Tuesday, August 28, 2012

Austerity Vs Prosperity-- In Congressional Race After Congressional Race, That's The #1 Question

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Normally on Tuesdays we introduce a new Blue America candidate. But this week we're concentrating on the responses our candidates have to Austerity. In short, the response is... Prosperity. Like I said yesterday, Jacob Hacker and Nate Loewentheil have put into words-- and numbers-- the premise upon which progressives have been battling the Ryan Budget, the Wall Street Agenda and any moves towards a Grand Bargain that takes from the working and middle class to further enrich the already too wealthy. If you want to get into Hacker's and Loewentheil's details, which I encourage you to do, here are 60 glorious pages. Alan Grayson summed it up-- at least in part-- pretty well in the 30 second campaign ad above. He's running against a typical Republican clone who wants to turn Social Security over to Wall Street. That's a key to the Austerity Agenda and Grayson wants to make sure voters in FL-09 know all about it. Yesterday Grayson explained one of the reasons Prosperity Economics is so important right now:
The Seinfeld show, which TV Guide named the greatest TV show of all time (seriously), often was described as a show about nothing. We are in danger of the 2012 Election becoming an election about nothing. When a nation is facing the kind of problems that we are facing, then Barack Obama’s birth certificate, his religious beliefs, Mitt Romney’s gaffes, his personal deductions, and even Todd Akin’s understanding of female anatomy all are the moral equivalent of nothing. This coming election is too important to be about nothing. And that is why Nate Loewentheil’s “Prosperity Economics” platform is important-- it’s not nothing, it’s something. Something big. For a Democratic victory to be meaningful, for it to create a “mandate,” we owe it to America to explain what we would do with that victory. We need to make some promises, and then do our darnedest to try to keep them. “Prosperity Economics” is a coherent, comprehensive plan that offers the hope-- the essential hope-- of leading us out of the wilderness.

Although every Democrat on our Americans for REAL Prosperity page is running against a Republican who wants to privatize Social Security and abolish Medicare, few of them are stupid enough to say it into a microphone the way Todd Long, Grayson's hapless opponent did (several times). But all of these Democrats are using the issues that make up Prosperity Economics as part of the foundation of their campaigns. In yesterday's post we saw Jay Chen's and David Gill's pushback against Austerity in California and Illinois.

Every candidate on our growing list approachs the Austerity vs Prosperity battle from their own unique perspective. Aryanna Strader is running against anti-Choice fanatic Joe Pitts in a newly blue-leaning Pennsylvania district (16th CD) and she looks at the dichotomy in light of her own experiences:
As a small business owner, mother, and Iraq War veteran, I stand behind the foundations of prosperity economics presented by Dr. Hacker and Mr. Loewentheil. Like every aspiring entrepreneur, it comes as no surprise that our goals are to expand our business. Investing in America's growth through infrastructure not only creates jobs but drives private business to make investments of their own. Empowering young people who want to pursue higher education only makes us a greater, more competitive nation. Ensuring that people like my mother are secure in their retirement is a necessity. My mother worked hard her entire life as a waitress and her only form of retirement is Social Security. Had Medicare been turned into a voucher program, my mother would not have been able to receive a life-saving operation. We must do all we can to protect Medicare and ensure that those in future generation will have access to the health care they need. I served our Country and defended Democracy. Additionally I fought to protect and foster the right to vote of every U.S. citizen in order for their voice to be heard. We must remove barriers that infringe upon this right so that we can hold our elected officials accountable. The middle-class; the poor have been punched in the gut for far too long. Our American worker has always risen to the occasion throughout history. We in turn must support ideas that restore and provide them the ability to flourish. It is common sense in my opinion that we cannot have prosperity for all unless we justly and fairly provide the opportunity for all to prosper.

Syed Taj-- also running in a blue-leaning district (MI-11 in the Detroit suburbs)-- is an immigrant from India who has been a doctor for decades and teh first Democrat in his township to win elective office in many years. His whole reason for running for Congress is tied up in the bedrock of Prosperity Economics... and has been even before Hacker tied it together and put a name on it.
Prosperity Economics is the kind of powerful, intellectual force we need to rebuild our middle class, grow our economy, and recreate the equitable society that accomplished so much throughout our nation’s history. These are common sense solutions for sustainable public policy. We need leaders in Congress to invest in our middle class and Hacker and Loewntheil have shown the way. As a physician and small business owner, I stand behind this plan to rebuild our economic foundation because we cannot keep believing that prosperity for some must come at the expense of others.

The resistance to economic stimulus, environmental regulation, social safety nets, and progressive taxation has persisted for generations. “The test of our progress is not whether we add more to the abundance of those who have much,” President Roosevelt said, “it is whether we provide enough for those who have little.” These ideals have upheld the test of time. The great feats we’ve accomplished have shown just how effective government can be when we invest in our future and protect the middle class. Economists have proven hazardous effects of austerity, market failures, and income inequality on our society. Austerity has had its day, but from the Great Depression to the Great Recession, it has failed to produce the prosperity its champions have promised. Prosperity Economics gives us a way forward.

The newest candidate to come aboard is Ann Kuster, who's running against New Hampshire corporate shill and Austerity fanatic Charlie Bass. Ann, who's currently ahead in the polling, told us "At hundreds of house parties across New Hampshire's Second Congressional District, I've heard the same thing: the middle class is hurting and they don't feel like they have a voice in Congress. I am running for Congress to be a voice for middle class families in New Hampshire. We can create jobs and turn this economy around so we can have Prosperity once again. How do we do it? Education is how we grew an economy this strong in the first place, and it's where we need to start again. Innovation has been a powerful competitive advantage for America, and we can’t afford to lose our edge. And Rejuvenation-- of our bridges and roads, cities and towns, and highways and broadband communications-- that's the key to a country that is built to win the future. We can make smart cuts, eliminate wasteful spending, and streamline regulation, but I agree with the principles of Prosperity Economics-- that we can't just cut our way to a stronger tomorrow. We need to make smart investments in our future. The time for political arguments and excuses is over. Doing nothing isn’t working. Let’s rebuild our country and win the future, again."

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2 Comments:

At 6:03 PM, Blogger Dan Lynch said...

NO NO NO NO NO NO NO NO NO NO

Jake Hacker is NOT an economist !!!

Nate Loewentheil is NOT an economist !!!

Yale is the furthest thing from a progressive university !!!

Their ideas are all NEOLIBERAL, not progressive !!!

They consulted with the Pete Peterson-funded Economic Policy Institute. So Howie is now a shill for Pete Peterson ? WTF Howie ???

The acknowledgments page of their report does not mention a single post-Keynesian economist.

While the authors seem to have some good intentions with regards to sociology and political science, their COMPLETE IGNORANCE of post-Keynesian economics dooms them to fail.

Nor is there any need for Hacker to come up with an economic plan since post-Keynesian economists have already offered plans galore.

Examples of the authors' incompetence, as I read their report:

"of course, these investments require tax revenues"

No, Federal spending does not require tax revenues !!! This is one of the basic distinctions between NEOLIBERAL economic theory -- as taught at Yale -- vs. post-Keynesian economic theory, as taught by PROGRESSIVE economists.

"we need to lay the foundations for shared prosperity by putting the government on sound fiscal footing."

Another NEOLIBERAL myth. There is no such thing as an "unsound" fiscal footing for a monetarily sovereign government such as the US. The US can pay ANY bill regardless of tax revenues. A US Treasury check will never bounce, because the Treasury pays bills simply by marking up accounts with a keyboard. The authors do not understand this, and it matters. A lot.

"Joseph Gagnon, a former Federal Reserve official now at the Peterson Institute for Interna-
tional Economics . . ."

There's Pete Peterson again !!! HELLO, anyone associated with Pete Peterson should not be trusted by a progressive !!!

"the Fed should use the monetary rescue measures as its disposal ... This would mean first and
foremost targeting a moderately higher inflation rate"

NEOLIBERALS believe that the Fed controls inflation, post-Keynesians understand that the Fed merely controls interest rates -- which are already at rock bottom. Once again, Hacker's ignorance of economics dooms him to fail !!!

"setting the minimum wage at half what a typical worker earns"

The median wage is currently $16.57 -- that includes managers, doctors, everybody, so you could argue that $16.57 is higher than "typical." Nonetheless, according to Hacker's suggestion, the minimum wage should be $8.28, only slightly more than the existing minimum. Meanwhile, in Australia, their minimum wage is over $16 USD. I'm not impressed with Hacker's lame suggestion.

"putting a price on carbon emissions."

The carbon tax is a NEOLIBERAL idea. Like all consumption taxes, it would be regressive. By contrast, the New Deal way to address carbon emissions would be to regulate it, and to nationalize the production of clean energy.

"the policies proposed here shows that they would lead to sustain-
able deficit levels within five years"

Another NEOLIBERAL myth. There is no such thing as an unsustainable deficit for a monetarily sovereign country. And there is good reason to believe that deficits need to be higher, not lower.

"Create an infrastructure bank. ... with a small portion of new federal infrastructure spending invested alongside private capi-
tal."

Another NEOLIBERAL idea. Use public money and the public guarantee to fund private, for-profit projects like toll roads, so the rich can get richer at public expense. Real progressives believe the public purse should be used for public purpose.

"Clarify the Federal Reserve’s mandate to prioritize full employment"

NEOLIBERALS -- like Milt Friedman -- believe that the economy is controlled primarily by monetary policy. Post-Keynesians disagree. As I said before, the Fed controls only interest rates, not inflation, and not unemployment.

(continued)

 
At 6:04 PM, Blogger Dan Lynch said...

... continuing my critique of Hacker's NEOLIBERAL proposals:

"The Fed has other powerful tools at its disposal"

NEOLIBERALS believe in the "confidence fairy," post-Keynesians do not.

"increasing federal student loan support"

NEOLIBERALS like student loans. New Deal progressives believe that education is a right and should be provided by free public education.nominal cost.

"Manage future immigration flows based on principles of family reunification and economic
demands."

NEOLIBERALS love immigration because it supplies corporations and agribusiness with cheap labor. Progressives believe in protecting American labor from unfair competition (part of FDR's proposed 2nd Bill of Rights, remember ?)

"Strengthen Medicare by controlling its spending"

NEOLIBERALS believe that Medicare spending is a problem. But the Federal government can pay ANY BILL. There may be other valid reasons to modify Medicare -- for example, to stop subsidizing the profits of pharmaceutical corporations -- but the cost to the government is not one of them.

"Strengthen Social Security by substantially raising or completely eliminating the cap on earnings"

Raising the cap makes FICA less regressive, but regressive nonetheless. No real progressive supports regressive taxation. Most post-Keynesian economists advocate eliminating FICA altogether.

Hacker has no proposal to lower the retirement age or to increase SS benefits to a level that you can actually live on.

"Employers and workers would be required to put aside a share of pay in earmarked accounts"

Another NEOLIBERAL idea that would drain money out of the economy and make American manufacturing even less cost-competitive. Progressives believe in raising SS benefits so that nobody needs additional retirement accounts to live comfortably.

"Create a new consolidated option for tax-favored private retirement savings"

Another NEOLIBERAL idea. Increased retirement savings would reduce aggregate demand, and require the deficit be that much bigger to compensate for the reduced private sector demand. Progressive advocate increasing SS benefits so than nobody needs these private retirement plans.

"Bring the effective corporate tax rate in line with the effective rates of our main competitors"

Based on the NEOLIBERAL assumption that the government requires tax revenue or else the sky will fall. Corporate taxes are passed onto consumers, so corporate taxes are effictively a regressive consumption tax. Solution: eliminate corporate taxes. Instead, institute a progressive national property tax, as advocated by PROGRESSIVE economist Michael Hudson.

In sum, Hacker's economic proposals are just a variation on the same old failed NEOLIBERAL policies that the Democratic party has been peddling since 1976. No REAL PROGRESSIVE would support it.

The CPC needs to change its name to "Congressional NEOLIBERAL Caucus" and Blue America needs to change its name to "NEOLIBERAL America."

Or how about "Congressional Pete Peterson Caucus" and "Pete Peterson's America" ???

But if you do decide to become a REAL PROGRESSIVE on economic issues, check out post-Keynesian economics, like Steve Keen, Warren Mosler, or Stephanie Kelton, just to name a few. In the US, you'll find progressive economics taught at the University of Missouri at Kansas City, NOT at Yale !!!

I've donated several hundred dollars to Blue America candidates this election cycle, but they won't get another penny out of me. I want nothing to do with your Pete Peterson brand of economic policies.

 

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