As the new Congress (aka "The Crackpot 114th") opens, we could laugh or we could weep

Miss Mitch, er, beamed at Tuesday's swearing in in the Old Senate Chamber

"After so many years of sluggish growth, we're finally starting to see some economic data that can provide a glimmer of hope. The uptick appears to coincide with the biggest political change of the Obama administration's long tenure in Washington: the expectation of a new Republican Congress."

-- silver-tongued "Miss Mitch" McConnell,
taking over the helm of the U.S. Senate yesterday

by Ken

That's right. After six years of doing everything in his power to doodify the country, after the eight years which the country's economic elites stole every bit of the economy they could get their mitts on, so that his masters in economic predation could strut in and take complete possession of everything that's left, Miss Mitch now lives up to his reputation as the most dishonest creature on the face of the earth by claiming that the recent positive economic news, instead of showing that he and his henchcreeps didn't succeed entirely in laying waste to the country, proves that The Putrid Will Inherit the Earth.

Greg Sargent, for one, isn't surprised. He writes today ("Mitch McConnell takes credit for the recovery. Here’s why you should take that seriously."):

The other day, your humble blogger made a fairly mundane and obvious prediction: “how long until the notion that the recovery is all due to increased confidence stemming from the GOP takeover of Congress becomes an article of faith inside the Conservative Entertainment Complex?”

Today, Mitch McConnell gave voice to exactly this idea on the Senate floor. He claimed this morning that the “glimmer of hope” and “uptick” we’re seeing in the economic data “appears to coincide” with the “expectation of a new Republican Congress.”

A lot of people, Greg notes, are finding this funny, or at least ironic. Greg, not so much. He points to the line that followed Miss Mitch's announcement that all the recent positive economic news may be attributable to the coming of Republican governance:

So this is precisely the right time to advance a positive, pro-growth agenda.

And that, Greg is here to tell us, is "what this is really about."

The idea is that the increased confidence generated by the impending GOP takeover of Congress is responsible for the recovery — which is exactly why we should now go forward with implementing a Republican economic agenda.

The significance of this is that, unsurprisingly, continued good economic news — and other good news, such as the falling deficit — are not going to alter the GOP agenda or analysis of the current situation in the slightest. The analysis implied by McConnell’s speech is that the GOP takeover of Congress brings with it the expectation of tax relief for job creators, and relief from the Big Gummint regulatory overreach that is supposedly dragging down the recovery — and that these tantalizing possibilities are really the drivers of the good economic news.

Indeed, all that good news will be pressed into service to bolster the case for more high end tax cuts and another push for deeper spending cuts later this year. The corollary to this is the GOP’s imposition of “dynamic scoring” at the Congressional Budget Office. As Jonathan Chait explains, this will require the CBO, in analyzing coming GOP proposals, to be guided by the idea that tax cuts juice the economy by unshackling the job creators and therefore they pay for themselves — which is to say, to adopt the broad set of Republican economic assumptions that has animated the party for decades.

Today’s ideological shift at the CBO, and McConnell’s forward-looking suggestion that the good economic news must somehow be related to the anticipation of GOP fiscal policies, are interrelated.

Dana Milbank too (in "Mitch McConnell is off to a bitter start") looks beyond the crypto-comical portions of Miss Mitch's peroration.

McConnell, when he wasn’t taking credit for things that preceded his ascent, gave a remarkably angry and ungracious first speech to the body he now leads. It was an 18-minute snarl, dripping with contempt and packed with campaign-style barbs for the president. He didn’t even offer an expression of condolences to the French after the terrorist attack Wednesday in Paris. (He mentioned the carnage to reporters later, after lunch.)

"Such addresses," Dana writes, "are times to summon togetherness and high purpose," and he argues that "Sunny John" Boehner "hit the themes just right" in his House version of the session-opening speech on Tuesday,

when he called for civility in the battle of ideas. “All I ask, and frankly expect, is that we disagree without being disagreeable,” he said, offering a stirring call to achievement: “Let’s make this a time of harvest, and may the fruits of our labors be ladders our children can use to climb the stairs to the stars.”

Personally, I have every confidence that Sunny John will quickly and emphatically live down to his normal "I drop doody on America" history. But shit, when your rhetoric is being compared unfavorably to Sunny John's, you must really suck. By contrast with this shining model, Dana writes, "McConnell took the Senate on the low road." He "stood still at his desk, lips pursed, clearing his throat often, and reading a grim message."

Dana notes points in Miss Mitch's "diatribe" where he detected "seeds of a magnanimous speech that never took root." A magnanimous speech, from Miss Mitch? For the record, Dana points to his tribute to productive lawmakers of the past, and his "pledge to return 'regular order' to the Senate and the spending process,: which Dana pronounces "an admirable goal." (We apparently have different ideas of what Miss Mitch might mean by "regular order.") "But," says Dana,

he spent more of his time scolding, and looking backward at the “countless common-sense bipartisan bills” that “died right here” during the Democrats’ control of the Senate. He chided President Obama’s “anything but productive” threat to veto the Keystone XL oil pipeline. “Bipartisan compromise may not come easily for the president — not his first inclination,” the majority leader said with a sneer. “The president’s supporters are pressing for militancy these days . . . the comforts of purity over the duties of progress.” He said Obama and the Democrats should “accept reality,” turn from their “exhausted 20th-century mind-set” — and do what Republicans want.

“It's not our job to protect the president from good ideas," Dana quotes Miss Mitch saying. "No," says Dana, "it's apparently McConnell's job to chide and to taunt -- and to make the next two years as bitter and unproductive as the last four.

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In the reach for general affluence, says Ian Welsh, "The monster facing us, as usual, is us"

"[W]hile my book has a lot of general principles of the sort which books on prosperity often have . . . that isn’t the most important part.  The part that matters isn’t about the technical requirements of prosperity, it’s about why and when people do what is required to achieve prosperity, and when they don’t.  And when, having obtained it, they throw it away."

-- Ian Welsh, in his post "To know what to do is not enough"

by Ken

When it comes to taking the long view, or the large view, we frequently turn to our friend Ian Welsh, and a few days ago Ian put up a blogpost that I think may stimulate and challenge a lot of us. He has been at work, he tells us, on a book "a book on prosperity, by which I mean widespread affluence," and "it's been slow going."

[T]he real problem isn’t the technical details like eliminating bottlenecks, or redistributing income, or setting up positive feedback loops, or avoiding fraud, or stopping financialization, or any of the dozens of other subjects I either visit at chapter length or touch on briefly.  The problem as with, say, stopping smoking, isn’t so much what to do, it is how it comes that we do it.  When do we make the decision we’re willing to do what it takes, sufferer the negative consequences of getting to a better place, and then push ourselves through those consequences?

Citing the examples of "the weight loss, addiction, psychology, psychiatry and self-help industries," Ian says, "There is, generally, more money in  not solving a problem, as drug makers with their palliatives understand, than in solving it."

There is, generally, more money in  not solving a problem, as drug makers with their palliatives understand, than in solving it.  The people who have power and money and influence in the status quo are not sure that in a new world, with a new economy, and the new ethics which must undergird that new economy, they will be on top.  They are right to believe so.  They are creatures of the current world, and in being created, have created the world they are unsteady masters of.  Their ethics and morals, their way of business, of living, of apportioning power and influence and money must go if there is to be widespread affluence.

"Ordinary people, says Ian, "also have the wrong ethics, the wrong morality."

Much is written about why consumerism is bad, but the ultimate problem of consumerism is not how it makes us feel but that the consumer passively chooses from a menu created by others, not to fill the consumer’s real needs, but to benefit those who created the menu.  Such a passive people cannot understand that choosing choices without creating choices is not choice, it is the illusion of choice.

I've been sitting on Ian's piece for several days now, and I thought the leisure and quiet of a Sunday morning might be a good time -- or as good a time as we're apt to get -- to offer it for your consideration. Here's the whole thing.

To know what to do is not enough

2013 JANUARY 2
by Ian Welsh

For the past year I’ve been writing a book on prosperity, by which I mean widespread affluence. It’s been slow going, not because I don’t believe I know the general technical requirements of prosperity (I do, if I didn’t, I shouldn’t be wasting anyone’s time, including mine, writing the book), but because the real problem isn’t the technical details like eliminating bottlenecks, or redistributing income, or setting up positive feedback loops, or avoiding fraud, or stopping financialization, or any of the dozens of other subjects I either visit at chapter length or touch on briefly.  The problem as with, say, stopping smoking, isn’t so much what to do, it is how it comes that we do it.  When do we make the decision we’re willing to do what it takes, sufferer the negative consequences of getting to a better place, and then push ourselves through those consequences?

This is a huge problem in individuals, as the weight loss, addiction, psychology, psychiatry and self-help industries attest.  There is, generally, more money in  not solving a problem, as drug makers with their palliatives understand, than in solving it.  The people who have power and money and influence in the status quo are not sure that in a new world, with a new economy, and the new ethics which must undergird that new economy, they will be on top.  They are right to believe so.  They are creatures of the current world, and in being created, have created the world they are unsteady masters of.  Their ethics and morals, their way of business, of living, of apportioning power and influence and money must go if there is to be widespread affluence.  Their methods have been tried for 40 odd years now, and if measured against the human weal, have failed.  They will not, they cannot adapt, not as a group. They were not selected for the skills it takes to create a new type of affluent society, they have not even been able to maintain the mass affluence of the old society, and not just because they have not wanted to.  They would be a different elite, made up of different people with different ethics, talents and skills if they did want to.

Ordinary people also have the wrong ethics, the wrong morality.  Much is written about why consumerism is bad, but the ultimate problem of consumerism is not how it makes us feel but that the consumer passively chooses from a menu created by others, not to fill the consumer’s real needs, but to benefit those who created the menu.  Such a passive people cannot understand that choosing choices without creating choices is not choice, it is the illusion of choice.

So while my book has a lot of general principles of the sort which books on prosperity often have, such as about trade, and productivity and technological change, that isn’t the most important part.  The part that matters isn’t about the technical requirements of prosperity, it’s about why and when people do what is required to achieve prosperity, and when they don’t.  And when, having obtained it, they throw it away.

Our society is ours.  A tautology, but one we forget too often.  As individuals we often feel powerless, as a mass, we have created our own society.  There are real constraints, physical constraints on what society we can have, based on the resources we have, the technology we have mastered and what we understand about ourselves and our world, but those constraints are not, right now, so tight as to preclude widespread affluence, to preclude prosperity.

They are, however, tight enough to preclude continuing to do the same thing, led by the same sorts of people, and expect anything but decline, repeated disasters and eventual catastrophe.  We can be affluent and prosperous, we can spread that affluence and prosperity to those who do not have it now, but we cannot do it if we insist on keeping the current forms of our economy, including our current forms of consumption.  This does not mean doing with less, it means doing with different things, valuing different things.  Those new values will be better for us, objectively, they will make us both happier and healthier, just as most addicts are happier once they’ve broken their addiction, or rather once they’ve gone through withdrawal and rebuilt their lives.

We can choose not to do so.  We have, in certain respects, already chosen not to do so, as with our refusal to do anything about climate change until it is too late (the two problems are combined, climate change is a subset of the political and economic problems we have).  We can, also, choose to make the necessary changes, not only to avoid the worst catastrophes (disasters are now inevitable, there are consequences to failure, stupidity and greed), but to create an actual, better, world, a world in which the vast majority are healthier, happier and doing work they care about.

The monster facing us, as usual, is us.  The monsters are always us, our brothers and sisters, and the one in the mirror.  And it is those monsters I’ve been wrestling this past year.

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Professor Jacob Hacker Gives Wall Street Shill Ed Royce A Little Lesson In Economics

Not many DC pundits are following the campaign in California's suburban 39th congressional district (Hacienda Heights, Buena Park, La Habra, Rowland Heights, Diamond Bar, Chino, Yorba Linda, Fullerton. Brea and Placentia). It's a swing district where McCain edged Obama 49-47% under the new boundaries. Ed Royce didn't represent much of it, although he's being called the incumbent. And the challenger is Jay Chen, a local school board president and committed smart progressive. This summer he was endorsed by Blue America.

Royce is basically known for two things: his devotion to his Wall Street paymasters and his fervent, divisive racism and bigotry. Here's a new sign Royce or one of his supporters has put up around the district:

This is what Jay said when he saw it:

Yes, we were as confused as you when we first saw this sign in La Habra Heights yesterday. Only U.S. citizens can run for public office, so what are these folks getting at? Are they taking a jab at my birthplace city, Kalamazoo? I know it's a funny sounding name, but it's no worse than Honolulu, and it's not like anyone ever gets worked up about people being born in that city.

  Change can be hard to come by for many people, and it can illicit the worst kind of fears and reactions. In the last two weeks I've been accused of being a "Commie," of wanting to get rid of 401(k)s, and of wanting to tax your wheelchairs. Our yard signs have disappeared in record numbers. It's not pleasant, but this viciousness confirms my opponent's vulnerability, and validates my decision to run.

There couldn't be two more different candidates anywhere than Jay Chen and Ed Royce. Royce is one of Congress' leading proponents of the Austerity Agenda (the new way of talking about Voodoo Economics and Trickle Down) that is failing so miserably in Greece, Spain, Ireland, Portugal and across Europe and Jay has embraced policies for economic growth which have been talked about as "Prosperity Economics." Royce has been on the attack, distorting Jay's proposals and the whole package of proposals put forth by Jacob Hacker and Nate Loewentheil, claiming, for example, that the intent is to "do away with tax deductions for 401ks and force worker and employers to contribute to government-run 401ks." That's a flat out lie, as Jacob Hacker pointed out himself:

Congressman Royce is criticizing a made-up proposal that bears no resemblance to the framework for retirement security that we outline in Prosperity Economics. We do not say tax breaks for 401ks should be ended, and we certainly do not argue that workers and employers should be asked to contribute to “government-run 401ks.”

  This isn’t about government taking over anything. For half of workers, there’s nothing to take over because they don’t have a retirement plan. If we can work with the private sector to fill that huge void, that would be terrific. But if the market fails to solve this problem, the answer can’t be “tough luck.” Every American should have a secure and adequate retirement. They certainly do not today. Prosperity Economics is about ensuring that working families get more, not less.

  Where employers are offering a retirement plan of some kind now, we need to ask them to do better. Where they are not, we need to provide vehicles for private retirement savings that provide some security against market risks. As we argue in Prosperity Economics, we can do this through three steps. First, for the half of workers at private companies who have no opportunity for tax favored retirement savings on the job, we need to guarantee them a chance to save. Second, for the tens of millions of middle- and low-income people who now get little or no savings incentives under federal law, we need to give them the same sorts of tax breaks that upper income Americans get. Finally, to deal with how little is being put away for retirement, we need to insist upon shared responsibility, with employers and workers contributing, along with federal tax incentives.

Instead of demonizing constructive discussion of a problem that most Americans rightly see as dire, our leaders need to focus on making private retirement plans work for working families, because they surely are not working for far too many people today.

You can find all 16 of the candidates Blue America has identified who have been campaigning to protect Americans from the toxic Austerity Agenda Wall Street shills like Royce are trying to mandate in this country. This is what Jay told us about it after he had read Hacker's and Loewentheil's work:

Prosperity Economics brings us back to the principles that make our country great. These ideas, such as investing in infrastructure, education, and our social safety nets, and limiting the power of corporations to distort our political system, are not new or radical, they are part of the original formula that drove the unparalleled success our nation has enjoyed until recently.

But these ideas are now under constant attack, as is the prosperity of our nation, by corporate interests who continue to push a "trickle-down" theory that is already a proven failure. These special interests have made it a point to confuse wealth accumulation with job creation, and the result is a drastic increase in income inequality unseen in modern times.

In the meantime, our middle class, which is the true engine of economic growth and stability, continues to shrink. We simply cannot cut our way to prosperity anymore than we can drill our way out of oil dependence. We need leaders who understand how smart, sound investment made us the great nation we are today, and how prosperity economics can ensure our leadership in the world for generations to come.

Who would call these ideas "Communistic?" The same kind of dangerous right-wing fanatics and John Birchers like Ed Royce who called President Eisenhower a Communist when he made similar proposals at a time when government was working proactively to help build a solid American middle class. Below is the latest attack piece Royce sent out against Jay. Please consider contributing to Jay's campaign so he can fight back against these right-wing distortions and lies.

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:

Bernie Sanders Has A Plan... To Protect Us From the Real Bad Guys And From The Sold Out Guys

Last week a right-wing, corporate judge struck down a Commodity Futures Trading Commission rule meant to prevent gambling from driving up gas prices. What a miracle it would be for a debate moderator to ask Obama and Romney to explain their respective positions. Bernie Sanders was more than willing to explain his own-- as usual, a lonely, independent voice on behalf of American working families.

"Today's court decision is another victory for Wall Street speculators who have been given a green light to rip off the American people at the gas pump. The Dodd-Frank Wall Street Reform and Consumer Protection Act clearly required the Commodity Futures Trading Commission to impose strict limits on oil and gasoline trading to eliminate, prevent, or diminish excessive oil speculation. Sadly, one judge has disagreed and is preventing even the weakest rules on oil speculation limits to go into effect. This is wrong, and I hope the CFTC will appeal this decision.
 

"Even Goldman Sachs, perhaps the largest oil speculator on Wall Street, has indicated that speculators are driving up gasoline prices by some 56 cents a gallon at the pump. I will continue to do everything I can to eliminate excessive oil speculation to make sure that the price of gasoline and heating oil are based on the fundamentals of supply and demand-- not Wall Street greed."

Needless to say, Bernie's not stopping there. Like many insightful progressives, he's worried about what Obama and Boehner are cooking up in the way of a Grand Bargain in the lame duck session after the elections. As you know, Blue America has been trying to raise money for 16 House candidates who have adopted anti-Auserity measures as part of their election platforms and both of our Senate challengers are on the same page-- literally and figuratively-- with Bernie on that as well: Growth and Prosperity not more Trickle-Down and Austerity. Bernie:

There are two major economic and budgetary issues which Congress must address in the lame-duck session or soon afterward. First, how do we reverse the decline of the middle class and create the jobs that unemployed and underemployed workers desperately need? Second, how do we address the $1 trillion deficit and $16 trillion national debt in a way that is fair and not on the backs of the elderly, the children, the sick or the poor?

Both of these issues must be addressed in the context of understanding that in America today we have the most unequal distribution of income and wealth of any major country on earth and that the gap between the very rich and everyone else is growing wider. Today, the top 1 percent earns more income than the bottom 50 percent of Americans. In 2010, 93 percent of all new income went to just the top 1 percent. In terms of wealth, the top 1 percent owns 42 percent of the wealth in America while the bottom 60 percent owns just 2.3 percent.

In my view, we will not make progress in addressing either the jobs or deficit crisis unless we are prepared to take on the greed of Wall Street and big-money interests who want more and more for themselves at the expense of all Americans. Let's be clear. Class warfare is being waged in this country. It is being waged by the Koch brothers, Sheldon Adeslon, Mitt Romney, Paul Ryan and all the others who want to decimate working families in order to make the wealthiest people even wealthier. In this class war that we didn't start, let's make sure it is the middle class and working families who win, not the millionaires and billionaires.

In terms of deficit reduction, let us remember that when Bill Clinton left office in January of 2001, this country enjoyed a healthy $236 billion SURPLUS and we were on track to eliminate the entire national debt by the year 2010.

What happened? How did we go from significant federal budget surpluses to massive deficits? Frankly, it is not that complicated.

President George W. Bush and the so-called "deficit hawks" chose to go to war in Afghanistan and Iraq, but "forgot" to pay for those wars-- which will add more than $3 trillion to our national debt.

President Bush and the "deficit hawks" provided huge tax breaks to the wealthiest 2 percent of Americans-- which will increase our national debt by about $1 trillion over a 10-year period.

President Bush and the "deficit hawks" established a Medicare prescription drug program written by the pharmaceutical and insurance industries, but they "forgot" to pay for it-- which will add about $400 billion to our national debt over a 10-year period.

Further, as a result of the greed, recklessness, and illegal behavior on Wall Street, this country was driven into the worst recession since the Great Depression which resulted in a massive reduction in federal revenue.

And now, as we approach the election and a lame-duck session of Congress, these very same Republican "deficit hawks" want to fix the mess they created by cutting Social Security, Medicare, Medicaid and education, while lowering income tax rates for the wealthy and large corporations. Sadly, they have been joined by some Democrats.

The fiscal crisis is a serious problem, but it must be addressed in a way that will not further punish people who are already suffering economically. In addition, it is absolutely imperative that we address the needs of 23 million Americans who are unemployed or underemployed.

What should working families of this country demand of Congress in response to these crises? Let me be specific:

First, at a time when the effective tax rate for the rich is the lowest in decades, we must repeal the Bush tax breaks for the top 2 percent which will reduce the deficit by $1 trillion over the next 10 years.

Second, we must recognize that Wall Street caused the economic crisis, and that it has a responsibility to reduce the deficit. Establishing a 0.03 percent Wall Street speculation fee, similar to what we had from 1914-1966, would dampen the dangerous level of speculation and gambling on Wall Street, encourage the financial sector to invest in the productive economy and reduce the deficit by $350 billion over 10 years. Importantly, this fee, like similar levies in many other countries, would not apply to ordinary investors, retirees or parents saving to send their kids to college. Rather, it would apply to Wall Street investment houses, hedge funds and speculators who sell credit default swaps, derivatives and operate other risky financial schemes that nearly brought down the entire economy.

Third, we have got to prohibit offshore tax shelters. Each and every year, the United States loses an estimated $100 billion in tax revenues due to offshore tax abuses by the wealthy and large corporations. The situation has become so absurd that one five-story office building in the Cayman Islands is now the "home" to more than 18,000 corporations. According to a recent report by James Henry, a former chief economist at McKinsey, the wealthiest people in the world are hiding between $21 trillion to $32 trillion in offshore tax havens to avoid paying taxes. About a third of this amount, according to one estimate, is from wealthy Americans. The wealthy and large corporations should not be allowed to avoid paying taxes by setting up tax shelters in Panama, the Cayman Islands, Bermuda, the Bahamas or other tax haven countries. Cracking down on these tax evaders could reduce the deficit by about $1 trillion over the next decade.

Fourth, at a time when we have almost tripled military spending since 1997 and spend nearly as much on the military as the rest of the world combined, we must reduce unnecessary and wasteful spending at the Pentagon. According to a number of experts, the Pentagon today cannot account for hundreds of billions of dollars in its budget. Even Sen. Tom Coburn (R-Okla.), perhaps the most conservative senator in this country, believes that we could reduce defense spending by $1 trillion over a 10-year period while ensuring that the United States continues to have the strongest and most powerful military in the world.
Fifth, we have got to eliminate tax breaks for companies shipping American jobs overseas. Today, the United State government, despite our losing over 55,000 factories in the last 10 years, continues to reward companies that move U.S. manufacturing jobs overseas through loopholes in the tax code. Eliminating these loopholes would raise more than $582 billion in revenue over the next ten years and bring jobs back home to America.

What else? Ending corporate welfare for big oil, gas and coal companies; requiring Medicare to negotiate with the pharmaceutical companies for lower drug prices; taxing capital gains and dividends the same as work; establishing a progressive estate tax; and eliminating waste, fraud and abuse at every agency in the federal government would reduce spending by more than $350 billion and raise a significant amount of revenue without harming the middle class.

Taking these steps would reduce the deficit by more than $5 trillion.

Finally, and importantly, with these kinds of savings we could invest aggressively in rebuilding our crumbling infrastructure, transforming our energy system away from fossil fuels and restoring our manufacturing base. That investment could create millions of decent paying jobs, make our country more productive and help us lead the world in addressing the crisis of global warming.

Despite what virtually all Republicans and some Democrats want, we must not balance the budget on the backs of a collapsing middle class or the poorest people in our society.

Despite what virtually all Republicans and some Democrats want us to ignore, we must create the millions of jobs working families still desperately need.

The American people have been very clear, in poll after poll, that they do not want to cut Social Security, Medicare, Medicaid, veterans' needs, education and other vitally important programs. They also have been clear that they do want the wealthy and large corporations to start paying their fair share of taxes. This agenda, the agenda of the American people, is what I will be taking into the lame-duck session. I ask for your support.

You can give him that support here.

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.

Norman Solomon Is Still Working Hard To Help Elect Progressives To Congress

This week Norman sent an e-mail to his supporters asking them to contribute to two steadfast, independent-minded progressive candidates who the DCCC is-- at best-- ignoring, Rob Zerban and Lee Rogers, the challengers, local Democrats have nominated to take on, respectively, Paul Ryan and Buck McKeon. Each is a powerful committee chairmen who does far more damage than any Republican the DCCC is spending tens of millions of dollars to defeat. But Steve "Reptilian" Israel-- unlike his GOP counterpart, Pete Sessions at the NRCC-- doesn't believe in challenging GOP leaders or committee chairs. He isn't going after a single one-- despite the fact that both Ryan and McKeon are very vulnerable and each is in a district Obama won in 2008 and is likely to win again in 2010. This was Norman's original letter:

It’s hard to think of two more odious members of Congress than safety-net slasher Paul Ryan and pork-barrel militarist Buck McKeon.

I’m urging supporters of my campaign to help defeat two of the worst Republicans in the House.

You can click here to help defeat Ryan.

Or click here to help beat McKeon.

In his Wisconsin home district this fall, Ryan’s name will appear on the ballot twice. Ryan doesn't seem very confident about prospects for the Romney-Ryan ticket; he's anxious to hold onto his congressional seat.

You can help progressive Democrat Rob Zerban defeat Paul Ryan so he can lose twice in the same election!

Meanwhile, the Democratic Party national leadership continues to give a pass to Buck McKeon-- the GOP’s chair of the House Armed Services Committee who keeps exercising huge power to enrich multibillion-dollar military contractors.

McKeon is one of the Pentagon’s most generous (with our tax money) friends on Capitol Hill. In the LA area, the campaign by progressive Democrat Lee Rogers to unseat McKeon is uphill-- and deserves our support.

Rob and Lee will appreciate whatever you can do to help them rid Congress of firebrands for top-down class war and perpetual war.

So, if you want to add Paul Ryan to the ranks of the unemployed, click here.

And if you want to do the same for Buck McKeon, click here.

This fall, I’m glad to endorse candidates in congressional races with uncertain outcomes-- and with the potential to change Congress and our country for the better!

Yesterday Norman was in Wisconsin-- in fact, in Paul Ryan's district. He sent me this:

Waking up this morning in Janesville-- the Wisconsin city that Paul Ryan calls home-- I thought about people, near and far, whose lives are threatened by the policies that Ryan and the entire Republican Party are pushing with a vengeance.

Lives are on the line. Here in Janesville, for instance, a 45-year-old man named Paul Mines lives in transition housing after being homeless. He knows what's at stake-- and that's why he's so opposed to Paul Ryan's political message.

Mines told a reporter that the attack on the social safety net is "messing with my survival." His health problems include back pain, high blood pressure and a serious heart ailment. Government programs give him access to more than a dozen prescription drugs each day.

Norman, Rob and Lee are all adamantly opposed to the failed Austerity agenda Ryan and his right-wing cronies are pushing. That's why Rob and Lee are among the 16 candidates on our Prosperity Economics ActBlue page. Please consider contributing to both of them, either of them-- or any of the candidates on the page.

Who Will Stand Up To The Boehner-Obama Steam Roller After The Elections?

Boehner and Obama have a bridge they want to sell you after the election... but before the new Congress is sworn in. It should be pretty ugly and we need to wonder who's going to stick up for any citizens out there who can't afford to hire lobbyists. Will a strange bedfellow coalition of Progressives and Teabaggers be strong enough in the House. How about a filibuster led by Rand Paul (R-KY), Mike Lee (R-UT), Jeff Merkley (D-OR) and Bernie Sanders (I-VT) in the Senate? And, if I read David Atkin's post at Digby's place right on Monday, maybe Sheldon Whitehouse (D-RI) will be joining them as well. he and Dante sat down with Whitehouse in Charlotte and asked him about protecting Social Security and Medicare, particularly about the Obama/Boehner plans for a Grand Bargain which looks like quite a bargain for the rich and the shaft for working families. Whitehouse felt, like many progressives, that the fatal flaw in Simpson-Bowles is how the right wants to use this to get at Social Security. Fatal is a good word next to flaw in this instance, but Obama wants this bad and he'll probably fight harder and smarter to wreck Social Security for Wall Street than Bush did after he won his second term. White House says Social Security cannot be rolled into the equation and that the Defending Social Security Caucus will fight. There are 15 members and at least two of them, Schumer and Menendez are total Wall Street puppets and will probably cause more harm inside the caucus than if they weren't part of it. The other members are Dan Akaka (D-HI), who's retiring, Richard Blumenthal (D-CT), Barbara Boxer (D-CA), Sherrod Brown (D-OH), Maria Cantwell (D-WA), Tom Harkin (D-IA), Frank Lautenberg (D-NJ), Jeff Merkley (D-OR), Barbara Mikulski (D-MD), Jack Reed (D-RI), Bernie Sanders (I-VT), Debbie Stabenow (D-MI) and Whitehouse.

Whitehouse: Social Security has a $2 trillion surplus. It contributes virtually not at all to our national debt and deficit. It has long been kind of a bogeyman to the Republican Party that we have Social Security. They want to get rid of it, they want to privatize it, they never liked it. We cannot use this debt and deficit discussion as an excuse or vehicle to go after Social Security which is a separate discussion. It's sound until 2027, I think, at this point. It has got a huge surplus, and we need to make sure there is airspace between our debt and deficit discussion and Social Security. That's one of the reasons I helped found the Defending Social Security Caucus, and one of the things I think has happened in the Senate, not invisibly perhaps as it might have, but visibly to those of us who are there, setting Simpson-Bowles aside, the discussion about using Social Security to solve the deficit, has really gone away. And I think in part it's because I believe we're up to thirty Senators who have signed on and said, "No way. No way. Not going to happen." And we make a blocking minority that makes that very difficult for the White House. They've backed off, everybody has backed off. And I think that's an important line. We have a success so far. But when you look at $2 trillion that Wall Street would love to get its hands on, and privatizing Social Security that Wall Street would love to do, this is a fight that's not going to go away. We're in a good position on it now, we should not give in, and we need to be alert really for the rest of our lives to protect against those efforts to encroach on it.

...Atkins: Thrilled about your answer on Social Security and thank you for all your activism on that. In terms of the other major issue which is, of course, Medicare, I guess a lot of plans have come out and I'm surprised there hasn't been more of a push for raising the caps as opposed to making earned benefit cuts. What is going on there, and what do you expect to see happen during the lame duck session?

Whitehouse: Well, either in the lame duck session or assuming we do a continuing resolution in March when we have the sort of big budget discussion, I think those are issues that are going to be on the table. I'd love to raise the cap on Social Security, so that someone who is making $100 million isn't paying the same amount into Social Security as someone making $100,000. That just doesn't make to me any logical sense. If Social Security could use the support in way out years, why not get started now when it's an easier foundation to build?

I think the Medicare discussion is one that we need to grab a hold of and win. And we need to do two things: one is to point out that there's a difference between savings in the Medicare system that come from making a better healthcare system for people, and cutting people's benefits and giving them less access to the healthcare system. And there's a clear distinction between those two strategies, and the Republicans have worked very hard to blur those two, and to say that the $716 billion in savings in the Affordable Healthcare Act is actually a cut. It's not. Unless you're a big insurance company or a provider. Then maybe it's a cut to you, but it's a signal to get more efficient and deliver the care better. And to kind of get that morphed into the plan for the Republicans to take Medicare and get it turned into a voucher program is something we've got to be really, really clear on. And the last point I would make, even though this gets a little bit techy and geeky, is that there really is a huge savings potential not in Medicare per se but in our healthcare system from better healthcare delivery, more primary care, more prevention, less administrative overhead, electronic health records, paying doctors for results and keeping patients healthy rather than procedures and treating them when they're sick, that whole arena of activity is estimated to saving between $700 billion a year and $1 trillion a year in American healthcare, and that needs to be a Democratic issue. That is how you bring down the cost of Medicare and veterans' care, and TriCare, and Blue Cross and United and all of it, in a way that people in the country can see difference in their lives in better care that costs less because you're not getting sick, you're not taking drugs that react badly with each other because nobody kept track that they do react badly with each other and you prescribe both of them. I mean, that's an arena we need to put light into and we need to own. It's good policy, it's innovation, it's high tech, it's all the things that we're for.

We need to strengthen the Members of Congress who are willing to hold the line for working families. In the House, we've found 16 candidates from every part of the country using the Prosperity Economics framing as a way for campaigning against Ryan's and Romney's and Wall Street's toxic Austerity Agenda. And, of course, in running for the crucial Massachusetts and Wisconsin Senate seats are two stalwarts for economic justice issues, Elizabeth Warren and Tammy Baldwin. Brother, if you can spare a dime, spare it now.

Shouldn't The Domestic Debates All Be About Prosperity Economics As An Alternative To The Bleak Austerity Agenda?

It would be useful to see a national discussion of Prosperity Economics as the alternative to the Austerity agenda Wall Street has prescribed for America before the November elections-- and before Obama and Boehner can foist their Grand Bargain on us. There are 16 congressional candidates who have been making an effort to do that in their districts and today Progressive Caucus co-chairs Raúl Grijalva (D-AZ) and Keith Ellison (D-MN) are holding a hearing on year-end Congressional budget and fiscal issues, focussing on job creation, the impending budget sequestration process, realistic ways to increase revenue and reduce the national debt, and how to preserve Medicare, Medicaid and Social Security-- basically... Prosperity Economics. As much as I'd love to see Hacker's work being discussed on TV and on the front pages of the NY Times and even USAToday, I was happy to see a thorough examination by Paul Rosenberg at Al Jazeera this week. He also notices that the media is pretty much ignoring the stampede towards Austerity and that questions that go against the grain are the questions the media should be looking at.

They're also at the core of a new proposal laid out in a recent report, "Prosperity Economics: Building an Economy for All," which is supported by leading labour, civil rights and community organisations, and is being adopted by a growing list of progressive Democratic candidates. "Prosperity economics is built on three pillars: growth, security and democracy," the report explains. "These pillars reinforce one another and are intertwined politically and economically."

In a recent teleconference, the reports' lead author, Yale political science professor Jacob Hacker, explained, "Instead of the austerity agenda that we have now, focused on debt, this growth agenda is focused, really, on restoring broad-based economic growth and our democracy."

"The current debate is focused on how severely to cut, not whether to cut" government spending, Hacker added, "That's diametrically at odds with dealing with the two great challenges we face today, which are not the deficit, but rather the jobs crises, and the long-term stagnation and decline of the middle class." 

Once again, the same pattern holds: Even if you want to know about controlling the federal deficit-- the wrong question to be obsessing over at this time-- you have to ask about these other questions about restoring broad-based prosperity in order to make sense of the big-picture situation. As I pointed out in a recent column, even Paul Ryan understood the need for deficit spending when he was defending Bush's third stimulus package back in 2002:

"We've got to get the engine of economic growth growing again, because we now know, because of the recession, we don't have the revenues we wanted to, we don't have the revenues we need to fix Medicare, to fix Social Security, to fix these issues, we've got to get America back to work."

There are a lot more people out of work now than there were in 2002, so Ryan's logic then applies even more forcefully than it did back then. But Hacker and his co-author, Nate Lowentheil, have a much  deeper understanding of what this requires. It's not just a matter of knowing the economic history of how mass middle classes were created via modern welfare states in Europe and North America after the devastation of the Great Depression and World War II, though that certainly helps. In the report itself, the authors restate the accumulated wisdom borne of that experience:

"Prosperity doesn't just 'trickle down' from the top. It depends on the common investments and sources of security we agree on as members of a democracy, on institutions-- especially unions-- that ensure that gains are broadly shared, and on a healthy democracy that can sustain sound economic policies and prevent today's economic winners from undermining the openness and dynamism of the economy."

...With the debate still framed by asking the wrong question-- about debt, rather than growth-- Hacker  warned, "there is a real risk that even if President Obama wins, we could end up with a kinder, gentler version of austerity economics-- tax cuts that are slightly less skewed, cuts in public investment, cuts in economic security that are only slightly less draconian than those in the leading budget blueprints on the right."

...Toward this end, a stand-alone summary of policy recommendations at the Prosperity For All website briefly describes the three inter-locking pillars of the approach and how specific policies exemplify their synergy for America as a whole, as well as their direct value to individual Americans. The proposals aren't new, particularly. What is new is their presentation as part of an integrated vision of what shared prosperity looks like, and what it takes to achieve.

On the subject of economic growth, defined as "dynamic, innovation-led growth, grounded in job creation, public investment and broad opportunity," the authors write, "We must take immediate action to jump-start our sagging economy. Going forward, we need to invest in people and productivity that will lead to good jobs and rising wages." Examples of specific policy recommendations include:

• Invest $250 billion per year for the next six years to rebuild our nation's crumbling roads, bridges, ports, airports and public transportation systems.
• Restore America's manufacturing base by ending the trade deficit and tax incentives for offshoring.
• Provide help to states and localities to hire back teachers, first responders and other public servants.
• Ensure decent wages and job quality by guaranteeing that workers have the right to form unions and to collectively bargain.

On the subject of economic security, defined as "security for workers and their families, the environment and government finances," they write, "Markets work better when working families feel a basic security for their futures. Only when families can be sure they will not be deprived of necessities like health care and retirement security can we create a dynamic and competitive economy." Specific policy recommendations include:

• Build on the Affordable Care Act by adding a public option with the clout to push back against insurance companies so everyone has access to affordable, quality health care.
• End the Bush tax cuts for the wealthiest 2 per cent of Americans. The Bush tax cuts are the largest single contributor to our current revenue shortfall.
• Increase public investment in research and development for clean energy technologies by $15 billion per year. 
• Implement a financial transaction tax to discourage short-term speculation and reduce the chance of financial crises. The tax would be invested publicly and fund job creation.

On the subject of democracy, defined as "democratic voice, inclusivity and accountability-- in Washington and the workplace," they write: "Democracy means we have a strong system of checks and balances both in our government and in the private sector that empowers citizens, guarantees more inclusive decision making and creates strong mechanisms of accountability." Specific policy recommendations include:

Protect the right to vote to ensure every voice is heard in the political process. Repeal disenfranchisement and voter ID laws and adopt same day voter registration, provisional voting and other measures to maximize voter participation and access.

Guarantee every worker has a voice in the workplace, including a quick, fair process for workers to choose union representation and have the power to bargain collectively. Enforce stronger penalties on companies that violate labor laws.

Free government from corporate interests by reinstating the firewalls between investment and banking.
Improve consumer protections against unfair credit card fees and practices, predatory lending and bankruptcy rules biased in favour of creditors.

The comprehensive framework of prosperity economics-- and the research it draws on-- provides the vital context for understanding these policies not as a laundry-list of disparate ideas, but as interlocking aspects of a single, unified vision.

The just-completed Democratic National Convention sounded many notes in harmony with the prosperity agenda. That's hardly surprising, given the Democratic Party's long history of building American prosperity during the 20th century. But will Democrats actually stand firm for policies and programs that will make shared prosperity a reality, or will they return to President Obama's mindless mad scramble for an unattainable and disastrous "grand bargain" that will slash prosperity-promoting government programs in return for Republicans finally agreeing to some modest restoration of tax levels from the past? That is the real question that Americans should be worried about.

Some Democrats clearly understand the underlying synergistic logic of Hacker and Lowentheil's proposal. Liberal bloggers Howie Klein at Down With Tyranny and Digby at Hullabaloo have repeatedly called attention and urged support for a list of progressive Democratic challengers who've signed on to support the prosperity agenda, and Digby herself was partnered with Hacker on the teleconference I mentioned earlier.

But the logic of Obama's infatuation with a "grand bargain" is antithetical to the logic of prosperity economics. Prosperity economics and austerity economics have diametrically opposed purposes-- sharing prosperity among the many vs hoarding it for the few-- and each has its own self-reinforcing dynamic. There is no middle way that captures "the best of both", because each has a radically different idea of what "best" is. 

As Digby noted in response to Obama's convention speech, Obama has promised not to cut programs to give tax cuts for millionaires. (That's certainly much better than Romney-Ryan, who plan to do exactly that.) But he did not promise not to cut programs in return for tax hikes for millionaires-- and that's the very essence of the "grand bargain" strategy, a strategy that only makes sense if you're forever focused on asking the wrong questions.

Fixing The Deficit Without Making Things Even Worse

Wall Street's proposals to fix the deficit may be wonderful for Wall Street... but they are WRONG for America

Thursday night, when everyone was finishing up with the Democratic convention in Charlotte, author David Korten (Agenda For A New Economy) tweeted a recommendation for an article by John Cavanagh ay Yes! Magazine, 7 Ways To End The Deficit (Without Throwing Grandma Under The Bus). Cavanagh is looking for a more just, more secure, more sustainable economy... as Korten did in his book. And as we have been over the past month in our exploration of Jacob Hacker's alternative to the failed Austerity Agenda Paul Ryan and Mitt Romney are pushing.

Along with 16 congressional candidates we've been looking at the proposals Hacker and his partner Nate Loewentheil have made-- "Prosperity Economics"-- to help us create prosperity across all income classes, reform our broken political system, invest for the long term and, not incidentally, fix the debt problem-- all without cutting vital government programs. Here's how Dr. David Gill, a Democrat in downstate Illinois running strongly for an open seat (IL-13) put it:

The politics of austerity embraced by Paul Ryan and the rest of the Republicans are not a solution to the ongoing economic malaise here in central Illinois-- in fact, such policies will only exacerbate the real pain that has been experienced by so many of my neighbors for so many years now. The ever-growing income gap between the extremely rich and the rest of us has reached historical proportions, and it is this gap that fuels economic misery on "Main Street." Politicians who refuse to acknowledge the need to have corporations and millionaires and billionaires pay their fair share are serving but a tiny minority of their constituents, and they are forcing us to remain in an economic quagmire. American workers are amongst the most productive in the world, but with real wages stagnant for 30 years now, with virtually all the gains going to a small fraction of society, we are left with a populace unable to enjoy the fruits of its labor, and unable to fuel economic recovery. Austerity is not the answer-- investing in people is the answer! Make the millionaires and billionaires pay their fair share. Put in place Improved Medicare for All, which will provide an economic stimulus the likes of which we've rarely seen by taking back the 30+% of our health care dollars currently wasted on the private health insurance industry. And fully invest ourselves in the Green Revolution so desperately needed to ensure clean air and clean water for generations to come, producing hundreds of thousands of jobs in the process. These are the steps which will restore our economic health and bring additional benefits in the bargain.

There was one sour note in Clinton's speech on Wednesday and one sour note in Obama's speech on Thursday-- and they were the same sour note: threats of a so-called Grand Bargain with the Republicans, a Grand Bargain based on conservative plans to further shred the social safety net. The last time Democrats entered into a Grand Bargain with the Republicans-- that time is was Teddy Kennedy and George W. Bush-- the end result was No Child Left Behind. Obama's deal with Boehner would be far worse-- and catastrophic for the Democratic Party brand and their reputation as a party willing to stand up for the legitimate aspirations of working families. It's why, in the end, even with the potential nightmare of a Romney/Ryan regime, I won't be voting (albeit safely in California) for Barack Obama. Obama could learn a lot from Cavanagh's deficit reduction proposals, far more than what he seems intent on doing for his party's corporate donors. Cavanagh reports that there are seven steps that, together, more than eliminate the deficit while making the country more equitable, green, and secure.

Our first three proposals could bring in $329 billion a year; this alone would solve the deficit problem while helping to close the yawning inequality gap.

• 1.  Tax Wall Street: $150 billion per year. A tiny tax on stock and derivatives transactions, which several European countries are on track to adopt, would discourage Wall Street speculation, fill the hole in the deficit left by the Bush tax cuts, and leave plenty left over to fund lots of programs. The National Nurses Union and many other allies are fighting hard for this.

• 2.  Tax Corporations and Stop Tax Haven Abuse: $100 billion per year. The Financial Accountability and Corporate Transparency coalition has pointed out that one of the main ways that corporations avoid paying taxes is by declaring their profits in overseas tax havens like the Cayman Islands. 
 
• 3.  Tax the Wealthy Fairly: $79 billion per year. Our rigged tax code lets CEOs pay a lower tax rate than their secretaries do (as Warren Buffett keeps pointing out). The proposed Fairness in Taxation Act (HR 1124) would address this by adding five additional tax brackets for incomes over $1 million.

These three policy changes would go a long way toward making our society more equal, and that means better health, too. There is a terrific body of global evidence, a lot of it compiled by British researchers Richard Wilkinson and Kate Pickett, that more equal societies are much healthier. People at all income levels live longer; they are more fulfilled; and there is less violence. The United States, a relatively equal society as recently as the 1970s, is now off the charts in terms of wealth and income inequality. It doesn’t have to be that way. Just as we created a more just and vibrant economy and a strong middle class through fair taxes between 1940 and 1980, we can do it again through progressive taxation.

The second source of revenue would make the economy more green, a key imperative in a world where the environmental crisis is now as deep as the economic one. We found two simple ways to raise revenues and help save the environment.

• 4.  Tax Pollution: $75 billion per year. A tax on the carbon content of fossil fuels would reduce our dependence on oil while cutting air pollution and emissions of greenhouse gases. And, as economist Robert Frank pointed out on August 25 in the New York Times, “News that a carbon tax was coming would create a stampede to develop energy-saving technologies.”

• 5.   End Fossil Fuel Subsidies: $12 billion per year. This call should unite left and right. Why would anyone want to maintain a giant government subsidy to an industry that is the world’s major contributor to fossil-fuel emissions? 350.org has made this a centerpiece of their work. We should be able to win this.

Finally, there are simple ways to cut the military while making the country and the world more secure. More than half of government discretionary spending now goes to the military. Congress has long avoided cuts, in part because they equate military spending with jobs, but IPS has pointed out that almost every other industry employs more workers per dollar than the military. Plus, there is now bipartisan support for two sets of significant cuts.

• 6.  End Military Waste: $109 billion per year. A broad spectrum of experts has found over $100 billion a year in waste that could be eliminated with no sacrifice in security. Three recent commissions, two of them bi-partisan, have recommended roughly $1 trillion in military cuts over 10 years.

• 7.  Close a third of our overseas bases and our Iraq operations: $21 billion per year. Over two decades after the Cold War ended, the United States still maintains roughly 1,000 military installations in other countries. A majority of the President’s own deficit commission, which includes three Republican senators-- the National Commission on Financial Responsibility and Reform-- backed a proposal to close one third of our overseas military bases.

These seven simple steps would raise close to $550 billion a year. They would quickly erase the fiscal deficit  and return the country to a healthy budget surplus. There would be hundreds of billions left to invest in key sectors that could make the country more secure, more green, and more equitable: care jobs, green jobs, infrastructure jobs.

In other words, this plan could help erase the nation’s dangerous social and environmental deficits.
Many groups-- from Jobs with Justice to National People’s Action to the AFL-CIO-- are organizing to counter a push by the Right to use the deficit crisis to shred social programs and our nation’s safety net. Let’s up the ante and spread the message. America is not broke. We have plenty of resources to rebuild shared prosperity in the U.S.

Would you like to see the country move down this path rather than the path the GOP and Wall Street are insisting on? The Prosperity candidates will help give Obama the strength and resolve he needs to resist Austerity. Please do what you can to help them get elected in November.

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.