"Budget Battle Royale": Tom Tomorrow offers a quick refresher course in "negotiation" Barack Obama-style

Tom T settles in at DailyKos

Budget Battle Royale
by TOM TOMORROW

[Don't forget to click the enlarge.]

"Obama frequently points with pride to the role that smaller donors played in his 2008 election, when his campaign also openly discouraged spending by outside organizations. But now Obama finds himself seeking out the kind of big-money donations he has often criticized while encouraging independent groups to raise and spend unlimited money on his behalf."

-- Dan Eggen and Perry Bacon Jr., "Obama reelection campaign
expected to tap big-money donors," in the Washington Post

by Ken

Since Howie has been keep a close watch on the New Republican Majority's bold new, er, policy initiatives at both the federal and the state level, I haven't felt any need to jump in -- or much stomach for talking about these people, who I believe are truly evil (admittedly of several quite different species, but all evil, whether it's the evil of ideological superwackitude or of economic predation, to pick just two of the riper varieties) and are not acting in good faith, and are beyond the reach of reason. In fact, to treat them as if they were sentient beings capable of reason is to fall into their grossest trap. Since there's no possibility of even holding your own under those conditions, you're defeated -- no, routed -- before you begin.

As we've pointed out a number of times, in 2008 candidate Barack Obama had a rare opportunity to bring at least some of the country back into the land of the living, the sane, the functional. With the shambles created by eight years of the economic rape and pillage that passes for "conservative" governance all around us, including the worldwide shambles created by the right-wing slash-and-burn approach to international relations, we had a teachable moment in which a candidate with good communication skills could have undertaken to make sure Americans understood what had happened and why.

For whatever reason, he chose not to. Some said he was persuaded by polls that showed voters were turned off by "divisiveness." Some thought he believed that strongly in forging "consensus." Some, who understood earlier than the rest of us just how conservative he himself is, argued that there really wasn't a deep philosophical divide between him and the failed policies of the Bush regime -- a view that has come to seem more and more plausible since candidate Obama became President Obama. Some of these same people pointed out (and this is an expansion of, rather than an alternative to, this last view) that neither candidate nor President Obama was likely disposed to go on the warpath against the economic elites who are in fact his most important benefactors. At the risk of belaboring the obvious, "importance" in this connection is defined by $$$$$. Come to think of it, these days importance in most connections is defined by $$$$$. (I swear I had written most of this post before I even saw the Washington Post piece from which I've quoted above. We'll come back to it in a moment.)

What has especially horrified a lot of us is the "negotiating" style highlighted above by Tom Tomorrow in his maiden DailyKos "This Modern World" strip), which has become an Obama administration trademark, apparently under the enforcement of, first, former chief of staff "Master Rahm" Emanuel and now of the Master's successor, "Monster Jim" Messina, who has since left the administration to prepare for the just-announced rollout of the Obama reelection campaign. (Is it necessary to point out that the president used Messina's switch from the government to the campaign to double down on Big Corporate sludge, by turning the COS job over to total corporate whore Bill Daley, who scarcely pretends to be anything but the chief government lobbyist for the corporate elites and Big Money?)

If you haven' yet read Ari Berman's Nation exposé of "Monster Jim" ("Jim Messina, Obama's Enforcer"), and you want to get a glimpse of how government by the elites and for the elites actually works (as I mention occasionally, I'm a "nuts 'n' bolts" kind of guy -- I like to see how this stuff is actually done), and if you've got a really strong stomach, you need to read the piece. It's true that we were already hearing that Monster Jim was at least as bad as Master Rahm, if not worse, when he was still the Master's deputy, and so there's not much in Ari's piece that's likely to be really surprising, unless you count the jaw-dropping flagrantness and shamelessness of the pandering. Still, that doesn't make any of it any less shocking or appalling.

A close second to the administration's appalling concept of political negotiating is its stunning ineptitude with regard to political messaging. Has there ever been an administration that occasioned more regular use of the phrases "tin ear" and "tone deaf"? The White House has been turned over so overwhelmingly to servants of the corporate elite that nobody on the inside in any position of authority seems to have the slightest inkling how its actions and rhetoric "play" to less privileged Americans.

A telling bit from Ari Berman's piece:

After the 2010 election, Messina spoke at the winter meeting of the Democracy Alliance, a group of wealthy progressive funders. He gave two PowerPoint presentations, including one on the administration’s accomplishments -- the stimulus, the Lilly Ledbetter Fair Pay Act, healthcare and financial reform. The other was on what was still to come -- immigration reform, the START treaty, repealing DADT. “Jim, you’re missing a word,” one donor told him during the Q&A.

“What word?” Messina responded.

“The word ‘jobs,’” the donor said.

Given the all-consuming tone-deafness of the people the president listens to, it's hardly surprising that they decided to make him the first declared presidential candidate. If the Republican messaging generals don't have a field day with this, they should be ashamed. Or maybe they don't have to. The appearance is just that awful.

The clear explanation is that the campaign people (read: Monster Jim & Co.) want to get started ASAP on raising that billion dollars we're hearing is the campaign's target. And on the one hand, the emphasis on Big Money is understandable given the reality of American Politics in the Year 2012, now that the Right, abetted by the right-wing hoodlums of the constitution-fucking Supreme Court Campaign for the Involuntary Servitude for the Masses of Unwashed Americans (SCCISMUA), "Smirking John" Roberts, honorary chairman. It seems only too likely that the ghastly Citizens United decision is only a down payment on what the SCCISMUA is prepared to do to ensure that the primary consideration in governing the country will be who's prepared to spend the most to get its way.

On the other hand, a campaign that's only about the money the candidates can raise comes pretty darned close to a reasonable person's worst nightmare.

Now we already knew that the 2012 Obama campaign was going to be radically different from the 2008 one. After all, the Obama inner circle began disowning all elements of the original grass-roots strategy as soon as the Democratic nomination was won, and finished the job as soon as the election was won. While there may well have been people involved in the campaign who envisaged a bottom-up undertaking, it now seems clear that they were dupes as much as the poor saps who were swept up by the aura of the campaign and though it in some measure belonged to them. It didn't, and there won't be any illusion that the 2012 campaign does.

Essentially, as the Obama people dismantled the Democratic Party apparatus and all but forbade any Democratic-brand political operation independent of its own, it became clear that the Obama brain trust didn't want a single dollar being expended anywhere in the country in any way benefiting either Democratic candidates or Democratic positions unless that money was channeled through its political apparatus.

Of course it was fundamentally anti-democratic. Surely there's never been any question about that. The larger point is that it was spectacularly crappy politics. Forget for a moment, for example, how much energy and thuggery the administration devoted to making sure that any health care bill that passed would be crap that served the interests of the economic powers that got to write it, for which the point men were, guess who!, Master Rahm and Monster Jim -- the latter a gift to an unsuspecting nation from his former boss Max Baucus, the man who did so much to ensure that meaningful health care reform would be an impossibility (and whose prerogatives and butt were protected, Ari Berman tells us, by none other than his former aide). Yes, forget all of that, and just consider how politically cretinous it all was.

Master Rahm and Monster Jim operated under the illusion that all they had to do was pass a bill, any bill, the infamous "any bill" strategy. Look how well that worked! They succeeded in ramming through a bill that understandably has no passionate supporters and legions of detractors of every philosophical persuasion, and a bill whose political benefits, whatever they might be, won't kick in until 2014.

Even as a matter of practical methodology, their strategy was crap. First off, as we know, these people consider everyone in the country to the left of them politically, which includes most of the actual Democratic Party, their deadly enemy, and went to almost any length to ridicule and marginalize us (Ari Berman documents this in nauseating specifics), while showing a willingness to give away anything the people to their political right asked for, and more, even though anyone with half a brain knew that those people were never going to give the adminstration any support. Look how well that worked out.

Moreover, the obsession with maintaining rigid, unchallengeable control of all political machinery stripped the administration "strategists" of every possible political ally. \Berman points out:

The administration’s aversion to popular mobilization on behalf of healthcare reform, either by progressive groups or the Obama-aligned Organizing for America (OFA), backfired spectacularly when Tea Party activists organized against the bill in the summer of 2009, catching Democrats off guard. Ever since then, the White House, despite the bill’s eventual passage, has largely been playing defense on healthcare. Says one Democratic operative of Messina: “I hope he’s better at political campaigns than at managing big, important pieces of legislation.”

The best thing Monster Jim has going for him as Obama 2012 campaign manager is the likelihood that they will face as pathetic a challenger as they did in 2008 -- though at that, look how close Young Johnny McCranky came to making a race of it, when logic says he shouldn't have had a claim on more than 10 percent of the vote, the hard-core crazies and the economic royalties who would have stood to profit, literally, from the economic law of the jungle that would have been economic "policy" in a McCranky administration.

Meanwhile, it's safe to assume that the last thing apt to figure in Monster Jim's campaign strategy is giving voters a reason to vote for Democrats, including the president, other than being ever so slightly less worse than the alternative. What shocks me is that for the first time I've had momentary thoughts of sitting that election out. And this is after seeing just how bad a Republican takeover of parts of government can be. Usually in these discussions I'm the one who argues that while there may not be more than a dime's worth of difference between the Democrats and Republicans, there's still that dime's worth. And sure, I'm aware of all the horrors, including life with a Republican-controlled Senate as well as House, the specter of Supreme Court appointments (not to mention all those federal court vacancies the Obama administration hasn't been able to fill), etc.

Maybe the best we can hope for is to exercise some veto power over those judicial appointments via the much-despised filibuster.

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Even with the deficit commission on the lam, Jamie Galbraith delivers what should (but won't) be a death blow

UPDATE BELOW: Zounds! The commissioners emerge from hiding for a day!

House Minority Leader "Sunny John" Boehner has taken to arguing that the Bush tax cuts aren't "what led to the budget deficit." Obviously the immediate cause is asset and revenue collapse brought on by the Bush depression, but who laid the groundwork -- for both the depression and the deficits? Of course since Sunny John's knowledge of economics is limited to shoveling in bribes in his personal Corporate Cash for Congress program, he really can't be expected to know better, can he? And apparently it's too much to hope he might keep his trap shut on stuff he doesn't know anything about.

"Secrecy breeds suspicion: first, that your discussions are at a level of discourse so low that you feel it would be embarrassing to disclose them. Second, that some members of the commission are proceeding from fixed, predetermined agendas. Third, that the purpose of the secrecy is to defer public discussion of cuts in Social Security and Medicare until after the 2010 elections. You could easily dispel these suspicions by publishing video transcripts of all of your meetings on the Internet, and by holding all future meetings in public. Please do so."

-- economist James K. Galbraith, in a statement

prepared for the Secret Commission on Deficit Reduction

by Ken

Howie and I have both been jumping ugly on the loomingly disastrous Let's Stick It to Social Security Commission brought to us by the president in cahoots with America's pillars of economic orthodoxy. While it's true, as a report on this morning's NPR Morning Edition ("Once a Critic, Obama Now Embraces Commissions") reported, that there is a long, undistinguished history of presidential commission reports that were duly filed and, after perhaps a hearty press-conference launch, never heard from again. However, I don't think this commission's report is designed to suffer the same fate.

As the Morning Edition report pointed out, a presidential commission is almost always a president's way of saying, "I don't wanna talk about it." As the Morning Edition report also pointed out, it was presidential candidate Barack Obama who derided opponent "Young Johnny" McCranky for proposing to deal with the then-new economic meltdown with -- what else? -- a presidential commission.

For a proper refutation of the kind of nonsense Sunny John is spewing about the deficit, see Kathy Ruffing and James R. Horney's Center on Budget and Policy Priorities report.

What's different about this commission -- that is, apart from its fugitive status (I expect those poor commissioners-in-hiding to start showing up any day now on milk cartons) -- is that it seems meant, not to take an awkward subject off the table, but to provide cover for the first step toward dismantling or at least drastically curtailing so-called entitlement programs long desired by certain corporate and far-right interests emblemized by corporate predator Pete Peterson. Instead of the usual commission formula of producing sensible proposals that will be safely ignored, this commission seems to have been created for the express purpose of producing intensely ideological and normally wildly unpopular plans of action which proponents can then try to strong-arm through Congress.

Which is why I'm not nearly as optimistic as Paul Krugman, in his now-famous blogpost, that ""Zombies Have Already Killed The Deficit Commission." The fact that commission co-chair former Sen. Alan "The Annoyer" Simpson is trotting out long-since-disproved (and therefore "zombie") lies about Social Security might matter if this commission's work were aimed at an impartial, well-informed decision-making authority, but in reality it seems intended to be fed into the Right-Wing Noise Machine and whatever other media echo chambers will sign on, for the purpose of simulating enough noise to induce compliance among enough members of Congress whose existences don't depend on Social Security, Medicare, or Medicaid.

Still, a commission that took it on the lam in response to scrutiny from a single blogger (Social Security Works's Alex Lawson) may be more vulnerable to intellectual shaming than I'm allowing. If so, the devastasting statement just delivered to the commission today, apparently at its request, by University of Texas economist James K. Galbraith (see link above for the text) might actually have some effect.

The statement really is worth looking through. For example, the chunk I've quoted above, denouncing the commission's secrecy, is in fact only one of four counts on which Galbraith argues that the commission is illegitimate -- and that itself is only the first point he makes, which he acknowledges is a political rather than economic one.

The New Deal 2.0 website provides this overview of Galbraith's statement:

James K. Galbraith’s Testimony Blasts Fiscal Commission

Wednesday, 06/30/2010 - 12:16 pm by Lynn Parramore

James K. Galbraith, one of the country’s most respected economists and a ND20 contributor, offered a statement today to the Fiscal Commission on behalf of Americans for Democratic Action, an organization co-founded in 1949 by (among others) by Eleanor Roosevelt. We at New Deal 2.0 recommend that you grab a coffee, sit back, and read this elegant, blistering, and brilliant description of why the Commission is both misguided and malignant.

Read full text of testimony here.

For a quick snapshot, Galbraith’s testimony is divided into ten sections, which address the following points:

-That the Commission’s work is illegitimate
-That current deficits and rising debt were caused by the financial crisis.
-That future deficit projections are generally based on forecasts which begin by unrealistically assuming full recovery
-That, having cured the deficits with an unrealistic forecast, CBO recreates them with another, very different, but equally unrealistic forecast.
-That the only way to reduce public deficits is to restore private credit.
-That Social Security and Medicare “solvency” is not part of the Commission’s Mandate.
-That as a transfer program, Social Security is also irrelevant to deficit economics.
-That markets are not calling for deficit reduction, either now or later.
-That in reality, the US government spends first & borrows later; public spending creates a demand for Treasuries in the private sector.
-That the best place in history (for this Commission) would be no place at all.

Our favorite line comes near the end with this withering address to the Commission: “You are plainly not equipped, either by disposition or resources, to take on the true cause of deficits now or in the future: the financial crisis.”

The point about the need to restore private credit is one the Republican deficit hawks have conveniently forgotten now that their masters the banksters have been bailed out and rendered at least relatively whole relative to the rest of us, only to blithely refuse to do what they were ostensibly bailed out to do: unjam the credit lockdown. You have to give them credit for recognizing what piss-poor judges of creditworthiness they were in the orgy of crap-loan-writing they engaged in as their contribution to crashing the economy. Still, if the banks aren't lending, what public interest is there in helping them to survive?

The only way to reduce a deficit caused by unemployment is to reduce unemployment. And this must be done with a substantial component of private financing, which is to say by bank credit, if the public deficit is going to be reduced. This is a fact of accounting. It is not a matter of theory or ideology; it is merely fact. The only way to grow out of our deficit is to cure the financial crisis.

To cure the financial crisis would require two comprehensive measures. The first is debt restructuring for the entire household sector, to restore private borrowing power. The second is a reconstruction of the banking system, effectively purging the toxic assets from bank balance sheets and also reforming the bank personnel and compensation and other practices that produced the financial crisis in the first place. To repeat: this is the only way to generate deficit-reducing, privately-funded growth and employment.

As a former top adviser in the Clinton White House, co-chairman [Erskine] Bowles no doubt know that privately-funded economic growth produced the boom years of the late 1990s and the associated surplus in the federal budget. He must also know that the practices of banks and investment banks with which they were closely associated worked to destroy the financial system a decade later. But I would wager that the Commission has spent no time, so far, on a discussion of the relationship between deficit reduction and financial reform. [Emphasis added.]

And Galbraith argues effectively that Social Security should be beyond the purview of a deficit commission because it doesn't create debt, it simply moves money -- money that not only has deserving recipients but is spent, unlike the money the banksters and their cronies have been piling up.

Social Security is a transfer program. It is not a spending program. A dollar "spent" on Social Security does not directly increase GDP. It merely reallocates a dollar from one potential final consumer (a taxpayer) to another (a retiree, a disabled person or a survivor). It also reallocates resources within both communities (taxpayers and beneficiaries). Specifically, benefits flow to the elderly and to survivors who do not have families that might otherwise support them, and costs are imposed on working people and other taxpayers who do not have dependents in their own families. Both types of transfer are fair and effective, greatly increasing security and reducing poverty -- which is why Social Security and Medicare are such successful programs. . . .

{C]utting Social Security benefits, in particular, merely transfers real resources away from the elderly and toward taxpayers, and away from the poor toward those less poor. One can favor or oppose such a move on its own merits as social policy -- but one cannot argue that it would save real resources that are otherwise being "consumed" by the government sector. [Emphasis added.]

AND AFL-CIO PRESIDENT RICHARD TRUMKA WEIGHS IN

Also scheduled to report to the commission today was AFL-CIO President Richard Trumka, whose prepared statement included this (there are footnotes in the online text which I've left out):

We need to be clear that President Obama is not to blame for getting us into this mess. Two weeks before he took office, the Congressional Budget Office (CBO) projected a budget deficit of $1.4 trillion for 2009—and annual deficits averaging well over $1 trillion for the coming decade.

We should be honest about what’s causing deficits over the next ten years. According to the Center on Budget and Policy Priorities, “The tax cuts enacted under President George W. Bush, the wars in Afghanistan and Iraq, and the economic downturn together explain virtually the entire deficit over the next ten years.” And “without the economic downturn and the fiscal policies of the previous administration, the budget would be roughly in balance over the next decade.”

Although more than half of the 2009 deficit is due to the recession, Council of Economic Advisers Chair Christina Romer points out that “in the absence of [Bush administration policies that we failed to pay for], we could have had an economic downturn as severe as the current one and responded to it as aggressively as we have, all while keeping the budget roughly balanced over the next ten years [2010-2019].”

We should also be honest about what’s causing projected deficits over the long term. We do not face a crisis of entitlement spending generally, caused by the retirement of the Baby Boomers. In the long term, we face a crisis of public and private health care costs growing faster than GDP, especially after 2035. Social Security has its own source of dedicated funding and is not responsible for our unsustainable long-term debt, and spending on other entitlements is projected to fall as a share of the economy over the long term. [Emphasis added.]

Of course the deficit hawks can always be counted on to be in the forefront of the resistance to any serious effort to rein in health care costs.

It would be interesting to get an idea of the commissioners' responses to the Galbraith and Trumka testimony, but I assume the Secret Commission has gone back into hiding. Soon to be seen on milk cartons in a supermarket dairy case near you?


THURSDAY UPDATE: WHAT DO YOU KNOW? THE
COMMISSION EMERGED FROM HIDING -- FOR A DAY

Well, my goodness, the D.C. Deficit Hawks' Club, I mean the Secret Deficit Commission, slipped out of the attic yesterday to hold what at least one source called "a rare public session"!

I wish I could say this seems in some way significant. I mean, if this was the day set aside for what the defhawks no doubt consider wild-eyed radical lefties like Jamie Galbraith and AFL-CIO President Trumka, why bother going through the motions unless you do it publicly? Never mind that Galbraith has become one of the country's most respected economists; the quickest glance at the statement he was bringing tells you that not a word of it will be given the slightest attention. And when was the last time anyone inside the District of Columbia felt any need to pay attention to anything having to do with organized labor?

Let's wait and see how open the DCDHC, I mean the SDC, is when it comes to actual commission work.

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Right-wing doodyheads don't still dream that they have any clue about governing, do they?

"This is what Reaganites have always meant when they've talked of a 'shining city on a hill.' They envision a dystopia whose anti-tax fires incinerate social fabric faster than James Dobson can say 'family values' -- a place like Colorado Springs that is starting to reek of economic death."

-- David Sirota, in his syndicated column last week,

"The Case for Choosing Life"

by Ken

We get our share of right-wing trolls here, and lately there is a strain of gloating as the Obama administration flounders. Of course these people are so grossly stupid and dishonest that you almost have to marvel at the spectacle. While the assorted forces of the Do-Nothing Right have done nothing but marshall their obstructionist might to facilitate the decimation of the country, they cackle about Obama (still, of course, the imaginary Obama of their diseased imaginations) and "liberal" government, as if there was any connection between this determinedly "centrist" administration and liberalism. If modern Movement Conservatism hadn't rocketed the milestone markers way the hell out to the next galaxy, we could identify the Obama circle as "right of center," and congressional Democrats too, dragged into the other column by the power-deciding contingent of just-plain-right-wing Dems.

But the real piquancy of the spectacle is being lectured to on governance by people whose brains, even if they were all mooshed together (which they pretty much are, thanks to decades of careful cultivation and manipulation by shrewd, well-financed demagogues, and kept in a steady state of emulsion by the indefatigable blasting of the Right-Wing Noise Machine), probably couldn't come up with a workable idea for productive government, even in the tiniest measure, if their sorry lives depended on it.

These are, remember, the people who stood on the sidelines of the 24/7 horrors of the Bush regime, not just cheering, but ritually berating and even threatening anyone who had the simple sense to point out that the mayhem being perpetrated by the regimistas wasn't good for anyone except the economic predators who had put the regime in power. And when it finally became hard for even the dimmest bulbs to ignore the fact that the regime had been an unmitigated catastrophe in every dimension, the non-brain-using righties performed one of the great vanishing acts in human history: They disappeared even as much as the name of George W. Bush from their make-believe "reality" -- and proceeded to nominate for the presidency a shell of a man who even before the onset of senility had made a political career of hoodwinking the media into parroting a wildly false "moderate" image.

Then when they couldn't pull off an election miracle with the most dishonest political campaign in human history, in which every word out of the mouth of every Republican was an undisguised lie (except among the growing chorus of unapologetic thugs who felt no need to disguise their agenda of screeching ignorance and venomous hate), they formed an opposition that, ignoring repeated invitations to participate in the governing process, had a better idea: Scream "no" to everything, and stand impassably in the path of every effort to deal with the accumulated catastrophes bequeathed by our most recent experiment in right-wing misgovernance.

If ever a time called for liberal govenance, and an actual leader who would have cracked heads in Congress to enact a liberal agenda, this was it. And if ever there was a time for the doodyheads whose craven imbecility got us into this fix to shut their lying yaps, this was it.

Instead we got Democrats playing patsy for the rampaging doodyheads, and the doodyheads presuming to pollute the public discourse with even more clueless nonsense than before. Of course now the doodyheads are playing from their only position of real political strength: out of power, when they don't have to take responsibility for coping with the problems they've caused, and can just denounce everyone trying to do so.

True, there are a lot of Republican governors, and like their Democratic counterparts they're stuck having to grapple with real reality: managing to continue providing the government services that citizens expect (moronic right-wing rhetoric to the contrary) in the wake of the economic meltdown.

In his syndicated column last week, our friend David Sirota looked, from a Coloradan's vantage point, at real-world examples of both the right-wing dead end and a possible real-world way out. "Plagued by deficits, communities everywhere must now decide between tax reform and public spending cuts," he wrote, "between economic life and death. And thanks to two Western bellwether states, we know what each choice means."

As his example of "choosing death," he cited an example of right-wing ideology carried to its logical extreme: blood-red Colorado Springs:

Choosing death means mimicking Colorado Springs -- a Republican red tattoo on Colorado's purple heart.

As a venue for political experiments, the sprawly GOP enclave is as pristine a conservative laboratory as you'll find in America. If the city has garnered contemporary notoriety at all, it has achieved infamy for domiciling right-wing groups like Focus on the Family and infecting the world with viruses like Douglas Bruce -- the father of draconian initiatives that seek to prohibit governments from raising levies.

When the Tea Party movement’s anti-tax activists refer to the abstract concept of conservative purity, we can turn to a microcosm like The Springs (as we Coloradoans call it) for a good example of what such purity looks like in practice -- and the view isn't pretty.

Thanks to the city's rejection of tax increases -- and, thus, depleted municipal revenues -- The Denver Post reports that "more than a third of the streetlights in Colorado Springs will go dark; the city is dumping firefighting jobs, a vice team, burglary investigators, beat cops; water cutbacks mean most parks will be dead ... recreation centers, indoor and outdoor pools (and) museums will close for good; Buses no longer run on evenings and weekends; (and) the city won't pay for any street paving."

Meanwhile, even with the Colorado Springs Gazette uncovering tent ghettos of newly homeless residents, the city's social services are being reduced -- all as fat cats aim to punish what remains of a middle class. As just one example, rather than initiating a tax discussion, the CEO of The Springs' most lavish luxury hotel is pushing city leaders to cut public employee salaries to the $24,000-a-year level he pays his own workforce -- a level approaching Colorado's official poverty line for a family of four.

This is what Reaganites have always meant when they've talked of a "shining city on a hill." They envision a dystopia whose anti-tax fires incinerate social fabric faster than James Dobson can say "family values" -- a place like Colorado Springs that is starting to reek of economic death.

Of course it's always easier to show what's wrong. Here's David's example of "choosing life":

Choosing life, by contrast, means doing what Colorado's governor and state legislature are doing by temporarily suspending corporate tax exemptions and raising revenue for job-sustaining schools and infrastructure. Even more dramatically, it means doing what voters in Oregon did last week.

As deficits threatened their education and public health systems, Oregonians confronted two ballot initiatives -- one modestly raising taxes on annual income above $250,000, another hiking the state's $10 minimum corporate income tax.

Despite these measures exempting 97 percent of taxpayers, conservatives waged a vicious opposition campaign, trotting out billionaire Nike CEO Phil Knight as their celebrity spokesperson. But this time, the right's greed-is-good mantra failed. In a swing state that had killed every similar initiative since the 1930s, voters backed the tax increases -- and chose economic life.

No matter where we live, this same choice will soon face us all in some form. It is a choice embodied in President Obama's pragmatic initiative to end his predecessor's high-income tax breaks, a choice for which future local and federal elections will serve as proxies.

Inevitably, anti-tax zealots will attempt to obscure what this choice is about -- but the choice is now crystal clear.

Tax reform or draconian cuts, life or death -- the decision is ours.

As David notes, the delusion of a free-market utopia isn't new. At the federal level, it dates back to the Age of Reagan. But of course the right-wing economic masters who pull the strings on Movement Conservatism have no interest in a free market, even if such a thing were possible in the real world.

I think it's worth remembering that probably the deepest-rooted, if least-talked-about, reason for the invasion of Iraq, the one that none of its proponents dared to speak of publicly, was the neoconservative fantasy of transforming the country into a "free market" paradise, feeding on (not to mention siphoning off) all that oil wealth.

Well, they did manage to embed enough "free marketeers" in the occupation to steal who-knows-how-many billions of dollars, and they created an occupation apparatus (I hesitate to call it a "structure," which would suggest that it was built with a set of objectives to accomplish) that paid hefty dividends to the corporate predators and American terrorists who had bankrolled the Bush regime. There's not much trace of paradise in Iraq, though, free-market-style or otherwise. And there's a lot of death and destruction lying in the path of the neocons' wet dream.

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More from the A Mind Is a Terrible Thing to Waste Dept.: Don't know nuttin' 'bout economics but I know what's what

"Even now, it's hard to get Democrats, President Obama included, to deliver a full-throated critique of the practices that got us into the mess we're in. And as for the Republicans: now that their policies of tax cuts and deregulation have led us into an economic quagmire, their prescription for recovery is -- tax cuts and deregulation."

-- Paul Krugman, in his NYT column today

by Ken

Yesterday I wrote a piece called "Thanks to the soft-on-dummies Obama campaign, right-wingers can repackage their disastrous failed policies as 'common-sense wisdom.'" It drew the following comment from one John Tecumseh Shawnee:

The current economic meltdown is not the fault of former President Bush. The current economic recession is the result of the “Community Reinvestment Act” started my Jimmy Carter and the Democrats and escalated by Clinton that forced Banks to make bad mortgage loans to unqualified low income buyers. Bush tried to fix the problem but was blocked by the Democrats lead by Barney Frank and Chris Dodd. It was Obama’s community action group, ACORN that further intimidated the banks and mortgage companies to push the bad loans. Obama was one of the Senators that is most responsible for forcing the irresponsible loans made Fannie Mae and Freddi Mac.

It's all lies, delusions, and deliberately fraudulent bullshit. I'm sorry, but it's impossible to tell this many lies in such a tiny space without doing it deliberately.

First off, you obviously don't have have the slightest idea, not the slightest, what the Community Reinvestment Act was or did. All you know is the Talking Points lies invented about it and regurgitated by your only source of information: the Right-Wing Noise Machine. In this case the lies are so pathetic and transparent that nobody with a working brain has any excuse for being deluded by them. You only swallow such rank bullshit become you love bullshit.

Think for just a second. (I know you're not used to thinking, and it's going to hurt for a while, but it's worth trying.) Of course you've been taught to hate poor people, because the rich people who control the RWNM want suckers like you to have a scapegoat for the stuff they do, and they know you won't think too deeply about how illogical it is that poor people could cause the kinds of problems it takes rich people to create. Not even the wildest leap of illogic could make it reasonable to imagine that the pittance in bad loans to poor people could possibly have brought the economy down.

If you had taken any trouble at all to inform yourself -- in the real world, not in the world of Right-Wing Bullshit Lies -- what actually happened, it would occur to you that the Community Reinvestment Act all too obviously had nothing to do with the insanity of the housing bubble, which was fueled by the people who pay for the RWNM. You would understand that the Community Reinvestment Act had nothing to do with the orgy of greed and fraud perpetrated by the insurance companies, the banksters, and Wall Street, who were churning out as much of that crap "securities" paper as fast as they possibly could, and they were able to because the short-sighted apostles of "deregulation," including some D's, yes, but pretty much all of the R's, had carefully removed the needed regulatory controls. They were issuing all that crap paper to meet the demand for it, because until investors awoke from their spell, as long as they were willing to buy that crap, it had "value." (And hey, isn't that how the sainted "free market" works? Supply and demand.) Naturally, once people began realizing that other people's opinion of their value didn't matter, they were barely worth the paper they were printed on, the illusion couldn't be sustained. Inveitably, they rushed to try to salvage something from their "investments," and the bottom fell out of the market.

And no, Fannie Mae and Freddie Mac had very little to do with any of that. (The reason Chimpy the Prez went after Fannie and Freddie was the while Republicans were stealing every dollar from the federal government they could get their hands on, their was profound resentment that a few dollars might be siphoned off by Democrats. He did nothing about the budding economic catastrophe except to signal "full steam ahead.")

There were plenty of sane, responsible economists, of various political persuasions, warning for years that the shit was going to hit the fan. Your response illustrates my point exactly: Failure to learn the lessons of disastrous incompetence guarantees that we'll repeat them, or new versions of them, as witness the powerful activity of Wall Street and the banksters to resist minimal recontrol of their activities, which they've demonstrated all too well they can't control themselves.

Once again, you obviously know nothing at all about ACORN, not to mention this delusion of yours that it's "Obama's." Your brainmasters in the RWNM have done an astoundingly good job of making it the Grand Bogeyman in the nonfunctioning brains of pathetically gullible dunderheads like you. Again, it works with poor people, to help them secure their basic rights as citizens, and on your side of the sanity fence poor people are devils who have no rights. You do know, for example, that not a single fraudulent vote was cast a result of the small number of bogus people registered by employees of ACORN? They were just trying to get the extra few bucks for the extra sign-ups; nobody was ever going to cast votes under those names. And of course it was ACORN, following the law that reported the abuses as they were discovered. Meanwhile on your side of the political-crime gap Republican operatives work 365 days a year committing intentional and systematic fraud gathering petition signaures and voter sign-ups, and stealing every election they can get their grubby mitts on.

As for the "incriminating" ACORN videos, well, we still don't know what to make of them, though we do seem to know that they were heavily edited, by highly suspicious people. There is no evidence or indication that they represent any systematic problem inside ACORN. And ACORN intimidating banks and mortgage companies? In what universe?

I gather, JTS, that you didn't read my recent proposal ("Do you have to be a moron or a nutjob to be a right-winger? No, but at least that would give you an excuse?") that right-wing delusionals whose delusions are caused either by mental illness or imbecility identify themselves as such, so that we would at least know that the delusions possibly can't be helped. That way, any one of you who doesn't so self-identify can be assumed to belong to one of the other groups spouting such claptrap. The ones I identified were "the corporate predators, for example, or the ideological hooligans or the 'too lazy to learn' or the compulsive liars or the 'just wanna be told what to do by somebody in charge.'" Does one of those cover your situation?

#

I'll say it again: I think most of the former Bush "faithful" have forgotten even the bum's name. Meanwhile, what IS going on in Blair House?

SEE UPDATE BELOW


by Ken

A listserv colleague had just stressed the need to keep hammering home the disaster of the eight-year Bush spending binge -- to force it on the awareness of people, "many of whom want to forget Bush." Since Bush amnesia is kind of a hobby horse of mine (I've written about it here a number of times already), I chimed in:

I don't think enough note has been taken of this phenomenon of Bush-forgetting, the -- to me, anyway -- totally unexpected successor to "Bush-basher"-bashing.

I think for most of the former Bush faithful this is already a done deal. It's like they don't even recognize the NAME. George WHO? Sorry, doesn't ring a bell. At a guess the long, energy-sapping election season provided cover for this amazing disappearing act. Remember how what's-his-name seemed to disappear completely from the GOP nomination battle? (From the Dem one too for the most part, come to think of it.) At the time it seemed like just politics. I think the guy was already making his Great Escape from public consciousness, not to mention accountability.

I used to wonder if it would ever be possible for Bush supporters, both professional and electoral (you know, like the people who voted for the guy twice), including those swell folks who used to scream in outrage at the slightest whisper of what to them was "Bush-bashing," to face up to the reality of who and what their hero was. While some of them have indeed turned on him by claiming that he wasn't a "real conservative," by and large -- and I never saw this one coming! -- the strategy seems to have been to FORGET THAT THERE EVER WAS SUCH A PERSON. Yes, even while the bum is still in the White House and, you know, the one and only president of these United States!

Already the years 2001-08 have metamorphosed into a hazy time when the Democrats were plotting with Fannie and Freddie, taking cash and gifts from them while getting them to make all those bad loans to "those people" who shoulda never got 'em, with the goal of causing Wall Street to explode. During that same time, of course, the ultra-liberal, Islamofascist-loving Dems were also at work failing to support Our Brave Troops and doing everything they could to prevent OBT from achieving the glorious victory General Petraeus eventually won -- over the godless Democrats, I believe.


RACHEL MADDOW WANTS TO KNOW: WHAT
THE HECK IS GOING ON IN BLAIR HOUSE NOW?

Chimpy the Prez may have all but disappeared, but that hasn't stopped him from worsening the economic mess and the Israeli-Palestinian mess. And you'll recall that the White House vetoed the Obama request to move into Blair House on January 5, when the Obama girls were scheduled to begin school, rather than the 15th (the customary date for incoming presidents) -- on the ground that the mammoth building was "booked."

"Booked?" Rachel Maddow asked incredulously last night on her MSBNC show. All 119 rooms and 70,000 square feet, booked? As we all know, the Obama family has now made the move to Washington -- into a hotel. The White House Office of Protocol refused to provide the Maddow people with an agenda for Blair House, but the First Lady's spokesperson did graciously point out that they had "graciously" invited the Obamas to move in on the 15th! "Yes," Rachel noted, "they actually used the word 'graciously.'"

This has all served to make Rachel that much more curious to know what exactly is going on in Blair House which made it impossible to accommodate the president-elect's family.

Visit msnbc.com for Breaking News, World News, and News about the Economy

If you're a D.C. insider type and have an invitation to an event taking place in Blair House during this 10-day period, Rachel is begging you to e-mail it to her -- just so she can find out what's going on there. (She's also got a Twitter query out to this effect.)

Note that the clip, last night's "Ms. Information" segment, also includes hilarious coverage of Grover Norquist's grand summit of the hopefuls for the Republic National Committee chairmanship, which we've been covering avidly.


TUESDAY NIGHT UPDATE -- WE HAVE OUR ANSWER!

Rachel, it turns out, was flooded with e-mails, but there's only one piece of information about plans for Blair House between th 5th and 15th of January: On the 13th, former Australian Prime Minister John Howard is scheduled to stay over!

Even apart from the question of whether there really isn't enough space among those 119 rooms (and 35 bathrooms!) for the four Obamas as well as Mr. Howard that night, or whether it really wasn't possible to put him up somewhere else (where the security costs would certainly have been the tiniest fraction of what it's costing to secure the president-elect's family at the Hay-Adams Hotel (Blair House, of course, comes equipped with security), it turns out that the former prime minister's visit is a red herring, that in fact he was booked after the Obama request to take up residence on the 5th was turned down, presumably so there would be at least the one booking.

Bloomberg News's Margaret Carlson reported exclusively tonight that in fact the Bush turndown was wholly unrelated to occupancy of Blair House. The Bushes just didn't wanna, end of story. And apparently the useless scumbags didn't give a flying fig either about the inconvenience to the Obamas or the cost to U.S. taxpayers.

In other words, the shithead was saying just what he's said with every breath he's drawn since he was installed in the White House:

"Fuck you, America! Eat shit!"

Class all the way. Every cell in his worthless carcass is toxic waste, always has been, and you'd have to be pretty much brain-dead not to have noticed it.

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Harold Meyerson: "Laissez faire be damned, the ideologues concluded: When handed a Lehman, make Lehman aid"

It's a terrible price to pay for such a modest benefit, but it's something. At least our friends on the Greed-and-Selfishness Right have learned their lesson and won't dare open their mouths on economic matters for, oh, a long long time!

Nah, I suppose that's too much to hope. Lesson-learning doesn't come easily to those folks. Harold Meyerson proposes a couple of lessons in his Washington Post column today which we might hope they learn, though. -- Ken

The Big Bailout Lessons

By Harold Meyerson

Two things we learned about our politics and our economy in 2008:

Lesson One: If it's big and you don't regulate it, you end up nationalizing it.

One of the major lessons of the year is that unregulated and underregulated capitalism ends up confronting democratic governments with a subprime choice: Either let a major institution go down and watch as chaos follows (the Lehman option) or funnel gobs of the public's money into such institutions to avoid such Lehman-like chaos.

It was the Bush administration, more than the government of any other nation, that demonstrated this iron law of economics, for it was the Bush administration that was most committed to laissez-faire economics. The White House and the Treasury, under George W. Bush and Bill Clinton, let an entire unregulated financial world rise alongside the more regulated consumer banks and brokerages. Uniquely under Bush, however, the regulation of regulated banks and brokerages broke down as well. In 2000, the Justice Department filed 69 cases of securities fraud based on Securities and Exchange Commission investigations. In 2007, it filed nine. And this year, Bush's Office of Thrift Supervision allowed IndyMac Bank to doctor its books so it wouldn't appear to be as insolvent as, in fact, it was.

When the American financial industry came tumbling down this year, the laissez-faire ideologues of this most ideological administration indulged their ideology just once, allowing Lehman to go under. Thereafter, as one giant institution after another tottered under the weight of dubious deals, the administration tossed ideology out the window and funneled money to the banks.

Laissez faire be damned, the ideologues concluded: When handed a Lehman, make Lehman aid.

The lesson for 2009 couldn't be clearer: To avoid nationalization, you need regulation. Or, the lesson's ideological corollary: To avoid socialism (to whatever extent throwing public money at banks is socialism), you need liberalism (that is, the willingness to restrain capitalism from its periodic self-destruction).

Presumably, these lessons haven't been lost on Barack Obama, who has pledged to re-regulate Wall Street. Whether he's selected the right people for this task remains to be seen. To head the SEC, he chose Mary Schapiro, who led the financial industry's own regulatory authority, over such proven investor advocates as former SEC commissioner Harvey Goldschmid. The issue isn't Schapiro's competence or probity, which are well established, but whether she shares the "deep suspicion of bankers, of Wall Street lawyers, and of corporation lawyers in general" that characterized (in the words of FDR consigliere Raymond Moley) Tommy Corcoran and Ben Cohen, the New Deal attorneys who drafted the original and highly successful Securities and Exchange Act. If she doesn't, considering that Wall Street and its apologists are already warning about the dire effect of new regulations on the economy -- and, one presumes, their annual bonuses -- we'll be bound for a new cycle of light regulation and heavy public bailouts.

Lesson Two: In matters economic, the Civil War isn't really over.

If Abraham Lincoln were still among the living as he prepared to turn 200 six weeks from now, he might detect in the congressional war over the automaker bailouts a strong echo of the war that defined his presidency. Now as then, the conflict centered on the rival labor systems of North and South. Now as then, the Southerners championed a low-wage, low-benefits system while the North favored a more generous one. And now as then, what sparked the conflict was the North's fear of the Southern system becoming the national norm. Or, as Lincoln put it, a house divided against itself cannot stand.

Over the past century, of course, the conflict between North and South has been between union and non-union labor. The states of the industrial Midwest and the South had common demographics (Appalachian whites and African Americans, though the Northern states also were home to Catholics of Eastern European origin) but developed two distinct economies.

Residents of the unionized north enjoyed higher living standards, both from their paychecks and the higher public outlays on health and education, than did their counterparts in the union-resistant South.

But, just as Lincoln predicted, the United States was bound to have one labor system prevail, and the debate over the General Motors and Chrysler bailout was really a debate over which system -- the United Auto Workers' or the foreign transplant factories' -- that would be. Where the parallel between periods breaks down, of course, is in partisan alignment. Today's congressional Republicans are hardly Lincoln's heirs. If anything, they are descendants of Jefferson Davis's Confederates.

The Republicans in the White House, however, couldn't afford to be so sectional, since they were still subject to Lesson One: Even if the cars were lemons, they had to make -- okay, once per column.

Happy regulated new year.

#

An agency with "occupational" and "safety" and "health" in its name was always a sitting duck at the hands of the merciless Bush regimistas

"Heckuva Job Foulkie" (left) at a 2007 congressional
hearing, alongside injured worker Eric Peoples

by Ken

So, another federal agency bites the dust. Or, to be technical, turns out to have bitten the dust.

Oh, I know, I'm as bored as you are with this tiresome procession of Inspector General reports, congressionally mandated inquiries, GAO reports, CBO studies, independent inquiries, and on and on -- each revealing that yet another arm of the federal government was either reduced to impotence or transformed into an enforcement arm of the Far, Far Right totalitarian, megalomaniacal, constitution-shredding goons of the Bush regime. So what else is new?

Is there really much point sifting through the wreckage? Maybe trying to figure out how it all happened? Aren't we supposed to, you know, just get on with it?

Just like with Iraq. Why would troublemaking lefites insist on asking embarrassing questions about how the country got snookered into playing neocon war games, only for real? I would have thought that the "for real" part is explanation enough all by itself for why yes, we have to know how it all happened.

But I suppose we need to get some of the dreary facts on the record. Yesterday's Washington Post story began, typically enough, with a now-familiar sort of Incriminating Episode:

Under Bush, OSHA Mired in Inaction

By R. Jeffrey Smith

In early 2001, an epidemiologist at the Occupational Safety and Health Administration sought to publish a special bulletin warning dental technicians that they could be exposed to dangerous beryllium alloys while grinding fillings. Health studies showed that even a single day's exposure at the agency's permitted level could lead to incurable lung disease.

After the bulletin was drafted, political appointees at the agency gave a copy to a lobbying firm hired by the country's principal beryllium manufacturer, according to internal OSHA documents. The epidemiologist, Peter Infante, incorporated what he considered reasonable changes requested by the company and won approval from key directorates, but he bristled when the private firm complained again.

"In my 24 years at the Agency, I have never experienced such indecision and delay," Infante wrote in an e-mail to the agency's director of standards in March 2002. Eventually, top OSHA officials decided, over what Infante described in an e-mail to his boss as opposition from "the entire OSHA staff working on beryllium issues," to publish the bulletin with a footnote challenging a key recommendation the firm opposed.

The usual stuff, right? Next, of course, comes the revelation (gasp) that this was (a) by once-normal standards extraordinary, even unprecedented behavior inside an executive-branch agency, and (b) this behavior wasn't the exception, it was the rule at OSHA:

Current and former career officials at OSHA say that such sagas were a recurrent feature during the Bush administration, as political appointees ordered the withdrawal of dozens of workplace health regulations, slow-rolled others, and altered the reach of its warnings and rules in response to industry pressure.

The result is a legacy of unregulation common to several health-protection agencies under Bush: From 2001 to the end of 2007, OSHA officials issued 86 percent fewer rules or regulations termed economically significant by the Office of Management and Budget than their counterparts did during a similar period in President Bill Clinton's tenure, according to White House lists.

Then of course there's the regimistas' standard indignant how-dare-you denial of all:

White House officials have dismissed such tallies, emphasizing in recent regulatory overviews that their "objective is quality, not quantity," and that heavy restrictions on corporations harm economic performance. During Bush's presidency, they said in a September report, average annual regulatory costs were kept 24 percent lower than during the previous two decades. OSHA says it has issued many rules of lesser consequence that nonetheless clarified industry responsibilities.

Talk about pathetic! Do they think that at this late date they don't owe us better lies and cover-ups? (Maybe they've given up even trying?) We don't have to wait long to hear from people who actually care about occupational safety and health, and are actually for it, people who've known what's been going on -- and have probably been trying to get someone to listen -- for years:

"The legacy of the Bush administration has been one of dismal inaction," said Robert Harrison, a professor at the University of California at San Francisco and chairman of the occupational health section of the American Public Health Association. It has been "like turning a ketchup bottle upside down, banging the bottom of the container, and nothing comes out. You shake and shake and nothing comes out," Harrison said.

More than two dozen current and former senior career officials further said in interviews that the agency's strategic choices were frequently made without input from its experienced hands. Political appointees "shut us out," a longtime senior career official said.

I suppose we should go through the whole bloody thing. Listen, for example, to former administration director Edwin Foulke (technically "assistant secretary of labor for OSH," since OSHA is an agency within the Labor Dept.) brag --

* about "levying heavy fines after major workplace disasters" (after major disasters? and what constitutes "major"? and were the fines actually collected?),

* about continuing "a drop in reported workplace injuries that began in 1974" (without mentioning the "14 percent drop in U.S. production and manufacturing jobs since 2001" and the "2002 change in the government's record-keeping rules").

Heckuva job, Foulkie!

In retrospect, without any investigation or inquiry we can say two things about the decimation of OSHA with a high degree of certainty:

(1) We can date the beginning of the agency's demise to the day those five Supreme Court justices decided (as Noah was just recalling), "To hell with counting the votes, for the good of the country let's make the guy who's trying to steal the election president." Maybe the idea was that since his people wanted it so much more, that would mean good things for the country? (In which case, oops, the joke's on them!)

(2) An outfit with a name like Occupational Health and Safety Administration was a sitting duck from the outset. In Bushworld, these are weasel words for "just drains money out of the pockets of deserving, regulation-oppressed businessmen, in order to do stuff no right-thinking [or, particularly, Right-thinking] person gives a crap about." Safety and health in the workplace? Gimme a break! Who says workers have any right to either? The only right workers have is to the absolute minimum financial compensation management can get away with giving.

I almost fell into the trap of saying "the absolute minimum the law allows." But that, as Richard Nixon might have said, would be wrong. (And who would know better about what's "wrong"?) It assumes that your Right-thinking managers:

(a) can't get laws and administrative rules changed (in which case, what was the point of buying up a whole government?), and

(b) feel any obligation to follow either laws or administrative rules (after all, the president they bought didn't).

We don't need no stinkin' reggolation, the Good Friedmanite intones solemnly. All's we need is God's Own Free Market.

But of course they don't really want no stinkin' free market. They want a market that's rigged to relieve them of as much obligation to society and to their workers as possible -- and by golly, they were (and still are) prepared to buy a government to do it. In addition to which, the Good Friedmanite's doctrine is a fantasy -- always was, especially is now, and always will be.

The Friedmanite theory is that if workers are sickened and injured or maimed or even killed on the job, the competitive pressures of a free market will lead those managements to upgrade their health and safety practices in their own economic interest. Which is nonsense, of course. Especially if those managements can get their bought government to lighten the administrative burdens of paying for their lapses. Far cheaper than keeping those old workers on the job is jettisoning them and replacing them with younger, less experienced, and above all cheaper workers. Heck, it's not as if workers get trained to do their jobs anymore. (Too expensive! Unproductive!)

Do we not have that executive memo from WalMart? You know, the one detailing corporate policy to do everything possible to shed older, more experienced, and above all more expensive workers so they can be replaced by less skilled people who are more desperate for work, any kind of work, including (especially?) work for minimal pay, under any conditions, and with few if any benefits?

The only shame about the OSHA "revelations" is that they come within weeks of the final slinking away of the Bush regime. Where the hell have we been all this time?

Oh, there have been malcontents shouting about this as well as the innumerable other Bush regime depredations, going back before 9/11 -- the event that in retrospect provided cover for ideological ransacking of our legitimate government which followed. But nobody wanted to hear. They were dismissed and derided as "Bush-bashers."

Can we at least hope that the Obama transition team is paying attention? Close attention.


POSTSCRIPT: THE NEW YORK TIMES WEIGHS IN EDITORIALLY

While we're on the subject, and while outgoing Labor Secretary Elaine Chao (aka Mrs. "Miss Mitch" McConnell, and as labor secretary OSHA's overboss), who has presidied over what we have abundant indications is a similar reign of political terror and enforced ineptitude within the department as a whole, but lately has been attempting, astonishingly, to portray her stewardship as a boon for working people, yesterday's NYT carried this editorial, which I think speaks for itself:

December 29, 2008

EDITORIAL
The Labor Agenda

There is no doubt that President-elect Barack Obama has chosen a labor secretary who could be a transformative force in a long-neglected arena. The question is whether he will let her.

Hilda Solis, a United States representative from Southern California, is the daughter of immigrant parents with union jobs. She has been an unfailing advocate of workers’ rights during eight years in Congress and before that, in California politics.

Ms. Solis has been a leader on traditional workplace issues, like a higher minimum wage and an enhanced right to form unions. She also has helped to expand the labor agenda by sponsoring legislation to create jobs in green technology, and in her support for community health workers and immigration reform.

Her record in Congress dovetails with the mission of the Labor Department, to protect and further the rights and opportunities of working people. It also dovetails with many of the promises Mr. Obama made during the campaign, both in its specifics and in its focus on the needs of America’s working families.

The main issue is whether the Obama administration will assert a forceful labor agenda in the face of certain protests from business that now — during a recession — is not the time to move forward.

The first and biggest test of Mr. Obama’s commitment to labor, and to Ms. Solis, will be his decision on whether or not to push the Employee Free Choice Act in 2009. Corporate America is determined to derail the bill, which would make it easier than it has been for workers to form unions by requiring that employers recognize a union if a majority of employees at a workplace sign cards indicating they wish to organize.

Ms. Solis voted for the bill when it passed the House in 2007. Senate Republicans prevented the bill from coming to a vote that same year. Mr. Obama voted in favor of bringing the bill to the Senate floor and supported it during the campaign.

The measure is vital legislation and should not be postponed. Even modest increases in the share of the unionized labor force push wages upward, because nonunion workplaces must keep up with unionized ones that collectively bargain for increases. By giving employees a bigger say in compensation issues, unions also help to establish corporate norms, the absence of which has contributed to unjustifiable disparities between executive pay and rank-and-file pay.

The argument against unions — that they unduly burden employers with unreasonable demands — is one that corporate America makes in good times and bad, so the recession by itself is not an excuse to avoid pushing the bill next year. The real issue is whether enhanced unionizing would worsen the recession, and there is no evidence that it would.

There is a strong argument that the slack labor market of a recession actually makes unions all the more important. Without a united front, workers will have even less bargaining power in the recession than they had during the growth years of this decade, when they largely failed to get raises even as productivity and profits soared. If pay continues to lag, it will only prolong the downturn by inhibiting spending.

Another question clouding the labor agenda is whether Mr. Obama will give equal weight to worker concerns — from reforming health care to raising the minimum wage — while the financial crisis is still playing out. Most members of his economic team are veterans of the Clinton administration who tilt toward Wall Street. In the Clinton era, financial issues routinely trumped labor concerns. If Mr. Obama’s campaign promises are to be kept, that mindset cannot prevail again. Mr. Obama’s creation of a task force on middle-class issues, to be led by Vice President-elect Joseph Biden and including Ms. Solis and other high-ranking officials, is an encouraging sign that labor issues will not be given short shrift.

There are many nonlegislative issues on the agenda for Ms. Solis. Safety standards must be updated: in the last eight years, the Labor Department has issued only one new safety rule of its own accord; it issued a few others only after being compelled by Congress or the courts. Overtime rules that were weakened in 2004 need to be restored. To enforce labor standards, the Labor Department will need more staff and more money, both of which have been cut deeply by President Bush.

Only the president can give the new labor secretary the clout she will need to do well at a job that has been done so badly for so long, at such great cost to the quality of Americans’ lives.

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How do we know that Treasury knows that this tax giveaway was illegal? From the way they sneaked it out the back door under cover of the bailout to-do

Sen. Chuck Grassley (right), ranking Republican on the Finance Committee, is reportedly "particularly outraged," and Chairman Max Baucus (left) isn't happy either. But everyone is -- shhh! -- whispering.

"We're left now with congressional Democrats that have spines like overcooked spaghetti. So who is going to stop the Treasury secretary from doing whatever he wants?"

-- tax attorney Lee Sheppard, quoted by Amit R. Paley in "A Quiet Windfall for U.S. Banks," in today's Washington Post

by Ken

Obviously you can't turn your back for a second on our pals the corporate predators -- or on their bosom cronies in the Bush regime. In this case we're talking about the U.S. Dept. of the Treasury Inc., under the splendid direction of Treasury Sec'y (and Bailout Czar) Hank Paulson. It turns out that Capitol Hill insiders have been steaming for more than a month now over a breathtaking stunt pulled ever so quietly by the department's tax policy people on Sept. 30. As Post reporter Paley reports:

The financial world was fixated on Capitol Hill as Congress battled over the Bush administration's request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.

The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.

As far as the Treasury elves are concerned, they were just engaging in a wee bit of administrative fine tuning, as authorized within the very bit of tax code they tinkered with: section 382, described as "so little-known that even influential tax experts sometimes draw a blank at its mention." It's a 1986 congressional attempt to fix a loophole whereby, as I understand it, companies doing mergers were simultaneously acquiring shell companies with no value except tax losses in order to lower the tax bite.

And it turns out -- surprise! -- that the usual klatsch of corporate predators has been targeting section 382 since 1986, on the ground that it's unhelpful to corporations doing mergers by depriving them of this clever gimmick for lowering the tab. Which, you know, was kind of the idea.

Oh, the usual tax and legal "experts" whose philosophy is that rich people and corporations have the right to do any damn thing that comes into their larcenous heads say that sure, the Treasury Dept. had the right to do this, you betcha. The rest of the business-law community is saying, basically, WTF???

"Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no," said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. "They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks."

[Just to be clear -- because it's easy to misread -- Mr. Yin is saying that Treasury now, not Congress back in 1986, is essaying this "backdoor way of providing aid to banks."]

Reporter Paley did find "several tax lawyers, all of whom represent banks," who think Treasury action of Sept. 30 was legal. But "more than a dozen tax lawyers interviewed for this story -- including several representing banks that stand to reap billions from the change -- said the Treasury had no authority to issue the notice."

The guidance issued from the IRS caught even some of the closest followers of tax law off guard because it seemed to come out of the blue when Treasury's work seemed focused almost exclusively on the bailout.

"It was a shock to most of the tax law community. It was one of those things where it pops up on your screen and your jaw drops," said Candace A. Ridgway, a partner at Jones Day, a law firm that represents banks that could benefit from the notice. "I've been in tax law for 20 years, and I've never seen anything like this."

As if the whole thing didn't smell bad enough, there is additional concern over the timing of the administrative change:

The notice was released on a momentous day in the banking industry. It not only came 24 hours after the House of Representatives initially defeated the bailout bill, but also one day after Wachovia agreed to be acquired by Citigroup in a government-brokered deal.

The Treasury notice suddenly made it much more attractive to acquire distressed banks, and Wells Fargo, which had been an earlier suitor for Wachovia, made a new and ultimately successful play to take it over.

The Jones Day law firm said the tax change, which some analysts soon dubbed "the Wells Fargo Ruling," could be worth about $25 billion for Wells Fargo. Wells Fargo declined to comment for this article.

Ooh!

Iowa Sen. Chuck Grassley, ranking Republican on the Finance Committee, is reportedly "particularly outraged," and ordered his staff to get some answers from Treasury.

In an off-the-record conference call on Oct. 7, nearly a dozen Capitol Hill staffers demanded answers from [top Treasury tax policy official Eric] Solomon for about an hour. Several of the participants left the call even more convinced that the administration had overstepped its authority, according to people familiar with the conversation.

But lawmakers worried about discussing their concerns publicly. The staff of Sen. Max Baucus (D-Mont.), chairman of the Finance Committee, had asked that the entire conference call be kept secret, according to a person with knowledge of the call.

"We're all nervous about saying that this was illegal because of our fears about the marketplace," said one congressional aide, who like others spoke on condition of anonymity because of the sensitivity of the matter. "To the extent we want to try to publicly stop this, we're going to be gumming up some important deals."

So everyone is tiptoeing around, afraid even to talk too loud, let alone do anything about the rank administration abuse of power -- yet another illustration, as if it were needed, why a bailout supervised by Treasury Secretary Paulson is more likely to resemble a corporate giveaway. Which brings us back to Lee Sheppard:

Some legal experts said these under-the-radar objections mirror the objections to the congressional resolution authorizing the war in Iraq.

"It's just like after September 11. Back then no one wanted to be seen as not patriotic, and now no one wants to be seen as not doing all they can to save the financial system," said Lee A. Sheppard, a tax attorney who is a contributing editor at the trade publication Tax Analysts. "We're left now with congressional Democrats that have spines like overcooked spaghetti. So who is going to stop the Treasury secretary from doing whatever he wants?"

I'm thinking we need to get the attention of the corporate predators and their allies with a new set of laws -- or, better, not new laws, but new administrative applications of existing statutes, drawing in particular on those concerning treason and attempting to overthrow the government. You know, the sort of thing that involves the death penalty -- and maybe confiscation of all assets? Do you think that would get their attention?

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UPDATE: AND KEN ISN'T THE ONLY ONE PISSED OFF

I got a press release from California Assemblyman Ted Lieu that people angry about this latest outrage might be interested in digesting:

“Today we learned the US Treasury Department—without any apparent legal authority-- made a sweeping change to the tax code that gave US Banks a $140 billion windfall, and then tried to hide the action from Congress. This is unacceptable and undemocratic-- we live in a country of laws, not the Wild West. The Treasury Department’s action is tantamount to stealing from taxpayers. Two immediate actions must happen to restore trust and to provide justice.
 
“First, Treasury Secretary Henry Paulson should resign. Since last year, he has repeatedly misjudged the scale of the foreclosure crisis. Then he wakes up one morning and realizes we need an immediate $700 bailout, with much of that money going straight to the Wall Street firms that have been largely responsible for the financial meltdown. Now his Department has resorted to stealing from the taxpayer to benefit the banking industry. Who knows how much other damage he can cause from now until January 20th. For the good of the Department and of our nation he should resign-- he has failed us enough times. 
 
“Second, banks must give back their windfall. The best way for them to do this is by modifying loans to keep people in their homes. Since last year I and numerous consumer groups urged the banks to modify loans. We told them if they failed to modify loans and stem foreclosures, the situation was going to explode. Unfortunately, the banks failed to listen and now many of them have disintegrated. The remaining banks still standing and who have received this windfall should immediately give it back by using the windfall money to help modify loans and prevent further foreclosures.
 
“California stands to benefit from the banks giving back their windfall because one-third of the nation’s foreclosures occur in California. It is time the banks start giving back to the state that has in the past given them so much profit. It is time for the banks to help taxpayers, rather than take from taxpayers.”

A DWT shout-out to Nobel laureate Paul Krugman

Vice President Cheney looks on approvingly as Chimpy the Prez issues a hearty "Well done" in response to news that Paul Krugman has won this year's economics Nobel. (No, not really -- we're just making up the part about Chimpy and Big Dick. But we'd sure love to have seen their pusses when they heard!)

"The moral of this story is that failure to regulate effectively isn’t just bad for consumers, it’s bad for business."

-- Paul Krugman, in a June NYT column
called "Bad Cow Disease"

"At a deep level, I believe that the problem was ideological: policy makers, committed to the view that the market is always right, simply ignored the warning signs."

--Paul Krugman, in a December NYT column
called "Innovating Our Way to Financial Crisis"

by Ken

By now you've no doubt heard the news that Paul Krugman has been awarded this year's Nobel Price in economics, "for his analysis of trade patterns and location of economic activity."

The Royal Swedish Academy of Sciences explains the award of what is officially called The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008:

International Trade and Economic Geography

Patterns of trade and location have always been key issues in the economic debate. What are the effects of free trade and globalization? What are the driving forces behind worldwide urbanization? Paul Krugman has formulated a new theory to answer these questions. He has thereby integrated the previously disparate research fields of international trade and economic geography.

Krugman's approach is based on the premise that many goods and services can be produced more cheaply in long series, a concept generally known as economies of scale. Meanwhile, consumers demand a varied supply of goods. As a result, small-scale production for a local market is replaced by large-scale production for the world market, where firms with similar products compete with one another.

Traditional trade theory assumes that countries are different and explains why some countries export agricultural products whereas others export industrial goods. The new theory clarifies why worldwide trade is in fact dominated by countries which not only have similar conditions, but also trade in similar products -- for instance, a country such as Sweden that both exports and imports cars. This kind of trade enables specialization and large-scale production, which result in lower prices and a greater diversity of commodities.

Economies of scale combined with reduced transport costs also help to explain why an increasingly larger share of the world population lives in cities and why similar economic activities are concentrated in the same locations. Lower transport costs can trigger a self-reinforcing process whereby a growing metropolitan population gives rise to increased large-scale production, higher real wages and a more diversified supply of goods. This, in turn, stimulates further migration to cities. Krugman's theories have shown that the outcome of these processes can well be that regions become divided into a high-technology urbanized core and a less developed "periphery".

Got that? (I'm sorry to have to report that you're responsible for all this material on the midterm.)

We're reminded, of course, that the Nobel is awarded, not for the work we're familiar with, but for this important work done mostly before he entered the current phase of his career, in which he came to be known as perhaps the single most important media voice for political sanity through the darkest years of the Bush regime.

When I heard the Nobel news, the first thing I thought of was the look on "Big Dick" Cheney's and Chimpy the Prez's pusses when they heard the news. Of course by now Big Dick and Chimpy have shrunk to little more than a historical footnote, one that should read something like this:

Between January 2001 and January 2009 they not only won but permanently retired the award for Worst Presidential Administration in the History of the Republic. About all that's left for them is to see how much loot they can still cart off, for themselves and on behalf of their cronies, and all the totalitarian and ideologically extremist rules, regulations, and appointees they can ram into the system in their way out.

So while it's not as sweet as it once might have been, there's still something mighty satisfying about Krugman receiving the Nobel just as Cheney and Chimpy are sliding onto their places on the Dunce Chairs of History. It's just the tiniest sense of order in the universe.

Oh sure, I make fun of all the vacation days the bum takes off from his column-writing. (Really, now, how long does it take to type 750 words?) And if I ever had a job that involved a contract, I'd want written into that contract that I get all "Krugman days" off. The fact remains that Krugman columns have been quoted so often in DWT that the guy is practically and involuntary (and unpaid -- which, come to think of it, means he's on the same pay scale as the rest of us) co-conspirator.

But through the darkest years of the Bush regime, the first term, in which the media conspired to such a large degree with the regime to brand any dissent from regime dogma as unpatriotic, even traitorous, I can't begin to convey how much I depended on Krugman's usually lonely twice-weekly voice of sanity. Through that darkest period of my political life, there was our Paul, and his Sunday NYT colleague Frank Rich, and The Daily Show With Jon Stewart, and eventually Air America Radio, whose potential would never be realized but which offered a roster of hard-hitting, no-bullshit on-air hosts and its best demonstration of what that promise could be in the zany and outrageous morning show, Morning Sedition.

As the story of the Bush regime turned from its extremist ideology and war-mongering to its criminal incompetence, pervasive corruption, and constitutional mayhem, our Paul's economics background came more and more into play. While Alan Greenspan, the Moe of establishment economics stooges, was still saying, "Housing bubble? What housing bubble?," Paul was trying to warn us, to prepare us, for pretty much what has happened.

In the next day or two I want to come back to the specific substantive importance of Paul's contributions, but for now I'm getting a helluva kick out of listening to the right-wingers squeal like stuck pigs about his Nobel.

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