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Social Security: Real People, Real Benefits

Evans Liberal Politics
March 29, 2011

 

Social Security: Real People, Real Benefits

Social Security: Real People, Real Benefits, Campaign for America’s Future, March 28, 2011, by Terrance Heath, photo courtesy of Campaign for America’s Future, article used with permission, quoted verbatim:

“This is not some abstract debate. This is about real people who live real lives.” Those were the words of Wade Henderson, CEO of the Leadership Council on Civil Rights, at the Strengthen Social Security press conference on Capitol Hill this afternoon. The press conference is part of Strengthen Social Security’s push for Americans to call Senators and urge them to vote to protect Social Security.

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“Real.” It’s a word that’s been overuse in our political discourse, by politicians trying to distinguish between “real America” and the rest of us.

But as he moderated the press conference, Henderson introduced speaker after speaker whose stories illustrated his point that the debate over Social Security is about “real people who live real lives,” who would face very real consequences if the GOP succeeds in cutting Social Security benefits, raising the retirement age, or privatizing the program altogether. As I listened to their stories, I remembered those of people I’ve known — just as “real” as anyone else’s — whose lives would have been far difference without Social Security, and will be much different if the GOP has its way.

The facts, numbers and statistics about Social Security are readily available, and have been so well explained and analyzed by lots of people that I don’t need repeat all that here. While those facts should be distributed and read far and while, after listening to the speakers at today’s press conference, I think most Americans understand the importance of Social Security because of its impact in their own lives, and those of people they know and love. The numbers bear that out.

I’ve sometimes jokingly said that I’ll never retire, but will probably “work until I fall into my grave.” I’m only half kidding, not because I believe the hype about “fixing” Social Security, but because I’m afraid of what might happen to it if people like Rep. Paul Ryan get their hands on it. But for some people it’s not a joke. It’s real.

It’s real for Pat Cotton, a 70-year-old clinical nurse’s assistant from Virginia who talked about how she’s still working full time in order to pay her bills. Even though she started receiving Social Security five years ago, she uses it as a “cushion” while she saves for the retirement she hopes to enjoy soon. Like millions of Americans, who watched their 401ks — their market-invested, retirement nest eggs — disappear when the market tanked in 2008, the 401k experiment has failed, as Dave Johnson noted.

So, how has the 1981 401K experiment worked out? It’s 2009, and no one can afford to retire. Wealth is massively concentrated at the top. So maybe it didn’t work out so well – for us. Pretty well for those at the top, though.

But I’m not advocating a return to corporate-funded pensions for their workers. I think we should tax corporate profits and put money into greatly expanding Social Security so everyone – not just people who work for corporations – can afford to live well when they are old. That would be the solution a democracy would choose.

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Cotton also worries about her children, now all in their 50s, who have paid into Social Security and who may not receive the benefits they’re due if the GOP succeeds in cutting benefits, or raising the retirement age.

It’s real, too, for Sam — an employee at The Bagel Grove in Utica, NY; a family business owned by Annie Wadsworth and her husband, started by her husband’s parents. Their business started with a pension plan, but had to convert to a 401k. Wadsworth, who spoke at the conference, related that Sam had jokingly told his wife, “If I die tomorrow, I want to be buried in my Bagel Grove uniform and hat.”

Sam might have been joking, but Wadsworth explained that Sam — who works the night shift, standing in front of a 400-degree oven as part of the team that makes about 500 dozen bagels — is nearing retirement age and “doesn’t have a good set of lungs.” For workers like Sam, Wasdworth said, cuts in benefits could mean working until he literally “drops into his grave” wearing his Bagel Grove hat and uniform.

Wadsworth invited lawmakers who are eager to cut Social Security benefits and raise the retirement age for workers like Sam to come up to the Bagel Grove and do Sam’s job for a day.

Rajini Raj, a registered nurse from Silver Spring, Md., extended the same invitation to lawmakers to come and do her job for a day. But, they’d better have strong backs, as Raj explained:

Nurses lift 1.8 tons every day, mostly in transferring and repositioning patients. That means many of work with back pain, and 12 % of nurses leave nursing because they are no longer physically able to do the work…I know I won’t be able to lift 300+ pound patients when I am 68 years old.

As Raj spoke, I thought of my niece, who’s also a nurse, and how GOP proposals to cut Social Security would impact her by the time she reached retirement age. If she’s among the 12% who leave the field due to injuries, would disability benefits be available to her?

Raj also spoke of her parents, who worked for almost 40 years, and are on Social Security, the hardship they they would face if they could no longer count on Social Security to help make ends meet, and her own difficulties if she has to help them while saving for her own retirement. As Raj, spoke of her parents, I though of my own mother. Throughout their 50 years of marriage before my father’s death, she was a stay-at-home parent while we were growing up, and after we left home put her energies into running the “food bank” at her church, and other volunteer activities.

Before she married, my mom studied cosmetology and opened her own beauty shop. But At 76 years old, it’s unlikely she’d be able to go back. As a widow, she collects the benefits my dad paid into Social Security. I wondered what would happen to her if those benefits were reduced, and she herself has expressed that fear to me.

Would she lose her independence, and have to rely upon her children to support her? Between the three of us, how well would we be able to afford that?

Story after story from “real people” emphasized Wade Henderson’s point. Even such luminaries as Senate Majority Leader Harry Reid and Sens. Tom Harkin, Al Franken and Richard Blumenthal drove home the point with told stories of how Social Security benefited their families. Reid’s grandmother held on to her independence thanks to her “old-age pension check.” Harkin’s widowed father, who bought a farm and lost it in the Great Depression, raised three boys to adulthood with the help of Social Security benefits. Social Security benefits helped Al Franken’s mother-in-law, widowed at 29, raise five children to be productive citizens as an adult.

Their stories underscored Henderson’s point about what’s at stake in the current debate over Social Security, but Sen. Bernie Sanders reminded everyone what it was like before Social Security: “Before Social Security, 50% of senior citizens lived in poverty. That was true for the disabled, too. If you were disabled, you were on your own. If you were widowed or orphaned, you were on your own and left to beg. This number is still too high, but only 10% of seniors live in poverty today.”

The difference between how and then is a promise made and a promise kept to working people in America, as Reid summed up, “If a person worked hard and contributed to Social Security, America would make sure they could retire with dignity. That promise, made 75 years ago, is called Social Security — the most successful social program in history of the world.”

As I said earlier, the numbers and statistics on Social Security are important to know, but if we look at our own lives and those of people we know and love, we can see every day the benefits of that promise, and the importance of keeping it.

Terrance Heath is the Online Producer at Campaign for America’s Future. Prior to his current position he worked as a Blogging and Social Media Consultant for a number of organizations and agencies, as an outgrowth of his work as Blogmaster for EchoDitto, Inc. He stumbled into blogging and social media after starting his own blog, The Republic of T., but cut his teeth as an activist working on LGBT equality and HIV/AIDS issues. In that capacity he worked for the Human Rights Campaign and the National Minority AIDS Council. Terrance has kindly allowed Evans Liberal Politics to publish his works on an ongoing basis. He sums himself up: Black. Gay. Father. Vegetarian. Buddhist. Liberal.

Watch (here on site, click the triangle): Democrats Highlight Dangerous GOP Plan To End Social Security As We Know It, Senate Democrats on YouTube – 3:41.

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Posted on March 29, 2011 by , Reply

The Pledge to America: A Pledge to 1% of America

Evans Liberal Politics
© Campaign for America’s Future

 

The Pledge to America:
A Pledge To 1% of America


A Pledge to 1% of America, Campaign for America’s Future, October 8, 2010, by Terrance Heath, used with permission, quoted verbatim:

It’s almost a shame that Americans are paying very little attention to the GOP’s “Pledge To America.” But maybe that’s because most of it has nothing to do with them. What is not mentioned in the document makes it clear that it doesn’t speak to the urgent challenges Americans are facing. It doesn’t “pledge” to address the mass suffering inflicted on millions of America by the current crisis, or what failing to do so will mean for generations of Americans, because it’s not a pledge to most Americans. It’s a pledge to 1 percent (or even less) of America.

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Much has been made of the colorless America depicted in the presentation of the pledge itself.

The point is a valid one that needs to be made. But the real color the “pledge” is concerned with is green, and those who have the most of it are its primary beneficiaries.

Recent statistics tell the story of what the rest of America is facing right now:

This leaves out older, even more depressing statistics. It’s just a snapshot of the reality millions of Americans are facing today. Not only does the “pledge” not address that reality, it fails to solve the problems behind those statistics. In fact, it barely mentions them.

Jobs


In this political climate, who isn’t in favor or jobs? Who in their right mind could be “against” jobs? (I said who in their right mind.) With nearly 15 million Americans unemployed, jobs have become part of the refrain on the left and the right. The mantra on the left has been “Jobs, Jobs, Jobs,” while the right has been fond of chanting “Where are the jobs?”

The difference between the two couldn’t be any clearer. Democrats and progressives can point to stimulus programs that have created jobs in the midst of recession — some in the home districts of the very same Republicans who voted against the stimulus in the first place — even though the stimulus was smaller needed, after being whittled down to satisfy the demands of Republicans (and Blue Dogs). Republicans, for all their chanting of “Where are the jobs?,” conveniently forget the ones the stimulus created in their own back yards, and the 240,000 jobs the GOP killed so recently that the corpses are still warm.

What does the “pledge” say about jobs? Not much. The word appears in the “pledge,” but the GOP’s plan for job creation amounts to little more than the “cut taxes and hope for the best” approach that not only didn’t work before but left us ill-prepared for the current crisis.

After virtually eight years of Republican control of government, here’s what we know about their tax cuts for the wealthy:

Not only are Republicans fighting to extend the same tax cuts for the wealthy that proved disastrous for America’s economy, its middle class and working class, but they are holding hostage tax cuts for middle and working class Americans in order to preserve tax cuts for the wealthiest Americans.

For eight years, the Republican answer to every problem was “tax cut,” to the point that it was almost comical. Then, at least. It’s a lot less funny now, given the seriousness of the challenges facing America, and the GOP’s “pledge” doesn’t begin to offer real solutions to the problems fueling the joblessness crisis. In fact, those issues barely get a mention.

Trade


The word “trade” appears in the “pledge” just twice, and then only preceded by the words “cap and.” Yet, America has long been saddled with a huge and growing trade deficit, that saps economic growth here at home by sending consumer dollars over seas, and leads to the outsourcing of American jobs. In fact, the trade deficit costs jobs in every congressional district.

Americans, by and large, “get it. Not only do a majority of Americans say that the trade deficit has hurt the U.S. economy and cost American jobs, but 65% of union members and 61% of Tea Party sympathizers agree. Research and statistics back up what a majority of Americans know in their guts. A study published on the Alliance for American Manufacturing site earlier this year showed that the trade deficit with China cost 2.4 million American jobs between 2001 and 2008.

Yet the “pledge” doesn’t mention trade or the trade deficit. At all. (“Trade” appears twice, and “deficit” four times, but “trade deficit” not at all.) The GOP didn’t do anything about the trade deficit when the last time they held power in both Congress and the White House, and they don’t “pledge” to do anything about it if they take over Congress next year.

However flawed the Democrats anti-outsourcing bill might have been, even the attempt at legislation indicates the party is at least listening to the concerns of a majority of Americans — a majority of tea baggers, even — on this issue. Republican, on the other hand, filibustered and blocked the bill, which attempted to address an issue of major concern to Americans and major importance to the U.S. economy — an issue the GOP’s “Pledge to America” doesn’t even deign to mention.

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Manufacturing


Tied to the trade deficit and outsourcing of U.S. jobs, is the decline of manufacturing. After a decade of the GOP’s virtual lock on government, not only did the jobless rate reach a 26-year high, but manufacturing reached a 26-year low.

It’s no surprise, considering that the 2.4 million jobs lost between 2001 and 2008 are just part of the six million U.S. factory jobs lost in the past dozen years, due to the fact that 40,000 U.S. manufacturing plants closed their doors between 2001 and 2008.

The loss of those jobs effectively removed what was for many American the first rung on the economic ladder to middle-class stability — good jobs, as Mary Kay Henry wrote, the “jobs you can raise a family on,” jobs that let you afford to educate your kids, and give them a chance to clime those next few rungs with the boost you’ve given them.

In the past 30 year, those jobs have become harder to find.

The Center for Economic and Policy Research defines a “good job” as one with health insurance, a pension plan and earnings of at least $17 per hour. That works out to about $34,000 a year, the inflation-adjusted median income for men in 1979, when U.S. manufacturing jobs numbered 19.6 million, an all-time high.

Since then, however, the economy has lost nearly 6 million manufacturing jobs — 52,000 in February alone. Among them were many of the 3.5 million “good jobs” lost from 2000 to 2006, according to John Schmitt, a senior economist at CEPR.

As those jobs disappeared, many blue-collar workers were forced to take jobs with far less pay and benefit security.

…Helping fuel the loss of good jobs has been a decline in union membership, industry deregulation, increased outsourcing of state and government services and economic policies that focus more on containing inflation than on maintaining full employment, Schmitt said.

Earlier this year, Democrats rolled out a Making It In America initiative aimed at helping restore American manufacturing, and the jobs lost with its decline. Whatever the particulars of the plan, acknowledges the what the decline of manufacturing has meant for America’s economy and American workers, and tries to offer a solution to what most Americans agree is a problem.

By contrast, the “pledge” barely mentions manufacturing, save one caption in a chart bemoaning how few Americans work in manufacturing as opposed to government, without ever once asking or answering a simple but critical question: Why?

Perhaps because the answer would point to their own policies and politics.

Inequality


That the term “inequality” doesn’t get so much as a mention in the “pledge” doesn’t come as a shock. That the term “equality” or even the phrase “equality of opportunity.” which made numerous appearances in the Cantor/Ryan/McCarthy propaganda piece Young Guns, suggests the GOP is ignoring not only the growth of economic inequality, but its destructive impact on “equality of opportunity” for generations to come.

The most recent period of Republican dominance in government was a “lost decade” for American workers. Not so for America’s most wealthy. It was a boom for top 1% and a bust for the rest of us. The gains that boosted the income of the top 1%, never trickled down into the paychecks of American workers.

• Real wages have been stagnant for many workers in the 2000s. After rising quickly in the second half of the 1990s, most workers real wages have been stagnant in the 2000s, especially since 2003. This result holds for a wide variety of wage and compensation measurements, including those that add the value of fringe benefits.

• The productivity/wage gap has grown. The gap between productivity growth and workers wages, especially those of middle- and low-wage workers, is at a historically high level.

• Wage growth has been unequal. Wage growth in the 2000s followed a highly unequal pattern, and higher-wage workers gained the most ground.

• Despite low unemployment, workers’ bargaining power has diminished. Though the unemployment rate has been low in historical terms, it does not capture the erosion of employment relative to the population caused by weak growth in (or withdrawal from) the labor force over the past few years. The bottom line is that many workers still lack the bargaining power to claim their fair share of the productivity growth they themselves are helping to create. This is partly due to weak job creation over the course of this recovery.

• More downward pressure on wage growth is likely. The recent slowing of productivity growth and rising unemployment are likely to place further pressure on most workers’ real wages in the near to medium terms.

From 2001 to 2006, the highest earning 1% received 75% of the income gains.

Read the full article on Evans Liberal Politics, here.

Of Interest in the News: NRA backs Democrats in key races, GOP Freaks Out, The Washington Post, October 6, 2010, by Ben Pershing.

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Posted on October 8, 2010 by , 1 comment

Bankers Broke The Economy And Got Rich Doing It

Evans Liberal Politics
October 3, 2010

 

Bankers Broke The Economy And Got Rich Doing It


Bankers Broke The Economy And Got Rich Doing It, Campaign for America’s Future, October 1, 2010, by Zach Carter, quoted verbatim:

Today’s absurd William Cohan column actually argues that we don’t need consumer protections in banking—nevermind the subprime explosion, the $8 trillion dollar housing bubble or the 1.2 million foreclosures expected this year. Nevermind the $38 billion in overdraft fees the banking industry reaped in 2009, or the ridiculous fine-print on credit cards. Nope, in William Cohan’s crazy world, the mortgage crisis was basically a problem caused by idiot consumers who—according to Cohan– don’t even deserve basic legal protections.

(Note by Evans Liberal Politics owner Paul Evans: last year the banks had a profit of "only" $12 billion. But they charged obscene overdraft fees totaling the just-mentioned $38 billion. So without their immoral, calculated, software-driven overdraft fees, the banking industry would have lost $26 billion. In other words they had to screw everyman in order to be profitable.)

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Cohan makes only two real points in his column, both of them profoundly stupid. The silliest objection is his obviously disingenuous sticker-shock at the $500-million-a-year budget the new Consumer Financial Protection Bureau will have:

“In an era of huge budget deficits and a depleted treasury, that’s a lot of money for taxpayers to fork over every year to support a new government bureaucracy designed to protect us from our own worst impulses.”

Nobody who knows anything about budgets could be appalled by this number. Even by the standards of government bureaucracy, the CFPB’s funding is paltry. It’s only 10% of the Fed’s annual budget, and about half of the SEC’s. Eliminating or quintupling the CFPB’s funding would be totally insignificant to the overall federal budget. But even if this number did matter, Cohan’s analysis is preposterously short-sighted.

Employing a police force seems like a waste of taxpayer dollars until you get robbed, and so it is with financial regulation. Right now the U.S. economy struggling through a horrible recession, which has included significant government expenditures to bailout Wall Street and keep the job market afloat. All of this was caused by a predatory lending binge financed and implemented by Wall Street. Decent consumer protections would have prevented the housing bubble from getting totally out of control, and would have prevented Wall Street from destroying itself. If it costs us $500 million a year to save 8 million jobs, $8 trillion in household wealth, and $4 trillion in bailout money, that seems like a pretty good  deal to me.This budgetary argument holds no matter who is responsible for the mortgage crisis, be they banks or borrowers, predatory or pristine. But Cohan doubles down on his idiocy, saying that actually, borrowers don’t deserve to be protected from predatory banks.

Like virtually every senseless diatribe against the CFPB written over the past two years, this attack isn’t directed against the CFPB itself, but against the very idea of consumer protection—something that has been a common-sense element of bank regulation for centuries. Things got off track over the past thirty years (with accelerating aggressiveness during the Bush years) as bank regulators simply stopped enforcing consumer protection laws.

The CFPB does not create some wild new standard of regulation—it’s just an effort to ensure that somebody actually enforces the basic consumer protection mandate that existing regulators have ignored. The existing regulators failed, because they’re more worried about short-term bank profitability—the more money a bank makes, the less likely it is to fail, and the less likely that the regulator will be embarrassed by a disastrous bank failure. To existing agencies, it doesn’t matter where that profitability comes from—if it’s from predatory lending, they’ll just look the other way. The CFPB breaks this perverse incentive structure by establishing an agency that only works with consumer protection issues—not bank profitability.

Cohan waits until the final paragraph of his column to deliver the “evidence” for why we don’t need a CFPB, and he gets it completely, horribly wrong.

“Yes, some people who have lost their homes were victims of fraudulent mortgage brokers and shady lenders. But the vast majority of those who held the billions of dollars in mortgages now foreclosed on knew exactly what they were doing. And one of the dirty little secrets of the financial crisis is that one homeowner after another signed mortgage-loan documents that were filled with inaccurate information about his or her net worth, assets, salaries and ability to make monthly mortgage payments. Why would someone sign a loan document knowing full well the information on it was inaccurate and the mortgage could never be repaid?”

The only real statistic on mortgage fraud comes from the FBI, and it doesn’t back up Cohan’s claims at all. As early as 2004, the FBI was warning about an “epidemic” in mortgage fraud—not a few bad apples, not “some people,” but an epidemic . We know that mortgage fraud was standard operating procedure at Washington Mutual, now part of JPMorgan Chase, and they weren’t alone—for five years, rampant fraud was a basic component of the U.S. mortgage machine. And according to the FBI, 80 percent—repeat, 80 percent—of this fraud was perpetrated by the lender.

So, let’s answer Cohan’s question. Why would people knowingly set themselves up for foreclosure? They wouldn’t! The key incentives for fraud and deception do not apply to rational borrowers who want to live in their homes. They apply to lenders, who were being paid very well to push borrowers into unaffordable mortgages. Bankers and brokers were paid kickbacks to steer borrowers into subprime loans, when those same borrowers would have qualified for ordinary mortgages. With heavy demand for mortgage-backed securities on Wall Street, banks knew they could issue garbage loans and stick other investors with the tab—so they did. The list of lenders who pawned their crappy loans off onto other people includes many of the biggest names in finance: Wells Fargo, Wachovia, Citigroup Bank of America, Countrywide, Washington Mutual and more. Banks stood to make a lot of money from fraud. Borrowers, by contrast, could count on foreclosure. Who do you think is going to falsify the income on loan applications?

Sure, there were borrowers who tried to game the system. But the story of mortgage fraud in the housing bubble is overwhelmingly a story of malpractice by bonus-crazed bankers, not borrowers. We need Elizabeth Warren and the CFPB to protect our economy from such abuses. This is a question of basic law enforcement, something Cohan apparently believes should not apply to ordinary citizens looking to buy a home.

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Posted on October 3, 2010 by , 1 comment

Issues for Progressives: White House (Finally) Considering Another Stimulus?

Evans Liberal Politics
September 3, 2010

 

Issues for Progressives:
White House (Finally) Considering Another Stimulus?

 

Progressive Breakfast: White House (Finally) Considering Another Stimulus?, Campaign for America’s Future, September 3, 2010, by Terrance Heath, used with permission, quoted verbatim:

White House (Finally) Considering Emergency Stimulus


Politico Reports that the White House is considering an emergency economic stimulus: “The Obama administration is mulling a raft of emergency fixes to stimulate the economy before the midterms, including an extension of the research and development tax credit and new infrastructure spending, according to several people familiar with the situation. Administration officials have been huddling almost continuously during the past week, brainstorming for ideas that would boost employment without hiking the massive federal deficit – with Treasury Secretary Tim Geithner rushing to the West Wing for further consultations late Thursday. The White House press office on Thursday refused to say how much a financial package might be, other than to say it won’t be a “second stimulus.” But the administration will have a tough time selling nearly any package to terrified, Obama-phobic Hill Democrats who increasingly blame the president – and his ambitious, expensive legislative agenda – for their dismal prospects this November.”

It’s (Still) The Economy, Stupid


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Bernanke tells the Financial Crisis Commission that he had no options to stop Lehman’s collapse: “Federal Reserve Chairman Ben Bernanke told a panel examining the U.S. financial crisis that he had no options to prevent Lehman Brothers’ failure in September 2008 even though he knew its downfall would be “catastrophic” to the financial system and economy. The Lehman failure set off severe market turmoil, spurring debate about whether the government should have done more at the time to halt the investment bank’s collapse. Speaking to the Financial Crisis Inquiry Commission on Thursday, Mr. Bernanke said legal and practical considerations prevented taking action, even though ‘I never at any time wavered in my view that we should do absolutely everything possible to prevent the  failure of Lehman.’ The Democratic chairman of the 10-member panel, Phil Angelides, pressed Mr. Bernanke on the move, again calling it a ‘conscious policy decision,’ as he did during the commission’s hearing on Wednesday, citing comments from other government officials.”

Dean Baker considers the latest advice from the IMF, and wonders why these people still have jobs: “If the boys and girls at the IMF can learn a little economics, they would discover that we can run a deficit that is pretty much as large as we want in a period of high unemployment like the present. This does not have to create a debt burden because the Fed can just buy and hold the debt. This way the interest on the debt is paid to the Fed, which is then refunded to the Treasury. If we are lucky this process will generate a little inflation which will lower the real interest rate and reduce the debt burden on households and the government. If they have trouble with the theory, they can see how this works in practice. There is a small island nation where the central bank has bought an amount of debt that is almost equal to its GDP. It’s called “Japan.” Its interest burden is less than 2 percent of GDP and the interest rate on long-term debt is well under 2.0 percent in spite of having a debt to GDP ratio of 220 percent. It is incredible that IMF economists still have jobs. It is even more incredible that anyone in a policy position would waste their time listening to them.”

Ruth Marcus wants us to get shed of the word “shed”: “How did shedding migrate from shaggy dogs to job loss? The Oxford English Dictionary cites The Economist of March 1975, “the industry shed about 100,000 of its workforce.” In the last three months alone, a computer search of news reports shows 2,116 uses of the term in connection with jobs, from Ireland to Fiji. You can imagine how the term took hold. Financial writers became bored with saying the economy lost jobs. Shed is evocative. Shed worked for copy editors trying to cram the news into a headline only a few columns wide. But what might have been compactly colorful is now unnecessarily insensitive—not to mention trite. Lost is a better four-letter word. Even the Bureau of Labor Statistics, the official tallier of the nation’s joblessness, stoops to shed.”

As the summer comes to an end, Liz Schuler explains what a jobless summer means for young people: “So, what does this mean beyond a bunch of teenagers without gas money, a few new video games or an outfit their parents won’t finance? Plenty. A May report in the National Journal described the job plight of today’s young workers as a broken escalator. Instead of young people getting on at the bottom and smoothly traveling to the top throughout their careers, workers already near the top are losing jobs and going backwards, nudging out young people trying to climb on. Older workers who can’t afford to retire aren’t stepping off the escalator to make room for a new generation. And with jobs still disappearing, the escalator has all but stalled. That’s what we see in the teen jobless rate. Teenagers are competing with jobless adults for low-end, entry-level positions. This is especially true where state and local budget crises have destroyed summer jobs programs for teens.”

Peter Boone and Simon Johnson diagnose the problems of the Irish economy and the implications for the global economy: “Ireland, simply put, appears insolvent under plausible scenarios with current policies. The idea that Ireland, Greece or Portugal can cut spending and grow out of overvalued exchange rates with still large budget deficits, while servicing all their debts and building more debt, is proving — not surprisingly — wrong. Such policies leave nations burdened with large debt overhangs that effectively tax businesses and borrowers — because interest rates must stay high to reflect risk. Investors must wonder whether businesses and homeowners can afford these higher interest rates, so banks and investors cut credit lines and reduce lending. This strangles economies, even when the fiscal authorities take tough steps needed to cut deficits.”

Slate’s Daniel Gross writes that the U.S. auto industry is smaller now, but healthier: “With Ford’s restructuring, and the bankruptcies of General Motors and Chrysler, the U.S. auto industry has shrunk and cut costs to the point at which it can make money on a smaller, more realistic number of sales. So far this year, auto sales have risen in spite of tighter credit, an absence of artificial government support and slack overall demand. They’re being spurred by the demand that arises naturally from people who need and want to replace cars—not by the demand that arises artificially when lenders, dealers, manufacturers, and the government offer bribes. In large measure, the activity in the car market is mimicking that of the overall economy, one in which retail sales are rising even as credit card use declines and savings increase. Of course, it’s possible that vehicle sales will fall off a cliff and help lead the U.S. economy back into recession. But the data suggest that the industry is in a pretty decent place, especially considering where it has been. It may be years before the electric car becomes popular, but in the meantime, gasoline-powered cars may have entered an era of sustainable consumption.”

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Reconsidering Iraq


WaPo’s Matt Miller admits to his Iraq mistake: “My fellow Americans: I’m a pundit, not a president, but since it’s a moment for taking stock of America’s role in Iraq, I want to remind you that I blew it. …I supported the war in 2003 because I thought Saddam Hussein had weapons of mass destruction. …Still, I’m torn. I can’t help thinking that, 100 years from now, America’s readiness to send its brave youth half a world away to topple a heinous dictator and then flush him out of a hole will be seen as noble. And not just about oil. For better or worse, I lack the moral clarity and strategic certainty of the war’s ardent supporters or foes. Instead, in retrospect, invading Iraq strikes me as a bad decision that the United States has had no choice but to make the best of. Our troops have performed remarkably. Whether they’ve been well served by their political leaders — or their political pundits — is another matter.”

Oil & Water in the Gulf


BP reports that the cost of the spill as hit $8 billion, WSJ: “Oil major BP PLC said Friday it has spent around $8 billion to date in response to the massive oil spill in the Gulf of Mexico and expects to resume its relief-well drilling shortly. The sum includes the cost of the spill response; containment; relief-well drilling; the “static kill” operation of providing mud and cementing; grants to the Gulf states; compensation claims paid; and federal costs. No new oil has flowed into the Gulf of Mexico from the Macondo well since July 15, the company said in a statement. BP said individuals and businesses had submitted more than 42,000 claims since the claims processing was transferred to the Gulf Coast Claims Facility on Aug. 23. They relate to compensation sought for damages resulting from an explosion in April on the Deepwater Horizon rig, which caused the U.S.’s largest offshore oil spill. BP has made 127,000 claims payments, totaling about $399 million so far.”

BP also says that limits on drilling are hampering oil spill payouts: “BP is warning Congress that if lawmakers pass legislation that bars the company from getting new offshore drilling permits, it may not have the money to pay for all the damages caused by its oil spill in the Gulf of Mexico. The company says a ban would also imperil the ambitious Gulf Coast restoration efforts that officials want the company to voluntarily support. BP executives insist that they have not backed away from their commitment to the White House to set aside $20 billion in an escrow fund over the next four years to pay damage claims and government penalties stemming from the April 20 explosion of the Deepwater Horizon drilling rig. The explosion killed 11 workers and spewed millions of barrels of oil into the gulf.”

BP has removed the the cap on the leaky remains of the Deepwater rig: “The Obama administration’s pointman on the Deepwater Horizon oil catastrophe Thursday evening announced that BP successfully removed a containment cap that had stopped crude oil from spewing into the Gulf of Mexico nearly two months ago and is expected to remove the well’s dysfuntional blowout preventer later Thursday. ‘Under the direction of the federal science team and U.S. government engineers, BP has completed the capping stack removal procedure _ an important step in the process to remove and preserve the damaged BOP,’ Retired Coast Guard Adm. Thad Allen said in statement, using the common abbreviation for the blowout preventer. ‘This procedure was undertaken in accordance with specific conditions I set forth in a directive authorizing the capping stack removal and BOP replacement last week. BP will continue to follow these required conditions for the BOP removal procedure, which is expected to commence this evening. I will continue to provide updates as necessary.’”

Another fire on an offshore oil rig in the Gulf may delay lifting the ban on drilling: “The fire on a Mariner Energy oil and gas platform in shallow waters of the U.S. Gulf on Thursday was a major setback for companies hoping for an early end to the government’s drilling moratorium and raised more questions about the safety of offshore drilling. ‘This explosion will make it less likely that the moratorium on offshore drilling will be lifted,’ said Rick Muller, senior analyst for Energy Security Analysis Inc in Boston. The United States is still reeling from the BP oil spill in the Gulf of Mexico. Interior Department officials declined to comment on whether the Mariner accident would prompt Interior Secretary Ken Salazar to consider expanding the current deepwater drilling moratorium to shallow waters. Such a action would be a blow to the oil industry, which has complained that the department has been too slow to approve permits for shallow water drilling since the Gulf oil spill. The Interior Department imposed a six-month halt on exploratory deepwater drilling in late May after an explosion on April 20 left a well spewing crude into the Gulf.”

Hazing Arizona


Newsweeks Eve Conant reports that the past 24 hours have been rough on Arizona politicians: “It started with Brewer, whose opening statement in last night’s debate with gubernatorial contenders, including Attorney General Terry Goddard, was painful to watch. Whether it was stage fright or just the result of a really bad day is hard to know, but Brewer, known for her brash statements, found herself struggling for words and appeared ill prepared. …Arizona’s other leading tough talker, Sheriff Joe Arpaio, is also out of his comfort zone, and this case—his ongoing dispute with the federal government—could be a lot more serious. He told reporters today that he just needed more time to comply with the feds, who are investigating allegations that his department discriminates against Hispanics. The Justice Department today said it was suing the sheriff for failing—for more than a year—to turn over records as part of that investigation.”

AZ Gov. Jan Brewer stumbled through her first debate: “Arizona Gov. Jan Brewer stumbled out of the gate during her opening statement in the first and potentially only debate in the state’s race for governor Wednesday night. Brewer, who has gained national notoriety for signing into law the country’s toughest provisions for illegal immigrants, awkwardly paused twice during the opening statement of the Clean Elections Debate broadcast on the state’s PBS affiliate. ‘I have … done so much and I just cannot believe that we have changed everything since I’ve become your governor in the last 600 days. Arizona has been brought back from its abyss,’ Brewer said, after appearing to lose her train of thought. Then, after saying, ‘We have cut the budget, we have balanced the budget and we are moving forward. We have done everything that we could possibly do,’ the governor paused for 10 seconds — an eternity in a live televised debate — before looking down at her notes. ‘We have … did what was right for Arizona. I will tell you that we have really did the best that anyone could do,’ she said, visibly flustered.

After her debate debacle, AZ Gov. Jan Brewer ran away from reporters questions about her bogus claims of beheaded bodies in the AZ desert: “Later, in an exchange about the economy, her opponent, Attorney General Terry Goddard, pointed out that Brewer’s fearmongering about violence in Arizona did not do great things for the state’s financial prospects. He then called on Brewer to recant her totally made-up claim that illegal immigrants were running around beheading people in the Arizona desert. Naturally, Brewer evaded the question. Afterwards some reporters had the gall to continue the line of questioning, asking Brewer if she still stood by her completely made up story. She was clearly too flustered to dissemble or lie, so she just ran away.”

More bad news for Brewer. News reports from Arizona say that her campaign has ties to private prisons housing illegal immigrants: “Gov. Jan Brewer’s campaign chairman and policy adviser is also a lobbyist for the largest private prison company in the country.

Chuck Coughlin is one of two people in the Brewer administration with ties to Corrections Corporation of America. The other administration member is communications director Paul Senseman, a former CCA lobbyist. His wife still lobbies for the company.

According to campaign finance records, CCA executives and employees contributed more than $1,000 to the governor’s re-election campaign. The company’s political action committee and its lobbyists contributed another $60,000 to Brewer’s top legislative priority, Proposition 100, a sales tax to help avoid budget cuts to education. Caroline Isaacs from the American Friends Service Committee, which advocates for social justice issues, said the money is evidence of influence the company has on the governor. …Corrections Corporation of America holds the contract with Immigration and Customs Enforcement to lock up illegal immigrants picked up in Arizona. Tough immigration laws such as Arizona’s SB 1070 could send thousands of new bodies its way, and millions of dollars.”

The Justice Department is suing Maricopa County Sherrif Joe Arpia over a bias investigation: “The Justice Department filed a lawsuit on Thursday against Sheriff Joe Arpaio of Maricopa County for not cooperating with an investigation into whether his department was systematically violating the rights of Hispanics. Obama administration officials called the suit the first time in 30 years that the federal government had to sue to compel a law enforcement agency to cooperate with an investigation concerning Title VI of the Civil Rights Act of 1964. …The Justice Department issued 51 requests for documents, most of which Sheriff Arpaio’s department ignored, as well as asking for tours of department facilities and interviews with commanders, staff members and inmates. Sheriff Arpaio, who has denied that he engages in racial profiling, has remained defiant of the government’s investigation. His lawyers have repeatedly refused to provide the documents sought by the Justice Department or provide unfettered access to its facilities.”

Politico’s Ben Smith says Arizona Governor’s debate performance is a poor reflection: “Arizona Governor Jan Brewer’s opening statement in last night’s debate reflects either an amazing lack of preparation, or sheer panic.”

Breakfast Sides


A new survey says employers are passing health care costs on to employees: “Score one for the nation’s employers. On average, the total cost of a family health insurance policy rose just 3 percent last year, to $13,770 in annual premiums, according to a survey of employer health benefits released on Thursday by the Kaiser Family Foundation, a nonprofit research group. (See updated article.) But the news was much better for employers than their workers, according to the survey, which is conducted yearly by Kaiser with the Health Research and Educational Trust, an organization affiliated with the American Hospital Association. Instead of sharing the pain, as they have generally done in the past, employers chose to keep their costs steady by passing the higher costs onto workers. As a result, the employee contribution toward family coverage rose an average of 14 percent, or almost $500, from what employees paid last year. Workers are now paying nearly $4,000 a year for a family policy, a jump of 47 percent since 2005. Wages have increased by just 18 percent during that time, according to Kaiser. It included a chart detailing the changes over the last five years.”

Michael Scott Moore ponders what it means to be liberal: “Social liberals in America have been tarred by economic liberals (“conservatives”) for being so illiberal about free markets, while true social conservatives resent them for being morally liberal on the one hand, or over-liberal with a tax dollar on the other. Economic liberals in Europe, meanwhile, rarely charge ahead on social justice, because by calling themselves “liberal” they don’t necessarily mean minorities should have equal rights. It’s the economic wing of liberalism that the last few years of financial trouble have bruised so badly. Free markets have gone out of style. (Never mind whether an opaque gambling market for complex derivatives with no real use to the public should be called “free,” if most participants can hardly grasp what they’re doing.) Europeans relate market liberalism to the “Anglo-Saxon” economic model. But that’s another term that slithers around what it means.”

John Dickerson wonders what the president will say to excite Democrats about this campaign season: “President Obama has been slowly turning up his political rhetoric for months. He’s made broad attacks on Republicans and taken specific shots at people like Senate Minority Leader Mitch McConnell. He hasn’t turned the dial up to 11 though—yet. Before his vacation, he warned Republicans he’s going to start. ‘They’ve forgotten I know how to politick pretty good,’ he said before leaving for vacation. He’s likely to start Monday in Milwaukee, Wisc., at a Labor Day rally. What will the new pitch sound like? Will Obama and his aides fully let go of worries about damaging his post-partisan brand? More important, will the president be effective at rallying Democrats to the polls with more partisan rhetoric? Obama clearly enjoys giving a political speech, but his circumstances have changed since he last gave so many good ones. During the 2008 campaign, he was derided as all pretty words and no substance. Now he faces the opposite problem: He’s pushed and passed a heap of big, fibrous legislation but gets criticism (sometimes from himself) for not being very good at communicating.”

The EPA will issue more rules on greenhouse gas emissions: “The U.S. Environmental Protection Agency will roll out more regulations on greenhouse gases and other pollution to help fight climate change, but they will not be as strong as action by Congress, a senior administration official said. The agency ‘has a huge role to play in continuing the work to move from where we are now to lower carbon emissions’, said the official, who did not want to be identified as the EPA policies are still being formed. President Barack Obama, looking to take the lead in global talks on greenhouse gas emissions, has long warned that the EPA would take steps to regulate emissions if Congress failed to pass a climate bill. The Senate has all but ruled out moving on greenhouse gases this year, even though the House of Representatives passed a bill last year. In late July, Senate Majority Leader Harry Reid stripped climate provisions out of an energy bill, saying he could not get one Republican vote for them.”

Terrance Heath is the Online Producer at Campaign for America’s Future. Prior to his current position he worked as a Blogging and Social Media Consultant for a number of organizations and agencies, as an outgrowth of his work as Blogmaster for EchoDitto, Inc. He stumbled into blogging and social media after starting his own blog, The Republic of T., but cut his teeth as an activist working on LGBT equality and HIV/AIDS issues. In that capacity he worked for the Human Rights Campaign and the National Minority AIDS Council. Terrance has kindly allowed Evans Liberal Politics to publish his works on an ongoing basis. He sums himself up: Black. Gay. Father. Vegetarian. Buddhist. Liberal.

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Posted on September 3, 2010 by , 16 comments

Simpson Social Security Comments Highlight Battle of Democracy vs. Plutocracy

Evans Liberal Politics
August 26, 2010

 

Simpson Social Security Comments
Highlight Battle of Democracy vs. Plutocracy

 

Simpson Social Security Comments Highlight Battle of Democracy vs. Plutocracy, Campaign for America’s Future, August 26, 2010, by Dave Johnson, used with permission, quoted verbatim:

Former Wyoming Republican Senator Alan Simpson is co-chair of President Obama’s Fiscal Commission. This is what he said the other day about the relationship between the American people and our government:

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“We’ve reached a point now where it’s like a milk cow with 310 million tits!”

This country that was once run by We, the People with government “of the people, by the people and for the people” has become instead a country where the ruling elites can talk about the public as babies, the unemployed as parasites who are jobless because they are “lazy.” The prevailing attitude about the public, from the new Versailles that has grown up around Washington, DC — what bloggers call “the village” seems to be if you feed them they will breed.

Look at the weird situation we are in today. The wealthy are wealthier than ever. The gap between the rich and the rest of us is bigger than ever. Big corporate profits are soaring and the too-big-to-fail multinational corporations have more power than ever. At the same time wages that were stagnant for decades are now dropping, people with jobs are working longer and harder, more of our people are unemployed and unemployed for longer, more without health insurance, more are depending on food stamps for basic nutrition, more are losing their homes than ever with bankruptcies soaring, and small businesses are barely hanging on or are going under at an alarming rate.

But what are our political leaders up to? On the one hand, the deficit commission is focused on cutting Social Security (which does not contribute to the deficit or debt) at a time when more people need it and need it more than ever. On the other hand many in the Congress are looking for ways to extend the deficit-causing Bush tax cuts for the wealthiest 2%.

And few are talking about our government hiring or helping the unemployed, stimulating the economy, or holding the bad actors who caused this mess accountable. In fact, far from talking about helping our fellow citizens, our ruling DC elites have a different view of things entirely. We, the People are just in the way. It is our own tit-sucking fault, they say, and we need to step up and sacrifice because we are not doing enough to help the people who really deserve it: the producers, the “job creators.”Did you catch the rhetorical trick I used above? I said “our” people, and “our” government. How quaint. You don’t hear that kind of talk much anymore. Instead you hear about “personal responsibility,” which makes everything that is done to someone by the wealthy and powerful their own fault.

This Is About Democracy vs. Corporatist Plutocracy


These battles over cutting Social Security and extending tax cuts for the wealthy expose the competing worldviews of We, the People democracy vs corporatist plutocracy. Is our country a community of the people, by the people and for the people? Or are we “the help,” only here for the benefit of the wealthy few.

In the democracy worldview we are a community that takes care of and watches out for each other. We are each citizens with equal rights and equal value, to be respected equally. Our government and economy are supposed to be for us. In the democracy worldview we should be increasing Social Security’s benefits because people really need it.

In the plutocratic worldview held by conservatives and corporatist moderates we are “the help,” 310 million loafers (“parasites” is the Randian word) sucking their ” unearned sustenance” (more Rand) from the tits of the milk cow when we all ought to be working harder because the portfolios of the “achievers” (and more) are down a bit. Your value to society is only what you “produce.” Your role otherwise is to “consume.” In that worldview the wealthy deserve tax cuts and the parasites shouldn’t be getting Social Security checks at all.

So what is it going to be? Will we see and understand ourselves as citizens, who share this country on an equal basis with the rich and the poor, with rights and entitlements, deserving dignity, respect, protection and empowerment from a government that is of, be and for We, the People? Will we demand those things and fight for them? Or will we quietly yield those hard-won rights to our “betters” and allow ourselves to be told what to do, fleeced by giant corporations, hoping to get a flat-screen TV out of the deal if we behave?

See Social Security: Alan Simpson offends almost everyone with ‘cow’ quip, Christian Science Monitor, The Vote blog, August 25, 2010, by Brad Knickerbocker.

See Fire Alan Simpson, The New York Times, Conscience of a Liberal, August 25, 2010, by Paul Krugman, excerpt quoted verbatim:

I always thought that the deficit commission was a bad idea; it has only looked worse over time, as the buzz is that Democrats are caving in to Republicans, leaning ever further toward an all-cuts, no taxes solution, including a sharp rise in the retirement age.

I’ve also had my eye on Alan Simpson, the supposedly grown-up Republican co-chair, who has been talking nonsense about Social Security from the get-go.

At this point, though, Obama is on the spot: he has to fire Simpson, or turn the whole thing into a combination of farce and tragedy — the farce being the nature of the co-chair, the tragedy being that Democrats are so afraid of Republicans that nothing, absolutely nothing, will get them sanctioned.

When you have a commission dedicated to the common good, and the co-chair dismisses Social Security as a “milk cow with 310 million tits,” you either have to get rid of him or admit that you’re completely, um, cowed by the right wing, that IOKIYAR rules completely.

See Alan Simpson’s Apology: Gracious … and Not Enough, Campaign for America’s Future, August 25, 2010, Richard (RJ) Eskow.

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George Carlin: The American Dream

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in the spirit of class warfare, George Carlin delievers a scathing skit about Homelessness in America and America's favorite pastime for rich people, golf "On Homelessness and Golf:" In the spirit of class warfare, George Carlin delivers a scathing routine about homelessness and America’s favorite pastime for rich people, golf. — 5:42

George Carlin performs a scathing and effective monologue on why the American education system will stay broken "The American Dream": (This is a repeat due to popular demand.) George Carlin performs a brilliant and scathing monologue on our serfdom which may be his very best short effort. — 3:15. Scary stuff.

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Posted on August 26, 2010 by , 16 comments

Robert Rubin Is Still Wrong And Joseph Stiglitz Is Still Right

Evans Liberal Politics
August 11, 2010

 

Robert Rubin Is Still Wrong
And Joseph Stiglitz Is Still Right

 

Robert Rubin Is Still Wrong And Joseph Stiglitz Is Still Right, Campaign for America’s Future, August 11, 2010, by Zach Carter, used with permission, quoted verbatim:

Robert Rubin and Joseph Stiglitz are going public on jobs and the deficit, in what looks very much like a re-run of a major policy debate during the Clinton era. The dispute is simple—should the government focus on putting people back to work, or should it try to cut the deficit? Stiglitz wants to see more jobs, Rubin wants to shrink the deficit. Policymakers should listen to Stiglitz.

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Rubin is the Democratic Party’s Alan Greenspan. In the 1990s, he was heralded as a genius for making policy calls that ultimately wrecked the economy. Rubin pushed for deficit reduction instead of a jobs policy in the Clinton years, and was the driving force in the Clinton administration’s devastating moves to deregulate Wall Street. For several years, Rubin’s policies looked good. Despite the focus on the deficit instead of jobs, the Clinton years saw a huge boom in employment. Wall Street profits were through the roof, and the economy was roaring.

But at the end of Clinton’s second term, it was clear that all of these good times had been fueled not by sound economic policy, but by a reckless and unsustainable Wall Street bubble. Banks were backing every dot-com business plan brought their way, and when everybody figured out that Pets.com was not going to be the next Home Depot, things fell apart. The economy slipped into a mild recession, which would have been devastating had policymakers not inflated a housing bubble to “rescue” the economy from the dot-com fallout.

Rubin was Clinton’s Treasury Secretary, while Stiglitz served as Chair of Clinton’s Council of Economic Advisors. Stiglitz fought all of Rubin’s wrong-headed policies, but ultimately lost. Stiglitz was able to fend off some of the most outrageous financial deregulation, but when he left office, Rubin pounced and pushed through the repeal of Glass-Steagall, a Depression-era law that prevented banks from gambling in the capital markets casinos with taxpayer money. Facilitating that banking excess was a key cause of the 2008 financial collapse, and it was Robert Rubin’s brainchild.

So why should anybody take Robert Rubin’s advice on economic policy? On virtually every important decision during the Clinton years, Rubin got it wrong, and getting it wrong put the global economy on a path to destruction.

Well, here we go again, only this time, conditions are worse. Instead of unemployment hovering around 8 percent, it’s near 10 percent, and nobody sees any sign of it abating significantly over the next year. Once again, instead of promoting a jobs agenda, Rubin wants to focus on the deficit. It’s an instinct shared by most of Rubin’s Wall Street colleagues (Rubin is a former co-Chairman of Goldman Sachs, and served on Citigroup’s board in the years leading up to Citi’s monstrous bailout). The same banker buddies who wrecked the economy and forced the government to spend trillions rescuing the banking sector.

By contrast, the deficit looks pretty good. Deficits are only an immediate problem when investors are worried about default or inflation, and demand a very high interest rate to compensate them for this risk. So if the deficit were a big deal right now, we’d see high interest rates on U.S. Treasury bonds. But we don’t see that at all. Yesterday, the rate on the 10-year bond fell to 2.77 percent. During George H.W. Bush’s presidency, the rate routinely eclipsed 9 percent.

But mainstream news anchors are giving Rubin a platform to spew Wall Street buzzwords in order to gin up support for a deficit reduction program. Fareed Zakaria interviewed Rubin on his CNN show this weekend, where Rubin had this to say:

I wouldn’t do a major second stimulus because I think…we run a risk that it could be counterproductive in creating a lot of additional uncertainty and undermining confidence.

“Confidence” here means “investor confidence in the ability of the United States to pay off its debts.” This is empty spin language. Investor confidence is measured by interest rates. Investors are currently signaling that they have more confidence in the United States’ fiscal rectitude than they have had in decades. Borrowing money for new stimulus would not be punished by the market, and the cost of borrowing that money is at its lowest to the Treasury in decades.

If we don’t spend money to create jobs, the private sector isn’t going to be able to take care of it on its own. Businesses aren’t hiring because there is no demand for their products. Put another way, since everybody is broke and out of a job, nobody can afford to buy things, which means businesses have no customers. Without any customers, businesses have no reason to hire people.

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So in the near-term, jobs and deficit reduction are in direct conflict. If you go after the deficit, you are going to hammer the unemployment rate. What’s more, recent efforts by countries to cut their deficits by reducing spending have actually been counterproductive. Ireland slashed social programs, only to see its deficit increase, because the spending cuts hurt economic growth so much that the government’s tax revenues declined dramatically.

Rubin wants to implement a deficit reduction plan now that would take effect in two years. Long-term deficit reduction isn’t a terrible idea, economically. The biggest threat to U.S. fiscal stability over the next several decades is the increasing cost of health care, which drives up Medicare expenses. While it’s not an immediate necessity, a program designed to bring down the cost of health care over the next couple of decades would in fact be a good idea (Contrary to Republican attacks, President Barack Obama’s health care bill actually does cut health care costs and will reduce the deficit over the long-term. Nevertheless, more could be done.).

The trouble is, there is very little evidence right now that the economy is going to be okay in two years, and Medicare isn’t going to bankrupt the government in two years. Cutting spending while the economy is still weak means hurting jobs and slowing growth. Even the Federal Reserve is clearly worried about the prospect of a double-dip recession, which is why it embarked on a new program yesterday to lower interest rates further in order to make borrowing money cheaper for American citizens and businesses.

Stiglitz sees things differently. If we want a healthy economy, we have to have financially healthy households. That means getting people back to work, and it means spending serious money to create those jobs. He was right in the 1990s. He’s right today.

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Posted on August 11, 2010 by , 1 comment

America Still Needs Elizabeth Warren, And The Bank Lobby Is Still Lying About Her

Evans Liberal Politics
August 9, 2010

 

America Still Needs Elizabeth Warren
And The Bank Lobby Is Still Lying About Her

 

America Still Needs Elizabeth Warren, And The Bank Lobby Is Still Lying About Her, Campaign for America’s Future, August 7, 2010, by Zach Carter, used with permission, quoted verbatim:

Of all the accomplishments Elizabeth Warren has amassed during her lifetime, one of the most impressive is also one of the least well-known to the general public. Warren was a co-founder of Credit Slips, a very technical, influential blog on banking and bankruptcy. She hasn’t blogged there since taking up her post as Chair of the Congressional Oversight Panel for the Troubled Asset Relief Program, but a review of her posts reveals a set of truths that Warren’s opponents in the bank lobby do not want to acknowledge. While Wall Street bankers like to smear Warren as an ideologically driven crusader, Warren’s blogging reveals her to be the exact opposite: a serious student of economic evidence, eager to embrace good ideas from any source.

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Take a look at this post from September 2008, in which she praised economists Greg Mankiw and Ken Rogoff. Both of these economists are, let’s say, unpopular among liberals. Mankiw was chair of President George W. Bush’s council of economic advisors, and Rogoff is an alum of the International Monetary Fund, where he pushed draconian cuts in social programs in developing nations in the name of balanced budgets.

But it turns out that both Mankiw and Rogoff had something interesting to say at a forum back in September 2008. And what did Elizabeth Warren have to say about it? She calls them “interesting,” “terrific,” “calm,” and “funny.” She doesn’t blast them for their backgrounds with institutions that are generally reviled by progressives, she just emphasizes that they’re serious thinkers who are making good points about the role the bank bailout played in the economy:

Greg’s work with the current administration and Ken’s background with the IMF and on the Board of the Federal Reserve add a certain credibility to their assessments of conditions on Wall Street. If they are right, the $700 bailout is saving some investment bankers’ jobs in the short term, but overall it is just making the financial system worse.

Aside from seeking out common ground with aggressive conservatives, Warren also displays a deep-rooted intellectual curiosity throughout her blog postings. One of the most obnoxious bank-lobby smears against Warren is that she doesn’t fully appreciate the benefits of financial innovation, and that she’ll cut off useful credit to poor people by pushing overzealous consumer protection. Even some otherwise respectable bloggers have taken up the chant, without really bothering to investigate whether there’s any shred of truth to it. Even a casual browsing of Warren’s blog work reveals this to be a silly charge.

In a post from May 2008, she details a Wells Fargo customer who was quite clearly ripped off by her bank. Warren provides a very cautious analysis of the situation. While Wells Fargo’s actions were an obvious disgrace to the bank itself and the regulatory regime, the appropriate response is not obvious. Maybe the kind of product Wells Fargo was selling should be banned outright. Maybe it should only be provided with more rigorous disclosures. Maybe consumers should have to ask for the product before bankers are allowed to discuss it. The point is, Warren isn’t eager to claim that an obviously abusive product should simply be banned—she wants to make sure that policymakers don’t unnecessarily cut off credit to well-informed adults who want it.

Again and again, Warren reveals herself to be a devout student of data in her blog work. It isn’t sexy, it sure as hell doesn’t traffic in the broader blogosphere, but it’s the mark of someone who truly cares about getting it right, rather than merely developing a set of popular talking points. Warren clearly loves reading economic papers on the effects of various credit policies, and determining their effects on both individuals and society at large. That’s exactly what we need from a bank regulator, especially at the Consumer Financial Protection Bureau.

You can find all of Warren’s Credit Slips blogs here. I’ll be highlighting more of her blogging in future pieces, but it’s clear from these posts alone that she is not an ideological crusader. This fact, in truth, is why the bank lobby so fervently opposes putting her in a position of regulatory authority. For decades, all of our bank regulators have been driven by ideological agendas. They’ve aggressively pursued any policy that creates short-term profits for Wall Street, under the view that anything that generates money for Wall Street is expanding credit in society and furthering productive economic growth. President George W. Bush even appointed a bank lobbyist to the top regulatory post in the nation. The results of this plan were disastrous, as everyone living through the current recession can attest.

Of course, there is an alternative to appointing regulators who will always put bankers and brokers first. We need a rigorous scholar who cares about finding the right policies to elevate the middle class and further healthy economic growth. We need Elizabeth Warren.

Zach Carter lives in Washington, D.C. He is a Fellow a Campaign for America’s Future and Economics Editor for AlterNet. His work has appeared in The Nation, Mother Jones, The American Prospect and Salon.

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