Archive for February 2013

Sequester Update – Or Pay Attention to the Fine Print and Political Manuevering

From the Wonkblog today:

“Today, Senate Republicans are pushing legislation that would hand Obama a scalpel rather than a meat cleaver. The Toomey-Inhofe alternative would give the president discretion to allocate the sequester’s cut largely as he sees fit. “If the agencies had the discretion, which they ought to have, [the sequester] can be done,” one Republican senator told me. “But I’d hate to be the OMB director because it would be hard work.”

It is a giant Trojan Horse and here is why.  First as the Wonkblog pointed out:

“The White House argues that the Toomey-Inhofe bill doesn’t give it quite as much control as its proponents say. For instance, it gives the president the power to move cuts from defense spending over to domestic spending, but not to do the reverse. And within the defense cuts, there are limitations on the president’s authority. It forces him to largely abide by the spending decisions made in the National Defense Authorization Act — a limitation it doesn’t place on the domestic side. It also subjects whatever recommendations the White House does make to a congressional vote of disapproval.”

But that isn’t the real problem.  The real problem is this a giant austerity plan that will hurt the economy.  It’s all cuts instead of a more balanced approach of cuts and new revenue, making it the worst of all possible reductions in the debt.  Further, it shifts the responsibility totally to the President so that he takes all the heat for the cuts the Republicans forced on him while they point fingers.  I have already told you what we need to do:  Just Call the Whole Thing Off.  So when Republicans try to blame Democrats for not voting for this, it really represents a total win for the Republicans while still damaging the economy and transfering the blame.  Hey, what a deal.

For Those Who Will Never Look at Data – Where the Debt Came From

From a Center for Budget and Policy Priorities paper: “This represents the final update of an analysis that we first produced in 2009 and have updated once or twice annually since.”  Oh what?  It wasn’t crazy Obama spending?  I don’t know why I bother.

parfait

 

 

Oh, and now maybe you see why the tax cuts really hurt us and the Republicans want to solve it with cuts, not taxes, which mark my words, they will spend on more tax cuts.  Again, I don’t know why I bother.

Just Call the Whole Thing Off Part II

The Sequester of course.  Chris Hayes and others (me, see Why not Just Call the Whole Thing Off) indicate that if both sides say it is horrible, why not just call the whole thing off with a one line bill called The Economic Security Act of 2013 that reads:

“Based upon the fragile state of our economy, this bill rescends the Budget Control Act of 2011 (Sequester).”

See, no assignment of blame, or ideology, just get rid of it, since it did not work to drive a grand bargain and both sides have said it is terrible.  It would be a masterful stroke by the Democrats (they would have to do this today or tomorrow in the Senate and put pressure on the House if the Republicans don’t filibuster) because in reality, the Republicans want the cuts, just don’t want to be blamed for them.  Nothing new here.  So call their bluff and put the welfare of the American Economy up for vote.  Then when Republicans vote it down, it will be clear whose agenda this new austerity is.

It’s the Economy Stupid or Who Said it Best Today: Robert M. Solow and Ben Bernanke

We are headlong bent on destroying our economy by listening to economic conservatives and Very Smart People* (VSP) as Paul Krugman calls them. In a recent appearance of Ben Bernanke before the Senate on Tuesday, one conservative Democrat (Senator Joe Manchin, West Virginia) quoted Admiral Mullen who when asked what was the number 1 threat to our national defense, replied that it was our the debt. He was trying to get Bernanke to agree with Mullen only he wouldn’t. Instead he replied as follows (Wonkblog)

Bernanke: It is certainly an important economic risk and I think it’s very important that over the longer-term that we develop a sustainable fiscal plan, no question about it.
Manchin: His assessment was it was the greatest threat we faced.
Bernanke: I don’t know. There are many — there are many possible candidates for that.

He also tried to disabuse the House Banking Committee of this idea and the use of the sequester to cut the debt (Wonkblog):

The CBO estimates that deficit-reduction policies in current law will slow the pace of real GDP growth by about 1-1/2 percentage points this year, relative to what it would have been otherwise.

A significant portion of this effect is related to the automatic spending sequestration that is scheduled to begin on March 1, which, according to the CBO’s estimates, will contribute about 0.6 percentage point to the fiscal drag on economic growth this year. Given the still-moderate underlying pace of economic growth, this additional near-term burden on the recovery is significant.

Moreover, besides having adverse effects on jobs and incomes, a slower recovery would lead to less actual deficit reduction in the short run for any given set of fiscal actions.

Yikes, you mean Paul Krugman is right? What could Ben know more than an admiral about the economy? Then we have an Op Ed this morning in the NYT in which Robert M. Solow, a Nobel laureate and emeritus professor of economics at the Massachusetts Institute of Technology, lays out what most Americans do not understand about our debt and then closes with (Our Debt, Ourselves):

“In the long run we need a clear plan to reduce the ratio of publicly held debt to national income. But for now the best chance to reinvigorate the economy, spur business investment and encourage consumer spending is through public borrowing and spending. Instead, we’re heading into an ill-advised, across-the-board austerity program.”

But what do these people know, they are just distinguished economists? Clearly our political leaders with their own ideological agendas, unphased by facts know better. Let’s keep listening to the VSPs in Washington who keep repeating the conventional wisdom that spending is our problem and we must cut the debt now. It is working out so well isn’t it?

*VSP – Are those that look at a problem and appear serious because they call for harsh measures and self-sacrifice to seem serious about the problem when those measures are actually counterproductive but makes them appear to be serious thinkers. Very Serious People hear other Very Serious People citing an alleged finding that supports their conclusions, then repeated it themselves, and it became part of what Everyone Knows — after all, everyone they talked to said it was true (this is also known as the Scarborough effect).

“Racial Entitlement”

Pete Williams, MSNBC reporter on Justice Scalia in the Supreme Court hearing on the Voting Rights Act:

He said look at the votes in the Senate when this has been renewed. The first time it was contentious. ‘Every time it has been renewed since then, most recently in 2006, fewer people have voted against it, to the point it was 98-0 last time. Why is that? I think it can be attributed to the perpetuation of racial entitlement. That it is very difficult to get away from that in the normal political process.’ In other words he is saying you cannot trust Congress once it gives the voting rights remedy that the time has come to take it away.”

I guess he missed the whole last election and the “47%” comment because this is in exactly the same vein of makers and takers. It had nothing to do with the law and was a political statement, not a legal one. It will further alienate minorities and this fat old white guy (me). It is actually the worst of judicial activism where he is implying the Congress cannot be trusted to make laws about race because they might pander to the voters. This I think, does not bode well for Republicans. If there are complaints about who this law applies to, just extend it to the whole country.  I don’t think they have a clue how much anger this will release in this country if they strike down this law.  Republicans are morons.

State’s Rats

In the wonderful novel about the Civil War battle at Gettysburg, Killer Angels, a Northern solider explained to his superior how he had questioned his Southern captives about why they were fighting and could not understand what State’s Rats were. Of course, he was saying State’s Rights, which was the excuse the South was using to continue the barbaric practice of slavery. The North was fighting to free the slaves, well really to hold the Union together, and the South had reframed the argument euphemistically to be fighting for their individual State’s rights. State’s Rights has been the argument about the separation of powers in the Constitution that has allowed individual states to disenfranchise people throughout our history.

So today we have before us the Supreme Court hearing arguments about weather the Voting Rights Act has outlived its usefulness and the extra burden it has put on some states is no longer necessary. I don’t intend to make the arguments that will undoubtably be made in the court. On this one it is kind of like the definition of pornography, you know it when you see it. Republicans are making blatant moves to deny minorities (those who usually vote Democratic) the right to vote, from gross gerrymandering of state and federal elections, to voter ID laws and restricted polling place access. The bottom line here is that it will always be a problem if left to the states and is why, quite frankly, the Voting Rights Act should be extended, not struck down, with national standards of voter identification, polling places per capita, early voting, and oversight.

But what we have is a Republican Conservative panic in that not only have their ideas failed to appeal to the majority of Americans, it is getting worse. So they are resorting to State’s Rights to inflict further damage on the American Democracy and we have a Supreme Court whose majority is of the extreme right who will try to strike down this law. Remember these are the guys who gave us (no gals involved here) Americans United and unlimited cash contributions to election campaigns and then denied that would open up the spigots. State’s Rights has always been a way to disenfranchise blacks, women, and minorities. From education to voting rights and access to choice, State’s Rights has been the tool of suppression and it is the reason that contrary to Republican ideology, the federal government, enforcing our Constitution, is so important.

But here is the important thing to take away from this. If the Supreme Court, like their ruling on the 2nd Amendment, misinterprets the Constitution again to further their conservative ideology, they risk totally losing credibility with the American Public, and like the counterproductive attempts to limit access to the pools, may cause a backlash that we may finally get rid of these ideologues given to us by the Bush family. This could be the last straw in a total Progressive insurrection and the end of the Republican Party. Next up is gay rights, and we will see if they also hide behind State’s Rights on that one to continue bigotry and disenfranchisement.

Sequester for Dummies

Well actually a sequester is for dummies because it is the dumbest thing we can do and at this point most people get it. But we are doing it anyway because Republicans are crazy and the media won’t say that, just neither side is negotiating. It is that both sides do it argument that is a gross mischaracterization of the real situation in Washington and a large part of why we are in this mess right now. So here is a quick summary of where we are:

Last year Republicans tried to hold the nation hostage to defaulting on our debt by threatening default by not extending our borrowing capacity if they could not get the massive cuts they wanted. So the White House and the Republicans came up with the sequesters, cuts so stupid and so bad that it was thought no one was crazy enough to do that, so some settlement would have to be reached by the end of the year when they kicked in.

Meanwhile in fear the deficit land, the deficit of which has been going down for the last three years in record amounts but nobody seems to notice, the fiscal cliff arrived and we agreed to put off the sequester till 1 March when there was an agreement because the Bush tax cuts were expiring (the thing that really got us in trouble in the first place, plus some really stupid wars, and the finance guys crashing the economy). That agreement raised taxes somewhat on the wealthy, but also made some cuts that when added to other cuts we have made, gave us a ratio of 3-1 cuts to tax revenues to pay down the debt.

Now we probably ought to stop right here and reflect. We are in a lesser depression, employment is depressed, and cutting during this time appears to have the effect of making things worse. Europe, the test case in point, is demonstrating that in spades. Not only does it depress the economy, but as Ben Bernanke said yesterday, could in fact decrease revenues further and actually make the deficit worse. So this doomsday scenario to make everyone negotiate some grand bargain is really a time bomb to bring us down, and right now we should be focusing on jobs and growing the economy, not the debt, at least until the economy is stronger.

Now President Obama has submitted a plan to cut some programs and raise revenues by going after tax loopholes. No, we should not be cutting right now, but this is a middle of the road position to try to bring the Republicans along. But the Republicans (John Boehner) have said you got tax increases last time and now it has to be all cuts. In other words, President Obama put a balanced plan on the table, the Republicans said all cuts (my way) or nothing, and that is where we stand. So actually who won’t negotiate again? The only way negotiations could happen in this atmosphere is if the President would alter his plan to all cuts and give the Republicans all they want. Didn’t they loose the last election on this very issue? This is what the media calls both sides aren’t talking when the reality is the Republicans won’t negotiate since they won’t talk unless we give what they want, which, remember, will further depress the economy.

Oh, and there is one more interesting thing to note about this Republican all cuts demand. They won’t name the cuts they want and demand that President Obama put a plan out there. Why the media doesn’t demand to see a Republican cuts plan is beyond me. The Republicans know that when the details of any all cuts plan is laid out, it is going to be highly unpopular so they are demanding the President lay this plan out so he will take the blame for what the Republicans are demanding. And we are surprised the President won’t play?

Meanwhile in La-La land, John Boehner is demanding that the Senate do something ( he said the House won’t move a budget bill until the Senate “gets off their ass and begins to do something.”). Wait, doesn’t our Constitution require in Article I, Section 7, Clause 1, that all Bills for raising Revenue shall originate in the House of Representatives?

So let’s summarize: The sequester is monumentally stupid. The deficit is already coming down. We now need to take steps to grow our economy. The Republicans are demanding all cuts, and the President has offered a plan that is 3-1 cuts to tax revenues (through closing loopholes). The Republicans will not tell us what cuts they are demanding, won’t propose a plan, and are demanding that the President simply cave to their demands, and both sides aren’t talking? The media are nitwits and the only hope is in 2014 the Democrats retake the House and Harry, Gutless Reid finally reforms the filibuster. Until then, the wrecking crew called Republicans are running (or is that ruining) the nation and the press is still saying both sides are at fault. Hey is this a great country or what?

If your still confused try The Absolute Moron’s Guide to the Sequester.

Who Said It Best Today: Mark Thoma, Economist, University of Oregon

Is it possible that the artificial crises that Republicans have created during these negotiations pose a much greatest risk to our future economic growth than the debt itself?

It’s not only possible, it’s highly likely.”

Read more at The Fiscal Times

Why They Think What They Do, or Explaining David Brooks

Why deny science? Why deny data or carefully select your data to ignore contradictory findings? How can you say there is no global warming in light of melting ice caps and the hottest year on record? Oh wait, let’s take a poll to see if it is true. Why deny that after four years of austerity in Europe, austerity contracts the economy? Why deny that data shows flow down doesn’t really happen or worse, continue to propose policies based upon the belief in that concept? Why do we continue to blame oil prices on local policies, when the price of oil, regardless of where it is produced, is determined by the world market? Here is the big one: Most of us agree that the sequester is a very bad idea so why can’t we just call it off?

In a word, conservatives. Well that is not entirely true. That is just a label, not the why, and there are a whole spectrum of conservatives. In some ways each of us has a conservative streak. It is that we resist change. But why, and why in some does it make them irrational, like our current crop of Tea Party House members? The answer is FEAR, gut wrenching paralyzing terror. At the heart of every conservative is fear of chaos, fear of the unknown, but basically fear of losing control. For them, what holds every thing together are rules. Follow the rules everything will be fine and more importantly, rules don’t change (change brings on chaos).

Now being conservative is not necessarily a bad thing, you know, remember that old expression throwing the baby out with the bath water? Or do you remember, “If it works, don’t fix it”? The problem comes in when it doesn’t work, but your conservatism is so controlled by your underlying fear of chaos that you deny it is not working anymore. Welcome to the modern Republican Party whose ability to deny reality is truly astounding today.*

Paul Krugman has tried to explain why with the overwhelming data on the failure of austerity in Europe, many leaders are doubling down (Little Statesmen and Philosophers). He calls it careerism. They can’t admit they are wrong, because then people would start wondering what, if anything, they got right, “because their personal position would be hurt if they admitted to past mistakes.” I think it is deeper than that although for the more rational that may be true. Conservatives have this belief in the market system as the perfect arbitrator of justice. Debt is irresponsible, therefore debt must be what is depressing the market. To admit that debt in certain situations is not the driving cause of poor market behavior is to admit the world is gray. Gray equals chaos and fear and panic well up. All else is blotted out. We just need to work harder at getting that debt thing under control.

When you look at many of their beliefs, you can see this dynamic in operation. Why do you think so many fundamentalists are conservative. The Bible is the ultimate rule book and life is greatly simplified if you just follow the rules. The fact that part of the Bible is a contradictory and cruel is simply blotted out in their minds. Why are so many conservatives afraid of gay marriage and see it as a threat to traditional marriage? It breaks the rules as they see them and releases chaos. After all they have argued that next will come marriages with animals. Why did ( and do) so many conservatives blame the crash in 2007 on people who took out bad loans or Freddie and Frannie, when all data shows this isn’t true, but the unregulated operation of the markets (tons of money to be made by packaging bad loans, ergo, package more loans)? Because it must be people who broke the rules or upset the true operation of the market place. To believe anything else raises real questions about the role of government and rule following in general, or at least what those rules should be. Note that conservatives are big on personal responsibility until bad things happen to them, then it is different (See aid to Sandy versus aid to Southern States after the hurricanes/tornados).

How could David Brooks so mischaracterize President Obama’s proposal to end the sequester as not existing (See David Brooks Lies). The answer to that is that he cannot face the fact that the conservative approach to our economy has failed so miserably and to admit that President Obama has offered a very middle of the road plan of cuts and revenue increases while the Republicans have refused anything that is not all cuts, and that would be to finally admit that the Republicans are off the deep end. He has hung on to both sides do it for so long, to now recognize that that is not the case at all would raise all sorts of questions about other assumptions he has made that it would release chaos in his mind.

Why has the Republican Party become so radicalized and so far to the right? Because as their belief systems are being dismantled by reality, they are becoming more and more frantic due to their panic, to hang on to things that just don’t work anymore. To recognize that the world is a gray place and one size fits all doesn’t work, is to question their whole edifice for maintaining control, belief in the market system justice, and that the world is fair if you follow the rules. That is why they lack empathy. Empathy allows one to walk in another’s shoes and see that the world does not work the same for everyone, and maybe the role of government is to make it fair.

Watching conservatives tell us we need to go back on the gold standard is an exercise in ignoring the history of the gold standard and the problems it caused. Watching conservatives being terrified of the debt is an exercise in ignoring or reinventing the lessons of the 1930s. Watching conservatives cringe at the printing of money (fiat currency) is to understand that they cannot adjust their thinking to different economic conditions. Sometimes it does bring on the feared inflation, but not when the economy has crashed. Watching them decry that we will be Greece tells me they have no understanding of what it means to have your own currency. Said more simply, they have one set of rules to ward off chaos and they cannot adapt them to different conditions and fear change so much that they reinvent reality. It is the very essence of being conservative today. It is not just caution about unintended consequences or “throwing the baby out with the bath water”, it has become an exercise in denial that is reaching pathological proportions.

We as a nation really can’t do anything any more because we are chained to those so fearful of changes that they have paralyzed our government. Sadly instead of calling out their pathology, we have a media that feeds on it in the age of news as entertainment. We know what the solutions are and we have tons of data to wipe away any doubts, but those that deny that data are still being given an equal place in the market place of ideas because it sells cereal. Until we push these people aside, we are going nowhere and we have whole segments of our society who are being mislead. But I thought you might like to know why they do what they do and blame others for our problems. If everyone just followed their rules, things would be peachy, right?

*Mundane example: On Monday on Now with Alex Wagner, Michael Steele replied to a comment about how the American people don’t support the Republicans with the statement that they had voted for a Republican majority in the House of Representatives. Is he lying to himself? There were 1.4 million more votes cast for Democrats than Republicans in the House of Representatives, but because of redistricting and gerrymandering, the House of Representatives no longer represents the majority of votes.

Note: I am not the only one who sees this. See the latest: Are Republican’s Brains Different? in Slate

So Why Not Just Call the Whole Thing Off

I am talking about the sequester, and the answer is fairly straight forward. The conventional wisdom is that neither the Democrats or the Republicans would support this. Democrats want the cuts in Defense, and Republicans, well they just want cuts. So see both sides do it. But I do not believe that is the case. The Democrats would worry a little, but they would vote for it because they really do care about the damage that will be done, and cuts in the Defense Department are not worth it. Republicans will not go for it because they want cuts no matter what and it is their bargaining chip. One side actually cares about who it would hurt and the other side cares about ideology.