to its own democratic decision-making process.
South Korean President Lee Myung-bak, whose nation will benefit from "bipartisan" U.S. actions to create a free trade agreement between the two countries, said that "The world has plunged into fears again because of the Greek prime minister's radical step to hold a referendum." Closer to home, French President Sarkozy said that "the Greek's gesture is irrational and, from their point of view, dangerous."
The first part of that statement is a slur against democracy. The second part is, of course, a threat.

Here we are a year after our first post-Citizens United election, in which corporations were allowed to use money to directly influence our elections (as compared to indirectly influencing elections by funding the conservative movement and their organizations, think tanks, media, operatives, propaganda machine, smear machine, etc.). Here we are with the results, a year with no jobs plan from the corporate-elected House majority and a year of filibusters of jobs plans by the corporate-elected Senate Republicans. Here we are with people in the streets, like in Greece, being met with police force, like in Egypt. Meanwhile our Congress pretends it can just ignore the will of We, the People. Mubarak tried that - didn't end so well for him.

So, will We, the People be allowed to have a say over this austerity plan, or will it be like Greece all over again, told by the 1% how it's gonna be?

Or, maybe, Egypt?

Washington Pre-Occupied

By Robert Reich, cross-posted from his website

The biggest question in America these days is how to revive the economy.

The biggest question among activists now occupying Wall Street and dozens of other cities is how to strike back against the nation’s almost unprecedented concentration of income, wealth, and political power in the top 1 percent.

The two questions are related. With so much income and wealth concentrated at the top, the vast middle class no longer has the purchasing power to buy what the economy is capable of producing. (People could pretend otherwise as long as they could treat their homes as ATMs, but those days are now gone.) The result is prolonged stagnation and high unemployment as far as the eye can see.

Until we reverse the trend toward inequality, the economy can’t be revived.

But the biggest question in our nation’s capital right now has nothing to do with any of this. It’s whether Congress’s so-called “Supercommittee” – six Democrats and six Republicans charged with coming up with $1.2 trillion in budget savings — will reach agreement in time for the Congressional Budget Office to score its proposal, which must then be approved by Congress before Christmas recess in order to avoid an automatic $1.5 trillion in budget savings requiring major across-the-board cuts starting in 2013.

Have your eyes already glazed over?

Diffident Democrats on the Supercommittee have already signaled a willingness to cut Medicare, Social Security, and much else that Americans depend on. The deal is being held up by Regressive Republicans who won’t raise taxes on the rich – not even a tiny bit.

President Obama, meanwhile, is out on the stump trying to sell his “jobs bill” – which would, by the White House’s own estimate, create fewer than 2 million jobs. Yet 14 million people are out of work, and another 10 million are working part-time who’d rather have full-time jobs.

Republicans have already voted down his jobs bill anyway.

The disconnect between Washington and the rest of the nation hasn’t been this wide since the late 1960s.

The two worlds are on a collision course: Americans who are losing their jobs or their pay and can’t pay their bills are growing increasingly desperate. Washington insiders, deficit hawks, regressive Republicans, diffident Democrats, well-coiffed lobbyists, and the lobbyists’ wealthy patrons on Wall Street and in corporate suites haven’t a clue or couldn’t care less.

I can’t tell you when the collision will occur but I’d guess 2012.

Look elsewhere around the world and you see a similar collision unfolding. The details differ but the larger forces are similar. You see it in Spain, Greece, and Italy, whose citizens are being squeezed by bankers insisting on austerity. You see it in Chile and Israel, whose young people are in revolt. In the Middle East, whose “Arab spring” is becoming a complex Arab fall and winter. Even in China, whose young and hourly workers are demanding more – and whose surge toward inequality in recent years has been as breathtaking as is its surge toward modern capitalism.

Will 2012 go down in history like other years that shook the foundations of the world’s political economy – 1968 and 1989?

I spent part of yesterday in Oakland, California. The Occupier movement is still in its infancy in the United States, but it cannot be stopped. Here, as elsewhere, people are outraged at what feels like a rigged game – an economy that won’t respond, a democracy that won’t listen, and a financial sector that holds all the cards.

Here, as elsewhere, the people are rising.

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Aftershock.

Austerity Class Warfare

We all know that during high unemployment and a stagnant economy, what is needed is a boost from the federal government -- or what one might call "stimulus."  (As John Maynard Keynes explained 75 years ago, and Robert Reich continues to instruct us today, when consumers and businesses can’t boost the economy on their own, the responsibility must fall to the government.)  But instead, the focus over the last two years has been on the need for less federal spending and the overarching concern has been to reduce the long-term deficit.  Only recently, thanks to Occupy Wall Street and the President's belated "pivot" to jobs has the conversation begun to change.  But this still leaves the question why the deficit fetishists remain so prominent  -- why failed policies of the past that involve tax cuts for the rich, reduced federal spending and more federal regulation continue to remain so influential -- and not just in Republican circles.

Ari Berman, in a great new piece in The Nation, describes this as "a central paradox" in American politics:

How, in the midst of a massive unemployment crisis—when it’s painfully obvious that not enough jobs are being created and the public overwhelmingly wants policy-makers to focus on creating them—did the deficit emerge as the most pressing issue in the country? And why, when the global evidence clearly indicates that austerity measures will raise unemployment and hinder, not accelerate, growth, do advocates of austerity retain such distinction today?

Berman provides the answer:

An explanation can be found in the prominence of an influential and aggressive austerity class—an allegedly centrist coalition of politicians, wonks and pundits who are considered indisputably wise custodians of US economic policy. These “very serious people,” as New York Times columnist Paul Krugman wryly dubs them, have achieved what University of California, Berkeley, economist Brad DeLong calls “intellectual hegemony over the course of the debate in Washington, from 2009 until today.”

Its members include Wall Street titans like Pete Peterson and Robert Rubin; deficit-hawk groups like the CRFB, the Concord Coalition, the Hamilton Project, the Committee for Economic Development, Third Way and the Bipartisan Policy Center; budget wonks like Peter Orszag, Alice Rivlin, David Walker and Douglas Holtz-Eakin; red state Democrats in Congress like Mark Warner and Kent Conrad, the bipartisan “Gang of Six” and what’s left of the Blue Dog Coalition; influential pundits like Tom Friedman and David Brooks of the New York Times, Niall Ferguson and the Washington Post editorial page; and a parade of blue ribbon commissions, most notably Bowles-Simpson, whose members formed the all-star team of the austerity class.

This "austerity class" is a relentless presence in Washington and in the mainstream media.  Its various strands "form a reinforcing web that is difficult to break. Its think tanks and wonks produce a relentless stream of disturbing statistics warning of skyrocketing debt and looming bankruptcy, which in turn is trumpeted by politicians and the press and internalized by the public."  The result is what Greg Sargent calls "a Beltway Deficit Feedback Loop, wherein the hypothetical possibility of a US debt crisis somewhere in the future takes precedence over the very real jobs crisis now."

In addition, much to our misfortune, this group is profoundly influential over the current Administration:

The Moral Question On Taxes And Budget Cuts

By Robert Reich, cross-posted from his website

We dodged another shut-down bullet, but only until November 18. That’s when the next temporary bill to keep the government going runs out. House Republicans want more budget cuts as their price for another stopgap spending bill.

Among other items, Republicans are demanding major cuts in a nutrition program for low-income women and children. The appropriation bill the House passed June 16 would deny benefits to more than 700,000 eligible low-income women and young children next year.

What kind of country are we living in?

More than one in three families with young children is now living in poverty (37 percent, to be exact) according to a recent analysis of Census data by Northeastern University’s Center for Labor Market Studies. That’s the highest percent on record. The Agriculture Department says nearly one in four young children (23.6) lives in a family that had difficulty affording sufficient food at some point last year.

We’re in the worst economy since the Great Depression – with lower-income families and kids are bearing the worst of it – and what are Republicans doing? Cutting programs Americans desperately need to get through it.

Conservatives Say It Out Loud: They Hate Democracy

By Dave Johnson, cross-posted from Campaign for America's Future

The roots of today's toxic conservative movement lie in Ayn Rand's teaching that wealthy "producers -- now called "job creators" -- should be left alone by the government, namely the rest of us. The rest of us are "freeloaders," "moochers," "leeches" and "parasites" who feed off these producers and who shouldn't be allowed to make decisions to collect taxes from them or regulate them or interfere in most other ways. The Randians hate democracy, and say so, declaring that "collectivism" sacrifices individual rights to majority wishes. (See Concern Over Republican Embrace Of The Ayn Rand Poison.)

For decades these selfish, childish, "you can't make me" beliefs stayed largely below the radar, because conservatives understood that voicing them in public risked alienating ... well, anyone with any sense at all. But for various reasons sense has departed the country and conservatives are finally saying it out loud, for everyone to hear: they hate democracy. They want to limit the country's decision-making and the rewards of our society and economy to those they feel "deserve" to be on top, namely the "producers" and "job-creators."

'Super Committee' Of Doom: Who'll Protect Us?

By Richard (RJ) Eskow, cross-posted from Huffington Post

An unelected and unrepresentative group they call the 'Super Committee' has been given extraordinary power over our own economic destiny. Think of it as a political Justice League of America, except that its mission is to rescue Treasury bonds, not people.
Problem is, the bonds don't need to be rescued. People do.

Donner party of twelve, your table is ready!

The twelve people on the Committee, six Republicans and six Democrats, come half from the Senate and half from the House. Their assignment is to find $1.5 trillion in additional deficit reductions, dollars that can only be found by collecting more taxes or by cutting more spending. The last deal, negotiated primarily by the White House and the Republicans, consisted entirely of spending cuts.

This twelve-person junta need to come up with roughly $1.5 trillion more in deficit reduction. The Republicans have already sworn not to raise taxes on the wealthy. The Democrats say they want to to be "balanced" and they're eager make a deal.

We've seen this movie before. We don't like the ending.

Beware The Super Gang Of Twelve

I've written before about the dubious practice of forming bipartisan Congressional committees.  (See, e.g., Gangsters.)   It invariably results in a center-right compromise that is presented as the consensus view while shutting out liberal and progressive solutions.  That is why we should be very concerned about the makeup of the new 12-member "super committee" empowered to identify more deficit reduction measures.  As a statement from Campaign for America's Future put it, we should demand that the Democratic half of the committee consist of "six strong defenders of key programs, and advocates of tax fairness and job creation."  Democratic leaders "must insist that any agreement seeking to reduce the deficit include revenues equal to any all spending cuts proposed" and "ensure that the structure and benefits of our nation’s safety net are preserved." 

Why Democrats Lose:  The Super Committee Appointees

By Robert L. Borosage, cross-posted from Campaign for America's Future, August 2, 2011.

The debt ceiling agreement passed by Congress today sets up a 12-person "super committee" with extraordinary powers and the mandate to locate $1.5 trillion in spending cuts and/or increased revenues for expedited vote by December. The Republican and Democratic leaders in the House and Senate will each appoint three people to the commission.

Since the Commission’s mandate is to target Social Security, Medicare and other entitlements as well as tax revenues, who gets appointed to the gang of 12 will be critical. The president says he will push for a “balanced plan,” but he gets no appointments.

If you care about Social Security or Medicare or Medicaid, be very worried.

The Debt Ceiling Debacle

By Robert L. Borosage, cross-posted from Huffington Post.

Things fall apart; the centre cannot hold;
....
The best lack all conviction, while the worst
Are full of passionate intensity.
-William Butler Yeats, The Second Coming

"It is clear we must enter an era of austerity; to reduce the deficit through shared sacrifice," reads the statement issued by House Minority Leader Nancy Pelosi, as she endorsed Democratic Senate Leader Harry Reid's plan to cut $2.7 trillion in spending over 10 years with no call for the wealthy to pay anything in taxes.

It has come to this. The proud liberal leader of House Democrats, excluded from many of the debt ceiling negotiations because she insisted on defending Social Security and Medicare, has now capitulated to the austerity caucus. And the Republicans still refuse to take yes for an answer.

For all the president's talk about shared sacrifice and the wealthy paying a bit more by closing loopholes, the two choices before the Congress now are all about spending cuts without revenue increases. Republican Speaker Boehner's plan would raise the debt limit to cover debts for six months in exchange for $1.2 trillion in spending cuts, followed by an election year debate over the same debt limit in exchange for cuts of $1.8 trillion coming largely from Social Security, Medicare and Medicaid over the next 10 years. In his plan, benefits of current retirees would necessarily face harsh cuts. 

The alternative, put forward by Senate Majority Leader Harry Reid, endorsed by the president and Pelosi, calls for stunning cuts in discretionary spending over $2.7 trillion over 10 years, excluding entitlements and any new revenues. These would come partly from winding down two wars and cutting defense, but would require deep cuts in domestic programs in everything ranging from schools to the environment to mass transit and food safety.

Both plans would set up a super committee -- a gang of 12 -- with special powers for expedited votes on a proposal to cut entitlement and, in Reid's case, consider closing loopholes if not raising taxes.

The irresponsible decision of the Tea Party Republican right to hold the economy hostage over the raising the debt ceiling has paid off big time. And Americans will pay the price.

It is worth recalling just how extensive the Democratic retreat has been.

The Truth About The American Economy

By Robert Reich, originally published on his website, May 30, 2011.

The U.S. economy continues to stagnate. It’s growing at the rate of 1.8 percent, which is barely growing at all. Consumer spending is down. Home prices are down. Jobs and wages are going nowhere.
It’s vital that we understand the truth about the American economy.

How did we go from the Great Depression to 30 years of Great Prosperity? And from there, to 30 years of stagnant incomes and widening inequality, culminating in the Great Recession? And from the Great Recession into such an anemic recovery?

The Great Prosperity

During three decades from 1947 to 1977, the nation implemented what might be called a basic bargain with American workers. Employers paid them enough to buy what they produced. Mass production and mass consumption proved perfect complements. Almost everyone who wanted a job could find one with good wages, or at least wages that were trending upward.

During these three decades everyone’s wages grew — not just those at or near the top.

Government enforced the basic bargain in several ways. It used Keynesian policy to achieve nearly full employment. It gave ordinary workers more bargaining power. It provided social insurance. And it expanded public investment. Consequently, the portion of total income that went to the middle class grew while the portion going to the top declined. But this was no zero-sum game. As the economy grew almost everyone came out ahead, including those at the top.

Paul Ryan Still Doesn't Get It

By Robert Reich, originally posted on his website, May 25, 2011.

Republican House Budget chief Paul Ryan still doesn’t get it. He blames Tuesday’s upset victory of Democrat Kathy Hochul over Republican Jane Corwin to represent New York’s 26^th congressional district on Democratic scare tactics.

Hochul had focused like a laser on the Republican plan to turn Medicare into vouchers that would funnel the money to private health insurers. Republicans didn’t exactly take it lying down. The National Republican Congressional Committee poured over $400,000 into the race, and Karl Rove’s American Crossroads provided Corwin an additional $700,000 of support. But the money didn’t work. Even in this traditionally Republican district – represented in the past by such GOP notables as Jack Kemp and William Miller, both of whom would become vice presidential candidates – Hochul’s message hit home.

Ryan calls it “demagoguery,” accusing Hochul and her fellow Democrats of trying to “scare seniors into thinking that their current benefits are being affected.”

Scare tactics? Seniors have every right to be scared. His plan would eviscerate Medicare by privatizing it with vouchers that would fall further and further behind the rising cost of health insurance. And Ryan and the Republicans offer no means of slowing rising health-care costs. To the contrary, they want to repeal every cost-containment measure enacted in last year’s health-reform legislation. The inevitable result: More and more seniors would be priced out of the market for health care.

The Ryan plan has put Republicans in a corner. Some, like Massachusetts Senator Scott Brown and, briefly, presidential hopeful Newt Gingrich, are rejecting the plan altogether. Most, though, are holding on and holding their breath. After all, House Republicans approved it — and voters don’t especially like flip-floppers.
Senate Democrats will bring the Ryan plan for a vote Thursday in order to force Senate Republicans on the record. Watch closely.

Some GOP stalwarts say the Party must clarify its message – a sure sign of panic. Former Republican congressman Rick Lazio says the GOP “must do [a] better job explaining entitlements.”
It’s just possible the public knows exactly what entitlements are – and is getting a clear message about what Republicans are up to.

All this should give the White House and Democratic budget negotiators more confidence – and more bargaining leverage – to put tax cuts on the rich squarely on the table.

And, while they’re at it, turn Medicare into a “Medicare-for-all” system that forces doctors and hospitals to shift from costly tests, drugs, and procedures having little effect, to healthy outcomes.

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock.  He writes a blog at www.robertreich.org.

Why We Need To Rein In Government Contractors That Use Taxpayer Money For Political Advantage

By Robert Reich, originally posted on his website, May 19, 2011.

President Obama is mulling an executive order to force big government contractors to disclose details of their political spending. Big businesses are already telling their political patrons in Congress to oppose it – and the pressure is building.

The President should issue the executive order immediately. And he should go even further – banning all political activity by companies receiving more than half their revenues from the U.S. government.

Lockheed Martin, the nation’s largest contractor, has already got more than $19 billion in federal contracts so far this year. But we know very little about Lockheed Martin’s political spending other than its Political Action Committee contributions. We don’t know how much money it gives to the Aerospace Industries Association to lobby for a bigger defense budget.

We don’t even know how much Lockheed is giving the U.S. Chamber of Commerce to lobby against Obama’s proposed executive order requiring disclosure of its political activities.

Don’t we have a right to know? After all, you and I and other taxpayers are Lockheed’s biggest customer. As such, we’re financing some of its lobbying and political activities.