Can Schumer And Trump Hammer Out A Bipartisan Infrastructure Approach While McConnell And Ryan Jeer From The Sidelines?

Trump gave us a glimpse of his idea of infrastructure yesterday when he signed executive orders to re-start the approval process for the Keystone XL Pipeline, for the Dakota pipeline, to rush through environmental reviews and to reduce regulations. Trump touted the Keystone XL as a job creator, although he didn't mention that it will create only 35 or so permanent jobs. This is no way to get a serious infrastructure initiative off the ground. Congressional Democrats are eager to work with him on implementing an infrastructure plan that make sense and, in fact, yesterday's NY Times reported on their trillion dollar proposal, a proposal they are hopeful Trump will embrace. Schumer, who voted with the Republicans Monday night to confirm Trump's horrific nominee to head the CIA, Mike Pompeo, was happy to pontificate a few hours later: "From our largest cities to our smallest towns, communities across the country are struggling to meet the challenges of aging infrastructure. Our urban and rural communities have their own unique set of infrastructure priorities, and this proposal would provide funding to address those needed upgrades that go beyond the traditional road and bridge repair... We’re asking President Trump to work with us to make it a reality."

Republicans resisted President Barack Obama’s push for an infrastructure “surge” for eight years, arguing that the federal government couldn’t afford it and that state and local governments should shoulder more responsibility for improvements. But Mr. Trump has taken up the Democratic cause.

“We will build new roads, and highways, and bridges, and airports, and tunnels, and railways all across our wonderful nation,” he vowed in his Inaugural Address.

The plan dedicates $180 billion to rail and bus systems, $65 billion to ports, airports and waterways, $110 billion for water and sewer systems, $100 billion for energy infrastructure, and $20 billion for public and tribal lands.

The bill that Schumer unveiled yesterday spreads the trillion dollars out over 10 years to repair bridges and roads, expand and improve public transport and port facilities and modernize the electrical grid, airports, schools, sewer systems, etc. Democrats want to spend public money to accomplish these goals while Trump's advisors want to offer corporations billions in tax breaks to do the work. His plan, for example, abandons the idea of free roads and bridges and allows private companies to build tollways instead. It's the polar opposite of what Eisenhower accomplished with the highway system but it's what Pence, Ryan, McConnell and Trump's reactionary cabinet are all pushing for.

Late yesterday Elizabeth Warren told her supporters that "Democrats have proposed a new infrastructure blueprint that would create over 15 million jobs and rebuild our crumbling infrastructure-- including through investments in clean energy and modernizing our electric grid-- and we welcome President Trump and congressional Republicans to join us to create jobs now and to build a future that makes the US more competitive. But instead, President Trump today issued executive orders to advance construction of the Keystone XL and Dakota Access pipelines, pitting hardworking Americans against our climate and the protection of tribal lands. The Obama Administration rejected the Keystone XL Pipeline in part because it would 'undermine our ability to continue leading the world in combatting climate change.' And just last week, the U.S. Army Corps of Engineers took steps to prepare a new Environmental Impact Statement for the Dakota pipeline with 'full public input and analysis.' The impact of these pipelines on our environment, and on the communities they cut through, did not change when President Obama left office. President Trump's announcement today moves us in the wrong direction for our environment and our economy."

The immediate common ground between Trump and the Democrats is the Buy American concept both embrace for infrastructure building. While Ryan and McConnell have been busy removing Buy American provisions from spending bills, the Democrats say they are sticking to their guns on this and Trump (at least so far) claims he favors Buy American provisions as well. He can probably easily force Ryan and McConnell to back down. Senator Chris Murphy (D-CT) sent Trump a letter explaining what getting serious about Buy American means. The letter outlines his vision for accountability when it comes to federal spending, asking for a watchdog, regular audits, and limits on waivers all related to the Buy American provisions.

The problem is that McConnell and Ryan oppose using taxes to build or improve infrastructure and that Trump wants to do it as for-profit boondoggles to enrich developers. " Schumer said that "During his campaign, President Trump talked often about a big and bold infrastructure package. Well, this is one of the most comprehensive overhaul proposals in a generation, and we’re challenging President Trump to work with us on this broad plan that will sustain our positive economic growth, create millions of jobs, and build a modern economy." My guess is that Trump would be willing to make a deal with Schumer and it will be certainly interesting to see what these two crooks come up with that the congressional Republicans will back. By the way, Democrats estimate their plan would create 15 million jobs. Here's the view from the crackpot dogmatic right:

Self Harm-- A New Political Goal To Contend With... From Brexit To Trumpism

Perhaps Jeremy Corbyn genuinely thought he could bring all factions of the Labour Party together or perhaps he felt he just didn't have the power to cast the Blairites out, but after he was elected party leader, he formed a shadow cabinet filled with his political enemies. Now they're using Brexit and a likely snap election as excuses to oust him. The slimeball behind the effort is shadow foreign secretary Hilary Benn-- since fired-- who claims to have persuaded a majority of the shadow cabinet to resign if Corbyn doesn't step down. But if you think Brexit has roiled Labour, keep in mind the Trump-like Boris Johnson is likely to take over as Conservative Leader whose prime minister announced he's stepping down after a reaction against his austerity policies overturned the established order. And the Liberal Democrats... well they're basically launching an election campaign based on ignoring democracy itself.

Lib-Dem leader Tim Farron says they'll run on a clear platform of setting aside the Brexit results and keeping the U.K. in the E.U., calling the vote a "howl of anger at politicians and institutions who they felt they were out of touch and had let them down. The British people deserve the chance not to be stuck with the appalling consequences of a Leave campaign that stoked that anger with the lies of Farage, Johnson and Gove. The Liberal Democrats will fight the next election on a clear and unequivocal promise to restore British prosperity and role in the world, with the United Kingdom in the European Union, not out."

Now let's look at that in the light of what we've been calling at DWT "life's losers," the people with no stake in society and who hate everything, even their own families and themselves, i.e.-- an average Trump supporter. Don't say it can't happen here-- it can, especially with a candidate as disliked and mistrusted as Hillary Clinton as the alternative-- and playing the establishment card to the hilt. British sociologist Will Davies addressed this in an essay about why so many Labour voters went for Leave.

One of the most insightful things I saw in the run-up to the referendum was this video produced by openDemocracy’s Adam Ramsey and Anthony Barnett discussing their visit to Doncaster, another Labour heartland. They chose Doncaster because it looked set to be a strong pro-Leave location, and wanted to understand what was at work in this. Crucially, they observed that-- in strong contrast to the Scottish ‘Yes’ movement-- Brexit was not fuelled by hope for a different future. On the contrary, many Leavers believed that withdrawing from the EU wouldn’t really change things one way or the other, but they still wanted to do it. I’ve long suspected that, on some unconscious level, things could be even stranger than this: the self-harm inflicted by Brexit could potentially be part of its appeal. It is now being reported that many Leave voters are aghast at what they’ve done, as if they never really intended for their actions to yield results.

This taps into a much broader cultural and political malaise, that also appears to be driving the rise of Donald Trump in the US. Amongst people who have utterly given up on the future, political movements don’t need to promise any desirable and realistic change. If anything, they are more comforting and trustworthy if predicated on the notion that the future is beyond rescue, for that chimes more closely with people’s private experiences. The discovery of the ‘Case Deaton effect’ in the US (unexpected rising mortality rates amongst white working classes) is linked to rising alcohol and opiate abuse and to rising suicide rates. It has also been shown to correlate closely to geographic areas with the greatest support for Trump. I don’t know of any direct equivalent to this in the UK, but it seems clear that-- beyond the rhetoric of ‘Great Britain’ and ‘democracy’-- Brexit was never really articulated as a viable policy, and only ever as a destructive urge, which some no doubt now feel guilty for giving way to.

Thatcher and Reagan rode to power by promising a brighter future, which never quite materialised other than for a minority with access to elite education and capital assets. The contemporary populist promise to make Britain or American ‘great again’ is not made in the same way. It is not a pledge or a policy platform; it’s not to be measured in terms of results. When made by the likes of Boris Johnson, it’s not even clear if it’s meant seriously or not. It’s more an offer of a collective real-time halucination, that can be indulged in like a video game.

The Remain campaign continued to rely on forecasts, warnings and predictions, in the hope that eventually people would be dissuaded from ‘risking it’. But to those that have given up on the future already, this is all just more political rhetoric. In any case, the entire practice of modelling the future in terms of ‘risk’ has lost credibility, as evidenced by the now terminal decline of opinion polling as a tool for political control.

One of the complaints made most frequently by liberal commentators, economists and media pundits was that the referendum campaign was being conducted without regard to ‘truth’. This isn’t quite right. It was conducted without adequate regard to facts. To the great frustration of the Remain campaign, their ‘facts’ never cut through, whereas Leave’s ‘facts’ (most famously the £350m/week price tag of EU membership) were widely accepted.

...In place of facts, we now live in a world of data. Instead of trusted measures and methodologies being used to produce numbers, a dizzying array of numbers is produced by default, to be mined, visualised, analysed and interpreted however we wish. If risk modelling (using notions of statistical normality) was the defining research technique of the 19th and 20th centuries, sentiment analysis is the defining one of the emerging digital era. We no longer have stable, ‘factual’ representations of the world, but unprecedented new capacities to sense and monitor what is bubbling up where, who’s feeling what, what’s the general vibe.

As rightist David Stockman wrote over the weekend, Bravo Brexit-- "the tyranny of the global financial elite has been slammed good and hard... The central bankers and their compatriots at the EU, IMF, White House/Treasury, OECD, G-7 and the rest of the Bubble Finance apparatus have well and truly over-played their hand. They have created a tissue of financial lies; an affront to the very laws of markets, sound money and capitalist prosperity... On the immediate matter of Brexit, the British people have rejected the arrogant rule of the EU superstate and the tyranny of its unelected courts, commissions and bureaucratic overlords. As Donald Trump was quick to point out, they have taken back their country. He urges that Americans do the same, and he might just persuade them."

Job Creation Isn't The Same As Vulture Capitalism

Romney is an experienced businessman

I doubt that former Reagan Budget Director David Stockman wrote the headline, but the Newsweek article he penned is titled Mitt Romney: The Great Deformer. And if Stockman didn't write the headline, he sure wrote all the reasoning behind it. Last we touched bases with Mr. Stockman was in March when he appeared with Bill Moyers to announce that we've learned no lessons about the dangers of crony capitalism. As every Republican running for office continues to pledge undying fealty to Ronald Reagan, they are willfully forgetting the uncomfortable lesson Reagan found out when he tried the trickle down economics being pushed again today by Paul Ryan and the rest of the GOP hierarchy-- charlatans and flimflam men whose electoral careers are being underwritten by the banksters, the oil companies, the Military Industrial Complex and the insurance companies. When Stockman talks about the financialization of the economy-- and how that produces nothing of value at all-- he sounds almost like David Korten, the economist who most represents the ideas behind the Occupy/99% Movement.

Stockman, a former congressman from Michigan, talked with Moyers about the problems inherent in a Congress financed by special interests. He advocates banning corporate contributions entirely-- and putting a $100 cap on individual contributions. A different kind of Republican than the kind we're hearing about these days, huh? He was very candid with Moyers about how money dominates politics, distorting free markets and endangering democracy: “As a result we have neither capitalism nor democracy. We have crony capitalism.” He shared details on how the courtship of politics and high finance have turned our economy into a private club that rewards the super-rich and corporations, leaving average Americans wondering how it could happen and who’s really in charge. “We now have an entitled class of Wall Street financiers and of corporate CEOs who believe the government is there to do… whatever it takes in order to keep the game going and their stock price moving upward,” Stockman told Moyers.

So when I saw the "Great Deformer" article he had done for Newsweek I was eager to read it. And he didn't disappoint me. "Bain Capital," he wrote, "is a product of the Great Deformation. It has garnered fabulous winnings through leveraged speculation in financial markets that have been perverted and deformed by decades of money printing and Wall Street coddling by the Fed. So Bain’s billions of profits were not rewards for capitalist creation; they were mainly windfalls collected from gambling in markets that were rigged to rise." They use a model of antisocial predation that Romney set up and Romney boasts that his experience at Bain is what qualifies him to be president. He claims to have been an incredibly successful "businessman" and that that someone will make him a great president.

Except Mitt Romney was not a businessman; he was a master financial speculator who bought, sold, flipped, and stripped businesses. He did not build enterprises the old-fashioned way-- out of inspiration, perspiration, and a long slog in the free market fostering a new product, service, or process of production. Instead, he spent his 15 years raising debt in prodigious amounts on Wall Street so that Bain could purchase the pots and pans and castoffs of corporate America, leverage them to the hilt, gussy them up as reborn “roll-ups,” and then deliver them back to Wall Street for resale-- the faster the better.

That is the modus operandi of the leveraged-buyout business, and in an honest free-market economy, there wouldn’t be much scope for it because it creates little of economic value. But we have a rigged system—a regime of crony capitalism-- where the tax code heavily favors debt and capital gains, and the central bank purposefully enables rampant speculation by propping up the price of financial assets and battering down the cost of leveraged finance.

So the vast outpouring of LBOs in recent decades has been the consequence of bad policy, not the product of capitalist enterprise. I know this from 17 years of experience doing leveraged buyouts at one of the pioneering private-equity houses, Blackstone, and then my own firm. I know the pitfalls of private equity. The whole business was about maximizing debt, extracting cash, cutting head counts, skimping on capital spending, outsourcing production, and dressing up the deal for the earliest, highest-profit exit possible. Occasionally, we did invest in genuine growth companies, but without cheap debt and deep tax subsidies, most deals would not make economic sense.

In truth, LBOs are capitalism’s natural undertakers-- vulture investors who feed on failing businesses. Due to bad policy, however, they have now become monsters of the financial midway that strip-mine cash from healthy businesses and recycle it mostly to the top 1 percent.

The waxing and waning of the artificially swollen LBO business has been perfectly correlated with the bubbles and busts emanating from the Fed-- so timing is the heart of the business. In that respect, Romney’s tenure says it all: it was almost exactly coterminous with the first great Greenspan bubble, which crested at the turn of the century and ended in the thundering stock-market crash of 2000-02. The credentials that Romney proffers as evidence of his business acumen, in fact, mainly show that he hung around the basket during the greatest bull market in recorded history.

Needless to say, having a trader’s facility for knowing when to hold ’em and when to fold ’em has virtually nothing to do with rectifying the massive fiscal hemorrhage and debt-burdened private economy that are the real issues before the American electorate. Indeed, the next president’s overriding task is restoring national solvency-- an undertaking that will involve immense societywide pain, sacrifice, and denial and that will therefore require “fairness” as a defining principle. And that’s why heralding Romney’s record at Bain is so completely perverse. The record is actually all about the utter unfairness of windfall riches obtained under our anti-free market regime of bubble finance.

Stockman goes on, in great depth, to prove that Bain's record of self-proclaimed greatness is about "a dangerous form of leveraged gambling that has been enabled by the failed central banking and taxing policies of the state. That it should be offered as evidence that Mitt Romney is a deeply experienced capitalist entrepreneur and job creator is surely a testament to the financial deformations of our times." And that anyone is buying it-- other than the Republican base-- is an even worse testament to the health of our democracy.

Remember Trickle-Down? Supply Side? Voodoo Economics? These Days They Call It Austerity-- And It Works No Better Under Its Latest Moniker

Successful car thief-turned-congressman Darrell Issa, was tweeting away yesterday, digitally yammering about all the legislation he's voted for over the past decade that has destroyed the middle class is somehow President Obama's fault. I 'm not singling out Issa. He isn't any different from any of his delusional right-wing colleagues. When they're not complaining about Jimmy Carter or lionizing Bill Clinton-- who almost all of them (including Issa) voted to impeach-- they're trying to blame the results of the Bush/Republican Party economic agenda on President Obama. Or they say he hasn't fixed the problems they caused fast enough... as they plot to reinstate the policies that brought on the greatest economic collapse of most of our lives.


Inconveniently for Issa and his cronies, though, the Wall Street Journal ran a different kind of analysis not long ago (and still accessible online)-- one explaining why former Ronald Reagan Budget Director David Stockman says his own party, the Republicans, destroyed the U.S. economy. Stockman was a conservative Michigan congressman before Reagan made him Director of the Office of Management and Budget in 1981. He was an avatar of supply-side economics-- even though he caught on pretty quickly that trickle-down economics wasn't going to help anyone but the very rich. His post-Reagan career has been mostly one of failed investment schemes and an indictment for defrauding investors. About a year ago he had a short brush with fame again when he was quoted saying "The Republican Party has totally abdicated its job in our democracy, which is to act as the guardian of fiscal discipline and responsibility. They're on an anti-tax jihad-- one that benefits the prosperous classes." Paul Farrell piece for MarketWatch predates that:

"How my G.O.P. destroyed the U.S. economy." Yes, that is exactly what David Stockman, President Ronald Reagan's director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, Four Deformations of the Apocalypse.

Get it? Not "destroying." The GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse."

Yes, Stockman is equally damning of the Democrats' Keynesian policies. But what this indictment by a party insider-- someone so close to the development of the Reaganomics ideology-- says about America, helps all of us better understand how America's toxic partisan-politics "holy war" is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish.

But why focus on Stockman's message? It's already lost in the 24/7 news cycle. Why? We need some introspection. Ask yourself: How did the great nation of America lose its moral compass and drift so far off course, to where our very survival is threatened?

We've arrived at a historic turning point as a nation that no longer needs outside enemies to destroy us, we are committing suicide. Democracy. Capitalism. The American dream. All dying. Why? Because of the economic decisions of the GOP the past 40 years, says this leading Reagan Republican.

...Stockman rushes into the ring swinging like a boxer: "If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation's public debt ... will soon reach $18 trillion." It screams "out for austerity and sacrifice." But instead, the GOP insists "that the nation's wealthiest taxpayers be spared even a three-percentage-point rate increase."

In the past 40 years Republican ideology has gone from solid principles to hype and slogans. Stockman says: "Republicans used to believe that prosperity depended upon the regular balancing of accounts-- in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses too."

No more. Today there's a "new catechism" that's "little more than money printing and deficit finance, vulgar Keynesianism robed in the ideological vestments of the prosperous classes" making a mockery of GOP ideals. Worse, it has resulted in "serial financial bubbles and Wall Street depredations that have crippled our economy." Yes, GOP ideals backfired, crippling our economy.

...Stockman continues pounding away: "The third ominous change in the American economy has been the vast, unproductive expansion of our financial sector." He warns that "Republicans have been oblivious to the grave danger of flooding financial markets with freely printed money and, at the same time, removing traditional restrictions on leverage and speculation." Wrong, not oblivious. Self-interested Republican loyalists like Paulson, Bernanke and Geithner knew exactly what they were doing.

They wanted the economy, markets and the government to be under the absolute control of Wall Street's too-greedy-to-fail banks. They conned Congress and the Fed into bailing out an estimated $23.7 trillion debt. Worse, they have since destroyed meaningful financial reforms. So Wall Street is now back to business as usual blowing another bigger bubble/bust cycle that will culminate in the coming "American Apocalypse."

Stockman refers to Wall Street's surviving banks as "wards of the state." Wrong, the opposite is true. Wall Street now controls Washington, and its "unproductive" trading is "extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives." Wall Street banks like Goldman were virtually bankrupt, would have never survived without government-guaranteed deposits and "virtually free money from the Fed's discount window to cover their bad bets."

Finally, thanks to Republican policies that let us "live beyond our means for decades by borrowing heavily from abroad, we have steadily sent jobs and production offshore," while at home "high-value jobs in goods production ... trade, transportation, information technology and the professions shrunk by 12% to 68 million from 77 million."

As the apocalypse draws near, Stockman sees a class-rebellion, a new revolution, a war against greed and the wealthy. Soon. The trigger will be the growing gap between economic classes: No wonder "that during the last bubble (from 2002 to 2006) the top 1% of Americans-- paid mainly from the Wall Street casino-- received two-thirds of the gain in national income, while the bottom 90%-- mainly dependent on Main Street's shrinking economy-- got only 12%. This growing wealth gap is not the market's fault. It's the decaying fruit of bad economic policy."

Get it? The decaying fruit of the GOP's bad economic policies is destroying our economy.

Ryan and Issa and Romney have no idea how to answer this kind of critique and no idea how to move forward from it. Progressive Democrats certainly do and Prosperity Economics, the antidote to their latest trickle-down/voodoo theory, explains it step by step. Santa Clarita surgeon Lee Rogers, running for a seat currently occupied by Voodoo Warrior Buck McKeon is one of the 16 progressive challengers backing Professor Jacob Hacker's program for the renewal of American Prosperity. Roger's own website statement on the deficit sounds like he's paid close attention o both Hacker and Stockman:

Irresponsible spending by politicians has created our fiscal crisis. Congressional inaction and grandstanding creates uncertainty that makes markets cautious. Investors don’t trust that Washington will be able to resolve our fiscal crisis in a manner that will prevent a worsening recession. We need to send people to Washington who will work together to fix the economy and not wait until the last minute, when things are on the brink of collapse, before acting.

We all know you can’t spend more money than you bring in. Through taxes and other income sources, Washington brings in about $6.9 billion every day and spends about $10.5 billion. In 2011, the government spent about $1.27 trillion more than it made.

This imbalance must be repaired. Now, some in Washington want the burden of paying off the deficit to fall on the shoulders of the middle class and the poor.

We can’t let Medicare lose out to corporate tax breaks and subsidies for the richest companies. We can’t let defense spending on wars, which we’ve already won, threaten the future of Social Security. We shouldn’t let foreign aid to rich nations keep us from providing healthcare to our own poor.

Reducing the deficit is important, but it shouldn’t be done at the expense of growth in America. In order to grow, we need to invest in our own country’s infrastructure. The World Economic Forum ranked US infrastructure at 24th out of 142 nations, a downgrade from 10th five years ago. Infrastructure (which includes transportation, energy, water/waste management, and communications) is paramount to US prosperity and global competitiveness. These serious deficits in our infrastructure are already having dire effects on the economy and on our safety.

Financing infrastructure should not be seen as an expense, but an investment that will have far-reaching beneficial effects beyond just the short-term job growth it causes.

...[W]e face a different threat from within: a runaway defense budget that threatens the fiscal security of our nation. Our civilian leaders who govern the defense budget don’t know how to reduce spending as our overseas obligations approach the projected reductions. We have our budgeted defense spending and our war spending, which is not budgeted. We’ve spent nearly $1.3 trillion on wars since 2001, adding it directly to our deficit. We have achieved our objectives in the conflicts in Iraq and Afghanistan and should make steps to immediately end the wars and bring our troops home.

Budgeted defense spending is being subject to automatic reductions since Congress failed to achieve agreements on deficit reduction. However, the reductions are not really reductions at all, but rather a slower rate of growth. Defense spending will only increase by 16% over the next 10 years, instead of 23%. Some defense hawks in Congress have made outrageous claims to avoid the slow down, such as that our military will be at pre-WWI levels, or that we’ll have to bring back the draft. We can reduce defense spending while still remaining vigilant to emerging and changing threats.

We don’t need to spend money on engines for planes with canceled contracts, for unneeded technologies, or to maintain some of our 700 military bases around the world. The US spends more on defense than every other nation on the planet combined. We can keep necessities, cut waste, save money, and be more secure.

Please consider contributing to the election efforts of Lee and other pro-Prosperity Democrats at the Americans For REAL Prosperity ActBlue page. Even Republican David Stockman admits the alternative is very, very bleak.

David Stockman: "We've Learned No Lessons"

Liberals like and admire Bill Moyers-- a lot. But this episode with Stockman (above) isn't going to offer comfort or solace to Democratic Beltway Insiders any more than it will please Republican Beltway Insiders. It's all about how crony capitalism is eating the country from the inside. As every Republican running for office continues to pledge undying fealty to Ronald Reagan, they are willfully forgetting the uncomfortable lesson Reagan found out when he tried the trickle down economics being pushed again today by Paul Ryan and the rest of the GOP hierarchy-- charlatans and flimflam men whose electoral careers are being underwritten by the banksters, the oil companies, the Military Industrial Complex and the insurance companies.

When Reagan's budget director, David Stockman, talks about the financialization of the economy-- and how that produces nothing of value at all-- he sounds almost like David Korten, the economist who most represents the ideas behind the Occupy/99% Movement. Listen to disillusioned Republican Stockman above with Moyers. Here's disillusioned Democrat Korten from his book Agenda For A New Economy:

Wall Street is a world of pure finance in the business of using money to make money by whatever means for people who have money. Any involvement in the production of real good and services is purely an incidental byproduct. Maximizing financial return is the game. To that end, Wall Street institutions have perfected the arts of financial speculation, corporate-asset stripping, predatory lending, risk shifting, leveraging, and debt-pyramid creation. Successful players are rewarded with celebrity, extravagant perks, and vast financial fortunes.

Wall Street players justify their actions with the claim that they are creating wealth for the benefit of society, a convenient bit of self-delusion...

The term free market is a code word for an unregulated market that allows the rich to consume and monopolize resources for personal gain free from accountability for the broader social and environmental consequences. A free market rewards financial rogues and speculators [think Romney and Bain, in fact keep them in mind for the rest of this post] who profit from government, social, and environmental subsidies, speculation, the abuse of monopoly power, and financial fraud, creating an open and often irresistible invitation to externalize costs and increase inequality.

Last week Moyers and Stockman explored the tight connection between Wall Street and our governing elites in DC, particularly in the White House-- although Stockman, a former congressman from Michigan, also gets into the problem inherent in a Congress financed by special interests. He advocates banning corporate contributions entirely-- and putting a $100 cap on individual contributions. A different kind of Republican than the kind we're hearing about these days, huh? He's very candid with Moyers about how money dominates politics, distorting free markets and endangering democracy: “As a result we have neither capitalism nor democracy. We have crony capitalism.” He shares details on how the courtship of politics and high finance have turned our economy into a private club that rewards the super-rich and corporations, leaving average Americans wondering how it could happen and who’s really in charge. “We now have an entitled class of Wall Street financiers and of corporate CEOs who believe the government is there to do… whatever it takes in order to keep the game going and their stock price moving upward,” Stockman tells Moyers. Watch it all the way through. It's riveting stuff.

Former Secretary of Labor Robert Reich takes a more direct approach to the lessons we haven't learned-- a surtax on the super wealthy.

Let Santorum and Romney duke it out for who will cut taxes on the wealthy the most and shred the public services everyone else depends on.

The rest of us ought to be having a serious discussion about a wealth tax. Because if you really want to know what’s happening to the American economy you need to look at household wealth-- not just incomes.

The Fed just reported that household wealth increased from October through December. That’s the first gain in three quarters.

Good news? Take closer look. The entire gain came from increases in stock prices. Those increases in stock values more than made up for continued losses in home values.

But the vast majority of Americans don’t have their wealth in the stock market. Over 90 percent of the nation’s financial assets-- including stocks and pension-fund holdings-- are owned by the richest 10 percent of Americans. The top 1 percent owns 38 percent.

Most Americans have their wealth in their homes-- whose prices continue to drop. Housing prices are down by a third from their 2006 peak.

So as the value of financial assets held by American households increased by $1.46 trillion in the fourth quarter, the wealthiest 10 percent of Americans became $1.3 trillion richer, and the wealthiest 1 percent became $554.8 billion richer.

But at the same time, as the value of household real estate fell by $367.4 billion in the fourth quarter, homeowners – mostly middle class-- lost over $141 billion (owners’ equity is 38.4 percent of total household real estate).

Presto. America’s wealth gap-- already wider than the nation’s income gap-– has become even wider. The 400 richest Americans have more wealth than the bottom 150 million Americans put together.

Given this unprecedented concentration of wealth-- and considering what the nation needs to do to rebuild our schools and infrastructure while at the same time saving Medicare and reducing the long-term budget deficit-- shouldn’t we be aiming higher than a “Buffet tax” on the incomes of millionaires?

There should also be a surtax on the super rich.

There probably isn't a more dedicated progressive running for Congress anywhere in the country than Norman Solomon. I know that sounds like quite the statement. But I mean it. Earlier today I talked with him about what Stockman and Reich had to say about crony capitalism and how these policies are effecting our democracy. His response will help you understand why Blue America endorsed him and why we're so enthusiastic about his race against a bunch of garden variety Democratic hacks (nice ones, I'm sure). Please help us get Norman to the $10,000 mark with as small or large a contribution as you can afford for someone who will actually be able to replace Lynn Woolsey and Dennis Kucinich in Congress.

What's at stake is democracy-- rule by the people, as opposed to rule by big money. But I will be blunt here: Progressives must take much more seriously the necessity of gaining electoral power for the 99 percent. While we may often say and write very perceptive things, government continues to largely function in the service of large corporate interests. As an antidote to the poison of "corporate personhood," we've got to nurture genuine grassroots campaigns that are infused with progressive values.

That's what my campaign for Congress is about. We already have 850 volunteers, 3,800 individual donors and tremendous momentum, while I refuse to take a dime of corporate PAC money. In this "grassroots vs. AstroTurf campaign," voting begins in less than 60 days for an open seat in the new coastal district north of the Golden Gate Bridge. Right now, time is of the essence. How many lawn signs and brochures will our campaign be able to afford as we go to the printer later this month? In a significant way, that's up to you.

John Boehner, Paul Ryan, Eric Cantor... President Eisenhower Has Something He Wants To Tell You Boys

Dwight Eisenhower broke the Democrats' two-decades-long hold on the White House in 1953 when John Boehner was just 4 years old. But when Boehner was 5, Eisenhower wrote something young John B. probably missed but might do well to go back and read today. Eric Cantor wouldn't be born for another full decade, and Paul Ryan... well, not only hadn't he read any of the Ayn Rand books that shaped his stilted intellectual development-- his bible, Atlas Shrugged, wasn't published until 1957-- he had almost two decades to go before being birthed. The source of this quote from President Eisenhower I'm recommending to our Republican friends is his presidential papers, Document #1147, November 8, 1954:

Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are a few Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.

Now David Stockman is more of Boehner's generation, just a couple years his elder. In fact, Stockman was elected to Congress from Michigan in 1976 and served until being appointed Director of the Office of Management and Budget by Ronald Reagan in 1981. He was considered a radical supply-sider, devoted his years in office to dismantling "the welfare state," and his known for his economic mumbo-jumbo-- even he admitted "trickle down" was just a ruse to bring down the tax rate for the wealthiest Americans, and was quoted saying, "None of us really understands what's going on with all these numbers," very much a Paul Ryan of his day.

This weekend Stockman wrote an OpEd for the NY Times. I know Boehner brags that he doesn't ever read anything by economists, but I bet Cantor and Ryan saw this... and flipped out. He blames, not just Bush, but Republican ideology for the economic catastrophe we find ourselves in.

If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt-- if honestly reckoned to include municipal bonds and the $7 trillion of new deficits baked into the cake through 2015-- will soon reach $18 trillion. That’s a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.

More fundamentally, Mr. McConnell’s stand puts the lie to the Republican pretense that its new monetarist and supply-side doctrines are rooted in its traditional financial philosophy. Republicans used to believe that prosperity depended upon the regular balancing of accounts-- in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too. But the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance-- vulgar Keynesianism robed in the ideological vestments of the prosperous classes.

This approach has not simply made a mockery of traditional party ideals. It has also led to the serial financial bubbles and Wall Street depredations that have crippled our economy. More specifically, the new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one.

The first of these started when the Nixon administration defaulted on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world. Now, since we have lived beyond our means as a nation for nearly 40 years, our cumulative current-account deficit-- the combined shortfall on our trade in goods, services and income-- has reached nearly $8 trillion. That’s borrowed prosperity on an epic scale.

[...]

Soon, the neocons were pushing the military budget skyward. And the Republicans on Capitol Hill who were supposed to cut spending exempted from the knife most of the domestic budget-- entitlements, farm subsidies, education, water projects. But in the end it was a new cadre of ideological tax-cutters who killed the Republicans’ fiscal religion.

Through the 1984 election, the old guard earnestly tried to control the deficit, rolling back about 40 percent of the original Reagan tax cuts. But when, in the following years, the Federal Reserve chairman, Paul Volcker, finally crushed inflation, enabling a solid economic rebound, the new tax-cutters not only claimed victory for their supply-side strategy but hooked Republicans for good on the delusion that the economy will outgrow the deficit if plied with enough tax cuts.

By fiscal year 2009, the tax-cutters had reduced federal revenues to 15 percent of gross domestic product, lower than they had been since the 1940s. Then, after rarely vetoing a budget bill and engaging in two unfinanced foreign military adventures, George W. Bush surrendered on domestic spending cuts, too-- signing into law $420 billion in non-defense appropriations, a 65 percent gain from the $260 billion he had inherited eight years earlier. Republicans thus joined the Democrats in a shameless embrace of a free-lunch fiscal policy.

The third ominous change in the American economy has been the vast, unproductive expansion of our financial sector. Here, Republicans have been oblivious to the grave danger of flooding financial markets with freely printed money and, at the same time, removing traditional restrictions on leverage and speculation. As a result, the combined assets of conventional banks and the so-called shadow banking system (including investment banks and finance companies) grew from a mere $500 billion in 1970 to $30 trillion by September 2008.

But the trillion-dollar conglomerates that inhabit this new financial world are not free enterprises. They are rather wards of the state, extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives. They could never have survived, much less thrived, if their deposits had not been government-guaranteed and if they hadn’t been able to obtain virtually free money from the Fed’s discount window to cover their bad bets.

The fourth destructive change has been the hollowing out of the larger American economy. Having lived beyond our means for decades by borrowing heavily from abroad, we have steadily sent jobs and production offshore. In the past decade, the number of high-value jobs in goods production and in service categories like trade, transportation, information technology and the professions has shrunk by 12 percent, to 68 million from 77 million. The only reason we have not experienced a severe reduction in nonfarm payrolls since 2000 is that there has been a gain in low-paying, often part-time positions in places like bars, hotels and nursing homes.

It is not surprising, then, that during the last bubble (from 2002 to 2006) the top 1 percent of Americans-- paid mainly from the Wall Street casino-- received two-thirds of the gain in national income, while the bottom 90 percent-- mainly dependent on Main Street’s shrinking economy-- got only 12 percent. This growing wealth gap is not the market’s fault. It’s the decaying fruit of bad economic policy.

If some of the Blackberry Boys want to find a despicable Republican to claim is the intellectual of the right, they might consider shying away from a blithering idiot like Paul Ryan and moving over to someone who is at least coherent, albeit incorrect (we are talking about Republicans after all)-- someone like Stockman. Besides, his whole fraud case was dropped, and he never served a day in prison. I wonder if a crook like Ryan will be able to say that when he's old enough to be collecting Social Security... that is, if he's prevented from dismantling it by then.

DAVID STOCKMAN, THE POSTERBOY FOR THE WINGNUTS' VOODOO ECONOMICS IS INDICTED FOR FRAUD

When it was first announced last September that former Reagan Budget Director David Stockman was being investigated for crooked dealing, it should have come as a surprise to no one at all. What, afterall, do crooked dealers do besides deal crookedly? In public life Stockman was always a flim-flam man, selling what Bush's father called Voodoo Economics, another Republican scheme to soft pedal their ultimate and undying ambition to make the rich richer and the rest of us... slaves. His record as Budget Director was one of abysmal failure. He spoke in terms of idealism but he didn't try to prevent his budget cuts from falling disproportionately on the poor; the GOP's wealthy paymasters proved too powerful to defeat-- not that anyone tried. Ultimately, Stockman failed to achieve budget cuts of any kind sufficient to reverse a trend toward growing deficits fed by the Reagan administration's tax cuts for the rich. Bush and the pseudo-economists he's brought into his Regime couldn't wait to take up this mantle.

Yesterday Stockman was indicted "on charges of conspiracy, securities fraud and obstruction of justice. Stockman, 60, who faces the prospect of three decades in prison, is accused of defrauding investors and banks during his stewardship" of bankrupt MI auto-parts maker Collins & Aikman.

At some point there will be enough Republican ex-congressmen in jail, no doubt awaiting pardon, to merit, at minimum, a wing in a prison, if not an entire facility. I'm sure Stockman will feel right at home with fellow far right nut cases-- also with sticky fingers-- like Duke Cunningham, Bob Ney, Tom DeLay, Jerry Lewis, Gary Miller, John Doolittle. Mr. "Trickle-Down Economics" was elected to Congress from Michigan when he was just 30 years old. He was a radical zealot for every extremist right-wing notion that came sailing down the pike. Four years later, Reagan appointed him Director of the Office of Budget and Management where he made absurd pie in the sky projections based on ideology and faith in right wing chicanery. "Reagan chastised his young budget chief [the infamous "walk to the woodshed"] for expressing doubts to a Washington Post editor about massive defense spending, tax cuts and the resulting deficits at the same time he was selling the plan to the public and the Congress. The article threw Washington into uproar and led to Stockman being jettisoned by the Reaganites. He then made his way into the private sector where he has continued a career of dishonesty and manipulation-- except this time with the purpose of lining his own pockets.