Dean Baker proposes tools for shining a light on crony corporate board directors who help inflate exec mega-salaries

"Director Watch: Putting an End to Blank Checks for CEOs"

Erskine Bowles

Martin Feldstein


"Friends don't try to save money by cutting their friends' pay. And when [corporate board] directors themselves are pocketing hundreds of thousands of dollars a year for attending 4-10 meetings, there is little incentive to take their jobs seriously."

-- Dean Baker, in "Corportate Cronyism: The Secret to Overpaid CEOs"

by Ken

In "Corportate Cronyism: The Secret to Overpaid CEOs," Dean Baker of the Center for Economic Policy Research (CEPR) tackles the subject of out-of-control executive pay, noting that "CEOs can get paychecks in the tens or hundreds of millions even when they did nothing especially notable."

They may just have been in the right place at the right time, like Lee Raymond, who "retired from Exxon-Mobil in 2005 with $321 million . . . at a time when a quadrupling of oil prices sent profits soaring." They may even have presided over their companies' tanking, like Home Depot's Bob Nardellior the financial-industry CEOs who "took their companies to the edge of bankruptcy or beyond and still walked away with hundreds of millions of dollars in their pockets."

"It's not hard," says Dean, "to write contracts that would ensure that CEO pay bears a closer relationship to the company's performance."

For example, if the value of Raymond's stock incentives at Exxon were tied to the performance of the stock of other oil companies (this can be done) then his going away package probably would not have been one-tenth as large. Also, there can be longer assessment periods so that it's not possible to get rich by bankrupting a company.

If anyone were putting a check on CEO pay, these sorts of practices would be standard, but they aren't for a simple reason. The corporate directors who are supposed to be holding down CEO pay for the benefit of the shareholders are generally buddies of the CEOs.

Corporate CEOs often have considerable input into who sits on their boards. (Some CEOs sit on the boards themselves.) They pick people who will be agreeable and not ask tough questions.

For example, corporate boards probably don't often ask whether they could get a comparably skilled CEO for lower pay, even though top executives of major companies in Europe, Japan, and South Korea earn around one-tenth as much as CEOs in the United States. Of course this is the directors' job. They are supposed to be trying to minimize what the company pays their top executives in the same way that companies try to cut costs by outsourcing production to Mexico, China, and elsewhere.

But friends don't try to save money by cutting their friends' pay. And when the directors themselves are pocketing hundreds of thousands of dollars a year for attending 4-10 meetings, there is little incentive to take their jobs seriously.

Instead we see accomplished people from politics, academia, and other sectors collecting their pay and looking the other way. For example, we have people like Erskine Bowles who had the distinction of sitting on the boards of both Morgan Stanley and General Motors in the years they were bailed out by the government. And we have Martin Feldstein, the country's most prominent conservative economist, who sat on the board of insurance giant AIG when it nearly tanked the world's financial system. Both Bowles and Feldstein were well-compensated for their "work."

Dean asks, why does it matter? And he suggests two reasons:

• "[I]t takes away money that rightfully belongs to shareholders, which include pension funds and individuals with 401(k) retirement accounts."

* "[I]t sets a pattern for pay packages throughout the economy."

When mediocre CEOs of mid-size companies can earn millions or tens of millions a year, it puts upward pressure on the pay of top executives in other sectors."

It is common for top executives of universities and private charities to earn salaries in the millions of dollars because they can point to executives of comparably sized companies who earn several times as much. Those close in line to the boss also can expect comparably bloated salaries. In other words, this is an important part of the story of inequality in the economy.

ENTER "DIRECTOR WATCH" AND "PAY PALS"

CEPR has taken two steps to shine a light on corporate-board cronyism, Dean says.

• To try to impose the checks that don't currently exist . . . CEPR has created Director Watch. This site will highlight directors like Erskine Bowles and Martin Feldstein who stuff their pockets while not performing their jobs.

• And CEPR has worked with Huffington Post "to compile a data set that lists the directors for the Fortune 100 companies, along with their compensation, the CEOs' compensation, and the companies' stock performance. This data set is now available at the Huffington Post as Pay Pals.

"Perhaps," says Dean,

a little public attention will get these directors to actually work for their hefty paychecks. The end result could be to bring a lot of paychecks for those at the top back down to earth.

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Boehner Now Appears To Be Trying To Drive The Economy Off The GOP-Manufactured Fiscal Curb

I sure hope congressional Democrats are paying attention to Robert Reich's little video above. Yesterday Boehner and his crew of sociopaths-- with Republican Senator Bob Corker's ringing endorsement on Meet the Press for "severe pain" for working families fresh in their minds-- presented President Obama with their counterproposal to avoid their ginned-up, Republican manufactured so-called "Fiscal Cliff." Short version: the thoroughly rejected Ryan Budget meets the thoroughly rejected Romney tax plan.

The Republicans are eager to increase the eligibility age for Medicare and to lower the cost-of-living hikes for Social Security recipients, exactly what the voters-- and remember, despite gerrymandering over a million more congressional race pulled the lever for a Democrat than for a Republican-- said they do not want.

The GOP plan also proposes to raise $800 billion in higher tax revenue over the decade but it would keep the Bush-era tax cuts-- including those for wealthier earners targeted by Obama-- in place for now.

...GOP aides said the plan was based on a plan floated by Erskine Bowles in testimony to the special deficit "supercommittee" last year-- in effect a milder version of the highly controversial 2010 Bowles proposal that caused both GOP and Democratic leaders in Congress to recoil.

By GOP math, the plan would produce $2.2 trillion in saving over the coming decade: $800 billion in higher taxes; $600 billion in savings from costly health care programs like Medicare; $300 billion from other proposals like forcing federal workers to contribute more toward their pensions; and $300 billion in additional savings from the Pentagon budget and domestic programs funded by Congress each year.

Under the administration's math, GOP aides said, the plan represents $4.6 trillion in 10-year savings. That estimate accounts for earlier cuts enacted during last year's showdown over lifting the government's borrowing cap and also factors in war savings and lower interest payments on the $16.4 trillion national debt.

Last week, the White House delivered to Capitol Hill its opening proposal: $1.6 trillion in higher taxes over a decade, a possible extension of the temporary Social Security payroll tax cut and heightened presidential power to raise the national debt limit.

In exchange, the president would back $600 billion in spending cuts, including $350 billion from Medicare and other health programs. But he also wants $200 billion in new spending for jobless benefits, public works projects and aid for struggling homeowners. His proposal for raising the ceiling on government borrowing would make it virtually impossible for Congress to block him going forward.

Republicans said they responded in closed-door meetings with laughter and disbelief.

Today it was conservative Democrat Erskine Bowles who was in a state of disbelief. He immediately issued a statement disavowing the letter Boehner and the GOP leadership sent to Obama:

While I'm flattered the Speaker would call something "the Bowles plan," the approach outlined in the letter Speaker Boehner sent to the President does not represent the Simpson-Bowles plan, nor is it the Bowles plan. In my testimony before the Joint Select Committee on Deficit Reduction, I simply took the mid-point of the public offers put forward during the negotiations to demonstrate where I thought a deal could be reached at that time.

The Joint Select Committee failed to reach a deal, and circumstances have changed since then. It is up to negotiators to figure out where the middle ground is today. Every offer put forward brings us closer to a deal, but to reach an agreement, it will be necessary for both sides to move beyond their opening positions and reach agreement on a comprehensive plan which avoids the fiscal cliff and puts the debt on a clear downward path relative to the economy.

The official White House response, from Communications Director Dan Pfeiffer, was less circumspect. “The Republican letter released today," he said, "does not meet the test of balance. In fact, it actually promises to lower rates for the wealthy and sticks the middle class with the bill. Their plan includes nothing new and provides no details on which deductions they would eliminate, which loopholes they will close or which Medicare savings they would achieve. Independent analysts who have looked at plans like this one have concluded that middle class taxes will have to go up to pay for lower rates for millionaires and billionaires. While the President is willing to compromise to get a significant, balanced deal and believes that compromise is readily available to Congress, he is not willing to compromise on the principles of fairness and balance that include asking the wealthiest to pay higher rates. President Obama believes-– and the American people agree-– that the economy works best when it is grown from the middle out, not from the top down. Until the Republicans in Congress are willing to get serious about asking the wealthiest to pay slightly higher tax rates, we won’t be able to achieve a significant, balanced approach to reduce our deficit our nation needs.”

Nancy Pelosi, who is busy trying to get a straight-up vote on save breaks for the first $250,000 of everyone's income, suggested the Republicans "instead of wasting the public’s time... allow a vote on the Senate-passed middle income tax cuts to strengthen middle class families, spur growth in our economy, provide certainty to small businesses, and create jobs. Democrats are filing a discharge petition, to force a vote on extending the middle income tax cut, on Tuesday at noon. There’s no time to waste.”

ABC News reported yesterday that Republicans are seriously considering a Doomsday Plan if fiscal cliff talks collapse entirely. It’s quite simple: House Republicans would allow a vote on extending the Bush middle class tax cuts (the bill passed in August by the Senate) and offer the President nothing more: no extension of the debt ceiling, nothing on unemployment, nothing on closing loopholes. Congress would recess for the holidays and the president would face a big battle early in the year over the debt ceiling.

Wall Street Kind Of Lost-- But Not Really, Of Course

Did you help elect Obama? Watch him reward Wall St. for your efforts

Wall Street certainly wanted Romney to win the presidency and, overall, backed a GOP takeover of the Senate and continued, even expanded, GOP dominance of the House of Representatives. Last Tuesday Wall Street was thwarted by the voters. But... no need for anyone there to panic-- or even frown.

The little chart from OpenSecrets.org below shows the top 5 biggest direct donors to the Romney campaign. This doesn't count the tens of millions of dollars Wall Street poured into PACs and SuperPACs supporting his campaign. Wall Street gave Romney's campaign (again, not counting outside groups) $52,108,339 and gave President Obama $18,718,167.

Wall Street, of course, gave heavily to both parties, $155,963,660 to Republicans and about half that much ($78,779,264) to the Democrats. 291 Republican candidates and 246 Democratic candidates took thinly veiled legalistic bribes from Wall Street this cycle. The Wall Street criminal bankster class has friends everywhere. Aside from Romney, Wall Street's biggest bet in Congress-- Scott Brown ($3,770,504)-- also went bust... although among the legislators for whom they forked out at least a million dollars, Brown was the only loser in either House of Congress. These 7 Republicans and 5 Democrats are well-placed to protect Wall Street's interests and further its toxic, anti-family agenda.

If Obama wanted to get "revenge," he would appoint a new Attorney General who would start drawing up indictments for the next two months and start making arrests in January. Imagine Eliot Spitzer, who Wall Street undermined and figured they have gotten out of their hair permanently. It would be a very popular move. And, more to the point, Obama could break with tradition and appoint someone Treasury Secretary who is not a pre-approved Wall Street shill and lackey for the interests who tried to defeat him and destroy his party. Imagine Paul Krugman or Robert Reich in the job-- someone looking out for the interests of America's working families and for this small businesses that are the backbone of the economy, rather than for the bottom lines of a handful of a few criminal mega-banks! What, you wonder, would Robert Reich be like as Secretary of the Treasury? Well, his ideas about a Grand Bargain, don't sound very Obama-like. They sound more like FDR:

First, raise taxes on the rich-- and by more than the highest marginal rate under Bill Clinton or even a 30 percent (so-called Buffett Rule) minimum rate on millionaires. Remember: America’s top earners are now wealthier than they’ve ever been, and they’re taking home a larger share of total income and wealth than top earners have received in over 80 years.

Why not go back sixty years when Americans earning over $1 million in today’s dollars paid 55.2 percent of it in income taxes, after taking all deductions and credits? If they were taxed at that rate now, they’d pay at least $80 billion more annually-- which would reduce the budget deficit by about $1 trillion over the next decade. That’s a quarter of the $4 trillion in deficit reduction right there.

A 2% surtax on the wealth of the richest one-half of 1 percent would bring in another $750 billion over the decade. A one-half of 1 percent tax on financial transactions would bring in an additional $250 billion.

Add this up and we get $2 trillion over ten years-- half of the deficit-reduction goal.

Raise the capital gains rate to match the rate on ordinary income and cap the mortgage interest deduction at $12,000 a year, and that’s another $1 trillion over ten years. So now we’re up to $3 trillion in additional revenue.

Eliminate special tax preferences for oil and gas, price supports for big agriculture, tax breaks and research subsidies for Big Pharma, unnecessary weapons systems for military contractors, and indirect subsidies to the biggest banks on Wall Street, and we’re nearly there.

End the Bush tax cuts on incomes between $250,000 and $1 million, and-- bingo-- we made it: $4 trillion over 10 years.

And we haven’t had to raise taxes on America’s beleaguered middle class, cut Social Security or Medicare and Medicaid, reduce spending on education or infrastructure, or cut programs for the poor.

Yesterday John Ydstie did a report on NPR about what Obama is likely to do with Treasury now that Geithner is finally leaving. Paul Krugman isn't in the cards. Neither is Joseph Stiglitz or Dean Baker.

A second term means some new Cabinet appointments for President Obama, including at the Treasury. After four pretty grueling years, Secretary Timothy Geithner has made it clear he will be leaving Washington.

White House press secretary Jay Carney said last week that Geithner would be staying on through the inauguration. He's also expected to be a "key participant" in "fiscal cliff" negotiations.

The Treasury secretary was arguably the most important Cabinet post in the first Obama administration. Secretary Geithner had wobbly banks, auto bailouts and the Great Recession on his plate. The next secretary will face big challenges too, beginning with the "fiscal cliff" and working with Republicans to craft a "grand bargain" on deficit reduction.

It's not surprising that there's been a lot of talk about Erskine Bowles as a replacement for Geithner. Bowles chaired the president's deficit reduction panel, the Simpson-Bowles commission. Speaking on Charlie Rose's show last March, Bowles outlined the content of a good budget deal.

"Any of them that don't address defense, any of them that don't address Medicare, Medicaid, Social Security and don't reform the tax code and aren't balanced in some way between that, aren't serious," he said.

Bowles was a chief of staff for President Clinton. He's also a former investment banker and is popular with Republicans and on Wall Street. But he's criticized President Obama's budget publicly while praising Paul Ryan's.

A more likely choice might be Jack Lew, the current White House chief of staff and formerly the president's budget director. In April 2011, he discussed overhauling Social Security:

"It's never really moved the debate forward for one side or another to put a plan out there. It's only really worked well when the parties come together; that's what happened in 1983," he said.

Lew worked on that 1983 Social Security fix as an aide to House Speaker Tip O'Neill. He has Capitol Hill experience and the budget expertise to tackle the big issues that are on the Treasury's plate. And he's got a good working relationship with the president.

Bowles is the Democratic Party frontman for bringing Europe's failed Austerity agenda here. He actively campaigned against progressive Democrats Annie Kuster and David Cicilline and backed hard right Republicans like Charlie Bass (NH) and Brendan Doherty (RI). Kuster and Cicilline won... but if you think that would give Obama a moment's pause, you haven't been paying any attention to Barack Obama. As I've said before, don't worry about Wall Street. They're all set-- and it hardly mattered who won the presidency or which one of the corrupt Beltway party establishments is in charge of Congress. Wall Street calls the shots. Sure, they would have loved to have had one of their own in the White House and to have placed their own little Frankenstein monster in as VP. But Obama hasn't really given them anything serious to worry about and they'll be perfectly fine with a corporate whore and investment bankster like Erskine Boyce Bowles-- currently on the boards of General Motors, Morgan Stanley, Facebook, Norfolk Southern and North Carolina Mutual Life Insurance-- as Secretary of the Treasury. As Ben White and Anna Palmer said, Wall Street might not be getting their "dream candidate," but they certainly know how to work with Obama to further their own interests-- even if he did call them "fat cats" once. Over the weekend William Cohan, who thinks Obama should appoint Bowles, made a good case against Bowles (and Obama):

When U.S. voters elected Barack Obama president in November 2008, many of us were convinced he would make a top priority of reforming Wall Street, which had just almost succeeded in bringing down our way of life through greed and lack of accountability.

Despite the fact that Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) were among Obama’s top 10 financial backers in 2008, we were hopeful we would see a change in the system whereby bankers, traders and executives were rewarded every day to take huge, asynchronous risks with other people’s money.

We also believed that Obama wouldn’t succumb to the backroom maneuverings of the plutocrats and behind-the-scenes money men-- such as former Treasury Secretary Robert Rubin and former Deputy Secretary Roger Altman-- who were busy advocating a quick return to the status quo and looking to move their friends into positions of great importance in Obama’s Cabinet.

It turned out we were either naive or stupid to think that when candidate Obama spoke about “change you can believe in,” he was including Wall Street.

In ways we may never fully understand, Rubin quickly cast his spell on Obama. Before long, Rubin proteges were appointed to the three most important economic positions in the new administration: Timothy Geithner as Treasury secretary, Lawrence Summers as national economic adviser and Peter Orszag as director of the Office of Management and Budget. For good measure, the administration named Mary Schapiro, the head of the Financial Industry Regulatory Authority, Wall Street’s dysfunctional self-regulatory organization, as chairman of the Securities and Exchange Commission.

Summers has gone back to Harvard University, and Orszag is now at Citigroup (and writes a column for Bloomberg View). Geithner and Schapiro will be leaving Washington shortly. Yet other Rubin acolytes-- Gene Sperling, now the national economic adviser; Jack Lew, Obama’s chief of staff; and Michael Froman, the president’s top international economics adviser-- are still very much in residence at the White House.

What did these men and women collectively achieve during Obama’s first term? A remarkably Wall Street-friendly set of policies. To recap, the big banks continued to be bailed out; the weak Dodd-Frank financial reform act continues to get watered down as its specific rules are hammered out; not one Wall Street trader, banker or executive has been held criminally liable for actions leading up to the financial crisis; and the Standard & Poor’s 500 (SPX) has doubled since its nadir in March 2009. The Federal Reserve also did its part: pumping trillions of dollars into the capital markets to keep interest rates at rock-bottom levels (a gift to Wall Street and a tax on savers).

A pretty amazing list of favors, if you think about it. Yet Wall Street clearly thinks it is owed even more. The antipathy between the financial sector and Obama has never been greater. Eight of Republican challenger Mitt Romney’s 10 top donors in the election were Wall Street firms. (Meanwhile, the markets responded to Obama’s re-election with a 400-plus point drop.)

So, President Obama, the time has come for you to do in your second term what many people hoped you would do in the first: Institute meaningful reform on Wall Street. An essential first step is to sweep out the remaining vestiges of the Rubin-Altman nexus. Bring in a new group of people who not only understand how Wall Street really works but also have dedicated much of their lives to changing it.

And then Cohan said Bowles is the right guy for the job. He's wrong-- completely wrong. Bowles is one thing-- another Wall Street shill who would continue Obama's awful Wall Street policies. If you expected anything more, you got played. I live in California and it was not just easy for me to vote against Obama last week, it gave me great pleasure.

The Fighting Begins-- What Will The Grand Bargain Look Like?

Will Wall Street win in the lame duck what they "lost" at the polls?

Keep in mind that mainstream conservative, Steve LaTourette (R-OH), who is retiring from Congress in January, told CNN that the Republicans aren't really a national party any more and that their electoral losses are just beginning:

"There's a one-word phrase we use in Ohio for that: crap. I mean, that's nonsense... The Republican Party cannot be a national party if we give up the entire East Coast of the United States and say-- we don't have any Republicans in New England, we don't have any Republicans in the Mid-Atlantic states. We can't continue to diss the Latino voters and-- you know, my wife's a Democrat, and she was so close to voting for Mitt Romney, but then Mourdock and Akin opened their mouth and we sent them running back to the Democratic Party because they think we're nutty. We have the right message on the finances. We have to get out of people's lives, get out of people's bedrooms, and we have to be a national party, or else we're going to lose."

Of course they don't have the "right message on the finances" at all, but I wonder if Democrats in Congress are as aware of that as voters were. This chart comes from a nationwide survey Hart conducted on election night:

It's simple and it's clear but the Senate ConservaDems like Manchin and McCaskill (and our new "hero" Angus King) and the House New Dems-- who now have nearly complete control of the Democratic caucus in that body through corporate shills like Steny Hoyer, Debbie Wasserman Schultz, Steve Israel and Joe Crowley-- are already trying to work out a deal with Boehner and Cantor that screws over the 62% who said they want the rich to pay their fair share and screws over the 73% that wants Congress to protect Medicare and Social Security benefits from cuts, while giving away the store to the 33% of voters who want to see further tax reductions and to the 18% who want to see the budget balanced by reducing spending on Medicare and Social Security.

Also keep in mind that because of colossal incompetence by the DCCC and mind-blowing gerrymandering by GOP legislatures in Ohio, Pennsylvania, Indiana, Virginia, Michigan, and North Carolina, and Tennessee, Democrats are still a minority in the House even though over half a million more Americans voted for Democrats for Congress than for Republicans.

Based on ThinkProgress’ review of all ballots counted so far, 53,952,240 votes were cast for a Democratic candidate for the House and only 53,402,643 were cast for a Republican-- meaning that Democratic votes exceed Republican votes by more than half a million... The actual partisan breakdown of the 113th Congress will be very different, however. Currently, Republicans enjoy a 233-192 advantage over Democrats, with 10 seats remaining undecided. That means that, in a year when Republicans earned less than half the popular vote, they will control a little under 54 percent of the House even if Democrats run the table on the undecided seats.

Democrats won the presidency and U.S. Senate seats in Pennsylvania, Virginia and Ohio but, because of gerrymandering (and Steve Israel's deranged targeting) Democrats only won 5 out of Pennsylvania's 18 House seats, 4 out of Ohio's 16 and 3 out of Virginia's 11. These voters and their opinions are not part of the debate over the Grand Bargain. As the AFL-CIO pointed out this week, Simpson-Bowles' candidates-- corporate whores who support selling out working families-- were mostly defeated Tuesday. Nebraska corporate whore Bob Kerrey (D) flopped completely; New Hampshire corporate whore Charlie Bass (R) was fired by voters and replaced with an ardent anti-Austerity progressive, Annie Kuster; and Rhode Island voters backed progressive David Cicilline over corporate whore Brendan Doherty (R). Both Simpson and Bowles formally endorsed all three corporate whores and spent money trying to help elect them.

Wednesday Glenn Greenwald offered a step-by-step look at the contours of how conservative Democrats and the part of the GOP that wasn't obliterated Tuesday will celebrate Washington's triumphant Conservative Consensus by beginning the work on gutting "the crown legislative jewels of American liberalism," Social Security and Medicare.

Indeed, Obama already sought in his first term to implement sizable cuts to those programs, but liberals were saved only by GOP recalcitrance to compromise on taxes. In light of their drubbing last night, they are likely to be marginally if not substantially more flexible, which means that such a deal is more possible than ever.

In other words, the political leader in whose triumph liberals are today ecstatically basking is likely to target their most cherished government policies within a matter of weeks, even days. With their newly minted power, will they have any ability, or even will, to stop him? If history is any indication, this is how this "fight" will proceed:

STEP ONE: Liberals will declare that cutting Social Security and Medicare benefits-- including raising the eligibility age or introducing "means-testing"-- are absolutely unacceptable, that they will never support any bill that does so no matter what other provisions it contains, that they will wage war on Democrats if they try.

STEP TWO: As the deal gets negotiated and takes shape, progressive pundits in Washington, with Obama officials persuasively whispering in their ear, will begin to argue that the proposed cuts are really not that bad, that they are modest and acceptable, that they are even necessary to save the programs from greater cuts or even dismantlement.

STEP THREE: Many progressives-- ones who are not persuaded that these cuts are less than draconian or defensible on the merits-- will nonetheless begin to view them with resignation and acquiescence on pragmatic grounds. Obama has no real choice, they will insist, because he must reach a deal with the crazy, evil GOP to save the economy from crippling harm, and the only way he can do so is by agreeing to entitlement cuts. It is a pragmatic necessity, they will insist, and anyone who refuses to support it is being a purist, unreasonably blind to political realities, recklessly willing to blow up Obama's second term before it even begins.

STEP FOUR: The few liberal holdouts, who continue to vehemently oppose any bill that cuts Social Security and Medicare, will be isolated and marginalized, excluded from the key meetings where these matters are being negotiated, confined to a few MSNBC appearances where they explain their inconsequential opposition.

STEP FIVE: Once a deal is announced, and everyone from Obama to Harry Reid and the DNC are behind it, any progressives still vocally angry about it and insisting on its defeat will be castigated as ideologues and purists, compared to the Tea Party for their refusal to compromise, and scorned (by compliant progressives) as fringe Far Left malcontents.

STEP SIX: Once the deal is enacted with bipartisan support and Obama signs it in a ceremony, standing in front of his new Treasury Secretary, the supreme corporatist Erskine Bowles, where he touts the virtues of bipartisanship and making "tough choices," any progressives still complaining will be told that it is time to move on. Any who do not will be constantly reminded that there is an Extremely Important Election coming-- the 2014 midterm-- where it will be Absolutely Vital that Democrats hold onto the Senate and that they take over the House. Any progressive, still infuriated by cuts to Social Security and Medicare, who still refuses to get meekly in line behind the Party will be told that they are jeopardizing the Party's chances for winning that Vital Election and-- as a result of their opposition-- are helping Mitch McConnell take over control of the Senate and John Boehner retain control of the House.

And so it goes. That is the standard pattern of self-disempowerment used by American liberals to render themselves impotent and powerless in Washington, not just on economic issues but the full panoply of political disputes, from ongoing militarism, military spending and war policies to civil liberties assaults, new cabinet appointments, immigration policy, and virtually everything else likely to arise in the second term.

Indeed, nobody takes STEP ONE in that depressing ritual even a little bit seriously. Nobody believes the declarations of progressives about what is "unacceptable," about what their "red lines" are, about how they will refuse to go along with what they are given if it contains what they declare intolerable. That's because STEPS TWO THROUGH SIX always follow, and until that pattern is broken, STEP ONE will continue to be viewed as a trivial joke.

You ready to count on him to save working families?

Five of the Blue America House candidates and all three of the Blue America Senate candidates won their races Tuesday. We'll hold them accountable, not that we have to... they think the same way we do about it. But what about the progressive groups who helped oust Allen West for Patrick Murphy? What about the progressive groups who helped oust Joe Walsh for Tammy Duckworth? What about the progressive groups who helped oust Ann Marie Buerkle for Dan Maffei? What about the progressive groups who helped oust Chip Cravaack for Rick Nolan? What about the progressive groups who helped oust Roscoe Bartlett for John Delaney? What about the progressive groups who helped oust Bobby Schilling for Cheri Bustos? What about the progressive groups who helped oust David Rivera for Joe Garcia? What about the progressive groups who helped oust Dan Lungren for Ami Bera? Will those groups hold their successful candidates accountable? I hope so. (Blue America didn't endorse any of them because we didn't think they could be counted on. We'll see-- unless Obama and Boehner manage to do the whole thing in the lame duck session before the freshmen take office.)

In response to Boehner’s speech on the so-called “fiscal cliff,” the co-chairs of the Congressional Progressive Caucus Raúl Grijalva (D-AZ) and Keith Ellison (D-MN) issued the following statement. [In the speech, Speaker Boehner indicated he would only accept revenue that comes from “dynamic scoring,” the patently false notion that conservatives use to make a case-- and absurd one, but that's what they've got-- that cutting taxes increases revenue.]

“In a speech yesterday, Speaker Boehner doubled down on trickle down-- the same policies the American people soundly rejected in a groundbreaking election just a day before. Boehner ignored voters’ approval of President Obama’s promise to maintain tax rates for 98 percent of Americans while requiring the top two percent to finally pay their fair share.

  “If the Republican leadership is serious about working across the aisle to avert a fiscal cliff, they will support a plan that reflects the needs of the American people. These include allowing the Bush tax cuts for the top 2 percent to expire, protecting Medicare, Medicaid and Social Security benefits, and working with Democrats to enact a jobs plan that puts Americans back to work. Democrats have already been forced to cut important programs such as education and infrastructure by over $1.5 trillion. Now it is Republicans’ turn to come to the table and support a balanced approach to reducing our deficit.”

  In July, the CPC introduced the Deal for All (H.Res. 733), which presents the Caucus’ requirements for any bargain resolving the upcoming fiscal issues:

  •       No cuts to benefits for millions of seniors, children, and disabled Americans who depend on Social Security, Medicare, and Medicaid
  •       Improvements in our tax code so the richest 2 percent contribute their fair share and an end to corporate tax loopholes
  •       Strategic cuts to defense spending to focus on combating twenty-first century risks
  •       Investments in America’s future that put Americans back to work

Two Visions For Going Forward-- Austerity vs Prosperity... Target: New Hampshire

The Austerity agenda Romney and Ryan are advocating for is being played out in real time in Spain, Greece, Italy, England, Portugal, Ireland and across Europe. It isn't working and social cohesion is breaking down. Former members of the Spanish middle class are looking for food for their children in garbage cans and the Greek Nazi Party, Golden Dawn, is rapidly gaining a substantial following. The Austerity agenda is a failure in every single country it's been deployed and it is the entire basis of the Romney-Ryan plan. President Obama is far from the world's best advocate of the alternative approach: Prosperity Economics and the two Wall Street whores he appointed to head the failed deficit commission, Alan Simpson and Erskine Bowles are prominent Austerity warriors.

New Hampshire grassroots activist Ann Kuster is one of 16 candidates for Congress who has moved way beyond the anti-family nostrums of Romney-Ryan and Simpson-Bowles to offer real solutions that don't demand he deficit be blamed on working families. Earlier this summer she told us how she came to back sensible alternatives to Austerity.

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

And last week, Wall Street attack dogs Simpson and Bowles backed her pro-Austerity opponent, Republican corporatist Charlie Bass. They attacked her in full page ads across the state while praising Bass' support for their plan to cut Medicaid and destroy Medicare. 

If you opened up the Concord Monitor, New Hampshire Union-Leader or Nashua Telegraph Wednesday, a full-page ad may have caught your eye.  The headline: “An Open Letter To New Hampshire Voters Who Care About America’s Economic Future…No Matter What Your Political Party.” 

In this open letter, Republican Alan Simpson and Democrat Erskine Bowles endorsed Republican Congressman Charlie Bass’s bid for reelection.  As Bass frequently notes on the stump, he was one of a handful of politicians who supported a budget based on the commission’s work.  In the ad, Simpson and Bowles note their supporters paid a political price. They write, “We need members of Congress who have the guts to ignore these scare tactics and look at the substance of real solutions that will help get our great nation back on track.” 

Bass’s Democratic challenger, Ann McLane Kuster, has criticized him on the campaign trail for voting for both the Simpson-Bowles-inspired budget bill and the Ryan budget-- on the same day.

Toxic private equity plutocrat Peter Peterson is organizing for the kind of Grand Bargain Wall Street is demanding from the politicians they own. There has even been talk of Wall Street forcing Obama to appoint Bowles Secretary of the Treasury if he's reelected. They probably wouldn't have much forcing to do; Obama, like Clinton, has a fondness for the North Carolina investment banker-- a director on the boards of General Motors, Morgan Stanley, Facebook, Norfolk Southern and North Carolina Mutual Life Insurance-- although he's been repeatedly defeated every time he ran for office in his home state.

Kuster isn't being distracting by Simpson and Bowles' predictable support for her opponent. "During his nearly 20 years in Washington, Congressman Bass has repeatedly voted to cut and undermine Medicare-- including his votes for both the Simpson-Bowles and Ryan budget plans. There's a right way and wrong way to reduce the deficit. Let me be clear: I will never cut Social Security and Medicare benefits. My Tea Party opponent will."

A new Granite State Poll released yesterday by WMUR shows New Hampshire voters rejecting both of the state's Austerity proponents, Bass and Frank Guinta.

The races for New Hampshire’s two Congressional districts are replays of the 2010 election, but in both cases, the 2010 losers are on track for winning the rematch. Frank Guinta won the 2010 election by 12 percentage points, but the 2012 election looks to be much better for Carol Shea-Porter, who was elected to this seat in 2006 and 2008. Currently, Shea-Porter is favored by 46% of likely voters, Guinta by 35%, and 18% are undecided. When undecided voters are asked which candidate they are most likely to support, Shea-Porter continues to lead Guinta by 47% to 38%, with 2% favoring some other candidate and 12% still undecided.

...In 2010, Charlie Bass defeated Ann McLane Kuster by a mere 3,550 votes and the 2012 rematch favors looks to be as close. Currently, 36% of likely voters say they plan to vote for Kuster, 34% support Bass, 2% prefer some other candidate, and 28% remain undecided. When undecided voters are asked which candidate they are leaning toward, Kuster gets the support of 42% of likely voters, Bass gets 41%, 2% prefer some other candidate, and 16% remain undecided. Bass had led by 5 percentage points in August... Bass’ favorability ratings have dropped up in recent months. Currently, 35% of 2nd CD voters have a favorable opinion of Bass, 43% have an unfavorable of him, 7% are neutral and 14% don’t know enough about him to say. Bass’s net favorability rating is -8%, down from +3% in August. His net favorability rating among Republicans is +49%, -12% among Independents, and -52% among Democrats.

Both Kuster and Shea-Porter have been endorsed by Blue America and if you'd like to help them in their battle against the Borg... you can do it here. There's an alternative, though it doesn't seem quite American:

Wall Street Will Just Have To Wait A Little Longer For The Complete Take Over They've Been Dreaming Of

Don't worry about Wall Street. They're all set. No matter who wins the presdiency, no matter which one of the corrupt Beltway party establishments is in charge of Congress, Wall Street will be well taken care of. Sure, they would have loved to have had one of their own in the White House and to have placed their own little Frankenstein monster in as VP. But Obama hasn't really given them anything serious to worry about and they'll be perfectly fine with a corporate whore and investment bankster like Erskine Boyce Bowles-- currently on the boards of General Motors, Morgan Stanley, Facebook, Norfolk Southern and North Carolina Mutual Life Insurance-- as Secretary of the Treasury. As Ben White and Anna Palmer said, Wall street might not be getting their "dream candidate," but they certainly know how to work with Obama to further their own interests-- even if he did call them "fat cats" once. And, of course, the criminal banksters-- who were not prosecuted under the Obama administration-- "still go to Romney fundraisers, open their wallets and hope for the best, especially in the upcoming debates. It’s just that Wall Street and the business community tend to follow data and play percentages. And right now they [the data, not the banksters] favor the president."

It makes for an uncomfortable moment for Wall Street, which came out much more aggressively for Romney than Obama this year, after Obama made significant inroads with the finance sector in 2008.

The shift in tone among executives toward Obama was on display at the Clinton Global Initiative this week, where several CEOs softened their criticism of the president. Goldman Sachs CEO Lloyd Blankfein acknowledged there had been widespread “disappointment” with Obama within his firm and across Wall Street.

But he also said that it was time to move on and finally deal with rising debt and unsustainable entitlement programs. “People who have been pouting and holding their breath aren’t going to want to do that for four more years,” he said.

John Chambers, CEO of Cisco Systems and a strong Romney supporter, spoke of bridging partisan divides on taxes and spending should Obama win a second term. And in an interview with Reuters, Chambers said whoever wins should govern like Bill Clinton. “There’s a lot to learn from President Clinton. It kills me as a strong Republican saying it, but he was the most effective president during my lifetime,” Chambers said.

The Obama administration has already begun laying ground work for improving its soured relationship with corporate America in a possible second term.

...Inside the Beltway, financial services lobbyists are starting to hedge their bets. For many in the industry-- private equity, hedge funds and investment banks-- the ramifications could be huge if Democrats retain the Senate and Obama is leading the effort to a major tax overhaul.

Perennial issues like carried interest, a favorite hobby horse of Senate Democrats, could be on the chopping block. The industry most certainly would be on the defensive, according to several financial services lobbyists. And the optimism that agency heads would change and new rules in the pipeline like the Volcker Rule would vanish or get watered down is no longer the case.

Despite the most recent polls and economic forecasts, not all banking lobbyists are willing to concede the election. “The banking industry knows for them this is by far and away the most important election, bar none,” Consumer Bankers Association President Richard Hunt said, noting the headwinds against banks will be much stronger in a second Obama administration.

What a drama queen! He knows perfectly well that Obama will continue to protect their industry against the accountability they've earned. Today is the last day of the FEC quarter. If you'd like to help bring some much needed accountability to the banksters and other financial predators, these 16 House candidates who have been campaigning on the working family values inherent in Prosperity Economics and to protect America from Austerity (the 2012 version of Voodoo Economics or Trickle-down economics) are far more likely to be looking out for our interests than Obama or any Blue Dogs or wretched New Dems ever will. This is how Alan Grayson put it after he had read Hacker's and Lowentheil's proposals:

The Seinfeld show, which TV Guide named the greatest TV show of all time (seriously), often was described as a show about nothing. We are in danger of the 2012 Election becoming an election about nothing. When a nation is facing the kind of problems that we are facing, then Barack Obama’s birth certificate, his religious beliefs, Mitt Romney’s gaffes, his personal deductions, and even Todd Akin’s understanding of female anatomy all are the moral equivalent of nothing. This coming election is too important to be about nothing. And that is why Nate Loewentheil’s “Prosperity Economics” platform is important-- it’s not nothing, it’s something. Something big. For a Democratic victory to be meaningful, for it to create a “mandate,” we owe it to America to explain what we would do with that victory. We need to make some promises, and then do our darnedest to try to keep them. “Prosperity Economics” is a coherent, comprehensive plan that offers the hope-- the essential hope-- of leading us out of the wilderness.

It's important to make sure Romney and Ryan don't get into office. It's crucial people like Alan Grayson do. Please do what you can to help. This is one way to do that. Getting Grayson back on the House Financial Services Committee... now that would be something. Remember this? It might be the most viewed House committee testimony in history. Over 4 million people have watched it so far.

Somehow we've got to change the idea that in economic issues the so-called "serious" people can be trusted

"The old Soviet Union had two newspapers, Pravda and Izvestia -- Truth and Light -- and the saying in Moscow was, 'Where there is Truth, there's no Light. And where there is Light, there's no Truth.' It's clear now that the Soviet Union didn't really end.

"The walls came down, and we became them."

-- economist James K. Galbraith, in a blogpost
tearing the Catfish Commission report to shreds

by Ken

As Howie and I, along with scads of other commentators on the Left, have been pointing out repeatedly, under cover of the economic meltdown they themselves did so much to cause, and from which they have managed to get the government to largely extricate their personal interests, the American megacorporate oligarchy has been stealthily advancing a political agenda that even those greedy sons of bitches probably never dreamed they could get away with. I suppose you have to admire the sheer gall.

The fights over the and the Catfood Commission's secretly crafted deficit-reduction proposals and the issue of the expiring Bush tax cuts tend to merge in our minds because they really are part of the same agenda. The same agglomeration of writers has been pointing out since the spawning of the Catfood Commission that it was always devised, not to solve real economic issues -- of which I believe there actually are genuinely critical ones -- but to complete the restructuring of the American economy begun in the Reagan administration, and since then only marginally slowed down, and in many ways actually advanced, by the theoretically ideologically contrary Clinton administration, which in fact shared many of the same assumptions about whose interests should be paramount in the restructured economy.

"Deficit hawks" is the shorthand description for the ideologues of corporate governance who see the deficit as their opening for establishing once and for all who's in charge. And the makeup of the Catfood Commission left no possible doubt that it was commissioned to produce a report that would be a deficit hawk's wet dream. There are pandering pols who profess to be impressed by the commission's "bipartisan" 11-7 vote affirming for the report. Since the ground rules of the commission called for a minimum of 14 "yes" votes, and Bowles and Simpson were unable to drum up more than 11, despite what I assume must have been a fairly intense campaign of "persuasion," suggests how one-sided their document is.

What most disconcerts me about the developing debate about what to do about the deficit is the seemingly universally accepted determination made by our Village political-and-media nexus and for a couple of decades now applied to pretty much any issue that arises, as to who qualifies as a "serious" participant in the discussion. If you swear an oath to Village Principles and Assumptions, you're serious; otherwise you don't even exist. You're consigned to history's future "who could have foreseen?" invisibles. Think of the political and economic catastrophe of the Iraq war and the economic catastrophe of the housing bubble. Plenty of people foresaw both, but even after they were proved right, they not only weren't rewarded, they weren't listened to any more than they had been. Instead generous rewards were given, and the cleanup was entrusted to, the very people who got us into those messes.

The "serious" people.

On the specific issue of the Catfood Commission, economist James K. Galbraith is developing into a "go to" voice of sanity. In a New Deal 2.0 post yesterday, more widely circulated on AlterNet as "Moment of Lies: Galbraith Attacks Lack of Evidence for Frantic Deficit Fear Mongering" (with the subhead "The sky is falling, but not enough to tax the rich apparently"), he began:

The report of the National Commission on Fiscal Responsibility and Reform, issued on December 1, 2010 by Chairmen Erskine Bowles and Alan Simpson, is entitled “The Moment of Truth.” The words appear in block caps on the second page, weighty and portentous. They reappear in the first paragraph of the preamble:

“Throughout our nation’s history, Americans have found the courage to do right by our children’s future. Deep down, every American knows that we face a moment of truth once again.”

These sentences set the tone. The first is a bald-faced lie, as a Westerner like Senator Simpson knows perfectly well. To the contrary, we have often fallen under the sway of robber barons, water barons, oil barons, bison-killers, clear-cutters and strip-miners, hell-bent on maximum pillage in the shortest time. Only occasionally have a few heroes like Teddy and Franklin Roosevelt, Gifford Pinchot and Harold Ickes Sr. emerged to battle for the most precious physical elements of our heritage — and then only with limited success.

In the next paragraph, the Commission states the threat:

“Our challenge is clear and inescapable. America cannot be great if we go broke.”

Exactly what it might mean for America to “go broke” is not explained. Nor is it anywhere in the report. . . .

By all means check out Galbraith's post for the specifics of the bogosity of the commission report. My immediate point is the contrast between the "serious" people whom Village pundits are now crediting with being "realistic" about the deficit, as against an economist as respected as Galbraith, who has nevertheless been relegated to the Party of the Invisible. Remember, he was asked for input by the commission, which he provided in the form of a scathing report, which was strenuously ignored. Some of the hardest work the commissioners seems to have performed was ignoring all realities that don't accord with their designated agenda.

And I'm afraid, once again, that anyone looking to the president as a "centrist" compromiser, someone we might hope will stand up at least in part for Americans who aren't tied to the corporate oligarchy, is living in a dream world. Our friend Ian Welsh made this point once again in a blogpost yesterday:

Obama isn’t about compromise

People, Obama is not and never has been a left winger. Nor is he a Nixonian or Eisenhower Republican, that would put him massively to the left of where he is and to the left of the majority of the Democratic party. Instead his a Reaganite, something he told people repeatedly.

Until folks get it through their skulls that Obama is not and never was a liberal, a progressive or left wing in any way, shape or form they are going to continue misdiagnosing the problem. That isn’t to say Obama may or may not be a wimp, but he always compromises right, never left and his compromises are minor. He always wanted tax cuts. He gave away the public option in private negotiations near the beginning of the HCR fight, not the end. He never even proposed an adequate stimulus bill. He bent arms, hard, to get TARP through.

He’s a Reaganite. It’s what he believes in, genuinely. Moreover he despises left wingers, likes kicking gays and women whenever he gets a chance and believes deeply and truly in the security state (you did notice that Obama administration told everyone to take their objections to backscatter scanners and groping and shove them where the sun don’t shine, then told you they’re thinking of extending TSA police state activities to other public transit?)

Let me put it even more baldly. Obama is, actually, a bad man. He didn’t do the right thing when he had a majority, and now that he has the excuse of a Republican House he’s going to let them do bad thing after bad thing. This isn’t about “compromise”, this is about doing what he wants to do anyway, like slashing social security. The Senate, you remember, voted down the catfood comission. Obama reinstituted it by executive fiat.

If the left doesn’t stand against Obama and doesn’t primary him, it stands for nothing and for nobody.

For the record, let me say that I am prepared to believe we indeed have, not so much a "deficit" problem as a "borrowing" problem -- namely that Americans have been encouraged to take on so much debt that our economy, which now produces hardly anything with which we might be able to pay off what we owe, is in for a mighty fall. We have our own economists screaming about it hear Europeans screaming about.

You know, people like Paul Krugman and Joseph Stiglitz and Brad DeLong, people who not only could but did foresee the housing bubble, but whom the Chicago nitwits, not to mention the coalition of megacorporate media and political whores, continue to pretend never existed. We hear it more and more from Europeans -- that is, those of us who occasionally hear Europeans, whom the Right has worked so hard to reduce to bogeypersons to be reviled, presumably for this very purpose. A coming cataclysm in the American economy surely has to be on the minds of the Chinese who own so much of our increasingly dubious paper.

So yes, I am prepared to believe there's a potentially devastating reckoning up ahead. Unfortunately, the people who have been anointed, or have anointed themselves, as "serious" are the last people we should want presiding over it -- or anywhere near it.

#

Unlike Bayh And Conrad, Not Every Democrat Thinks The Message From Last Tuesday Is To Surrender To The GOP & Dismantle Social Security

Republican reactionaries and Democratic conservatives should keep in mind what happened to her and her ilk when they pushed people too far

I'm pretty sure that the very first Senate candidate ever endorsed by Blue America was then-Congressman Ben Cardin in 2005 when he was running for the Maryland seat Paul Sarbanes was retiring from. Cardin struck me as a levelheaded and committed progressive and 738 Blue America supporters donated a modest $8,128 towards his 2006 election. At the time, I wrote:

If you read Ben Cardin's record as a congressman you'll understand how important it is to get a guy like this into the U.S. Senate. But it was really meeting Ben in person and seeing what he was like as a human being that inspired me to start an Act Blue page for him. The Republicans are targeting Maryland as a place where they can make an inroad. I think they're barking up the wrong tree. If Ben has the money to get his message out, he'll be sworn in as a U.S. Senator next January, where he'll be a voice of conscience in a time when Bush/DeLay/Frist/Abramoff ethics and Robertson/Falwell/Dobson/Phelps morals have replaced genuine American values.

And Cardin hasn't been a disappointment. In the current Congress, his ProgressivePunch score has been a robust 96.72, even more progressive than Bernie Sanders, Jeff Merkley or Barbara Boxer!

Yesterday Senator Cardin publicly ruminated about the meaning he was drawing about the message from last week's electoral drubbing his party took at the polls (though, basically, not in his state, where normal Democrats were all successful and -- at least federally-- the only casualty was an especially bad Blue Dog, Frank Kratovil, one of the extremely conservative members of that caucus who voted with the Republicans far more than with the Democrats on contentious, substantive issues). Cardin's conclusions are at odds with the conclusions of many conservatives in the media, in the Senate, in his own party.

"Now that we’ve had a little time to digest the results of Tuesday’s mid-term elections," he began, "its story is glaringly clear: American voters are angry and frustrated. Too many Americans are still out of work; too many American families are still losing their homes; and too many small businesses are struggling to survive in this tough economy. Voters are angry that we have not done more to help working families keep faith in the American Dream." Exactly right. Too many Democrats have strayed in the direction of Frank Kratovil and the Blue Dogs. The tragedy isn't that Kratovil and 29 other Blue Dogs were obliterated-- they earned that-- but that because they managed to muddy (and sully) the Democratic brand in the mind of so many voters, several Democrats who have been champions of working families-- Members like Carol Shea-Porter, Mary Jo Kilroy, John Hall, Phil Hare and, more than anyone, Alan Grayson-- were also swept away with the garbage like Bobby Bright, Travis Childers, Gene Taylor, Walt Minnick, Glenn Nye, etc.

The election is now over and we all have a responsibility to govern together. As a public servant in the Maryland General Assembly, U.S. House of Representatives, and now the U.S. Senate, I have experience crossing party lines in order to do what is right for Maryland and America.  At the same time, I will stand up for what I believe in and disagree when necessary.

Apparently Senators Conrad and Bayh, two far more conservative and corporately-inclined members of the Democratic caucus, didn't take away the same message as Senator Cardin. Bayh and Conrad see the drubbing the exact same way Republicans do-- as an opportunity to further concentrate the nation's wealth in the hands of fewer and fewer people. They both see an opportunity to begin the process of dismantling Social Security. This what happens when Big Business owns all of one party and a substantial piece-- the Bayh-Conrad piece-- of the other. Sam Stein tackled the thorny-- or electrifying-- question Tuesday evening at HuffPo:

In what may be the first major move of the forthcoming Social Security debate, the Peterson Foundation launched on Tuesday a $20 million TV ad campaign to promote the need for a major discussion on debt and deficit reduction.

...Perhaps the most frightening part of the unveiling, however, is that Peterson-- long a scourge of progressives for having earned hundreds of millions in the hedge fund business while preaching financial sacrifice for others-- has prominent Democrats backing his latest campaign. Appearing alongside him at the Newsuem on Tuesday morning was outgoing Sen. Evan Bayh (D-Ind.) and Budget Committee Chair Sen. Kent Conrad (D-N.D.).

"People on the left who don't want to touch entitlements, that is just unrealistic," said Conrad. "I would say to my friends on the left it is unrealistic, Medicare and Social Security are headed for insolvency. The idea that nothing has to be done is divorced from reality. On the right, those who say no new revenue, I believe, are also in denial."

"The election a week ago today would have been a lot more edifying if we had more commercials like that then the ones running out there in the various states," Bayh said of the ad campaign. "Very impressive."

If you're a corporate shill dedicated to destroying the middle class. Bayh is thankfully leaving the Senate in January, although I fear he (and his lobbyist wife) won't be disappearing from the political firmament. Conrad, a member of the Cat Food Commission, will still be around tugging the Democrats into more and more Republican Party directions, directions fatal for the Democratic Party, which needs to jettison these conservative ideas and take stock in what their big tent is supposed to actually represent. Along those lines one of the country's most respected economists, Dean Baker, Co-Director of the Center for Economic and Policy Research, sent Conrad a letter which he gave me permission to reprint:

November 9, 2010

The Honorable Kent Conrad
702 Hart Senate Office Building
Washington, DC 20510

Dear Senator Conrad:

You were quoted as saying at a press conference today:

“People on the left who don't want to touch entitlements, that is just unrealistic. … I would say to my friends on the left it is unrealistic, Medicare and Social Security are headed for insolvency. The idea that nothing has to be done is divorced from reality.”

This struck me as a very peculiar statement for two reasons. First, I literally cannot identify a single person on the left who working on Social Security who has not suggested many ways to close the projected long-term shortfall. The list of items they have put forward has included raising or eliminating the payroll cap, applying estate tax revenue to financing Social Security, and applying the revenue from a financial speculation tax to Social Security.

Many have also suggested phasing in modest increases in payroll taxes at a gradual pace, which would still allow after-tax wage growth to substantially outpace the rate of inflation. As I’m sure you know, polls have consistently shown that payroll tax increases are unpopular, but nonetheless preferred to benefit cuts.

I mention this list of ways to deal with the shortfall because it is simply not honest to claim that people on the left have not put forward suggestions for dealing with the shortfall. You may not
consider these suggestions to be good ones, but that doesn’t mean that they do not exist.

The second reason that your statement is peculiar is that it is quite literally wrong in the case of Social Security. None of us know the future, but if we rely on the Social Security trustees projections the program will be fully solvent until the year 2037. (The Congressional Budget Office projects that it will be fully solvent until 2039.) This means that we certainly can wait before taking any action on the program.

For example, if we waited until 2020, and then implemented a fix comparable in size to the Greenspan Commission’s proposals, then the program would be fully solvent through the rest of the century. In fact, this would be true even if we waited until 2030 to implement the fix.


In short, it is simply not true to claim that we cannot wait to address the program’s projected shortfall. There are reasons why you may think it is better to move quickly, but the reality is that the
projections show that we have the option to wait.

I would be happy to discuss this issue with you further if it would be helpful.

Regards,

Dean Baker
Co-Director, Center for Economic and Policy Research

Meanwhile, over on the House side, the crap that's left of the Blue Dog Caucus, is running around chasing it's collective tail trying to wreak revenge on Pelosi for... not being Republican enough or something. According to Roll Call the reactionary corporate wing of the House Democratic caucus feels it can best serve its masters by some of these proposals its considering:

• Holding Blue Dog meetings at the same time as Democratic Caucus meetings, under the logic that if Pelosi isn’t going to listen to them, they don’t need to listen to her.

• Taking down a rule during the lame-duck session to express their displeasure with the Speaker and embarrass her on the floor.

• Pushing to make the chairman of the Democratic Congressional Campaign Committee an elected position to weaken the Democratic leader’s power.

• Getting members to sign letters expressing their displeasure at the Speaker and threatening not to run for re-election if she remains.

• Making a push to enforce term limits against Reps. George Miller (Calif.) and Rosa DeLauro (Conn.), Pelosi’s closest allies, in their roles as co-chairmen of the Steering and Policy Committee.

• Opening formal negotiations with Republicans on budget cuts or other issues and cutting Pelosi out of the talks.

Please keep in mind that this past cycle, Blue America TV and radio ads were responsible for ridding Congress of the single most reprehensible Blue Dog, Bobby Bright (AL). Our Blue Dog page is still open for business and we promise to work on getting rid of more Blue Dogs in the primary season next year. Please consider giving us a hand.

UPDATE: Finally A Democrat Who Isn't On The Board Of MorganStanley Praises The Cat Food Commission-- Conrad, Of Course

Though not for lack of trying, Erskine Bowles has never been elected to anything, not by real people. But the shameless corporate hack-- Obama's second worst pick for his Cat Food Commission-- was selected for a very lucrative position on the Board of Wall Street financial predators MorganStanley. That Board is his constituency and he is representing their interests with his viciously anti-family proposals. One of the most corporate-oriented Democrats on the commission other than Bowles, is North Dakota Senator Kent Conrad-- and he thinks Democrats should sacrifice their political careers on the alter of concentrating more of the nation's wealth in the hands of his campaign donors. This garbage will wind up on history's trash pile in two years, when his corporate donors abandon him for a teabagger and Democratic voters decide there's no reason to bother to go to the polls.