Sign Krugman's "Manifesto For Economic Sense"

By Isaiah J. Poole, cross-posted from Campaign for America's Future

Tom Tomorrow

Economists Paul Krugman and Richard Layard, the latter of the London School of Economics, today posted a "Manifesto for Economic Sense" that lays out a sound framework for reviving the global economy.

"I’ve been arguing for a long time that policy makers have misunderstood the nature of our economic crisis, mistaking symptoms for causes, and responding in ways that make the situation worse," Krugman wrote yesterday on his blog at The New York Times. The goal of the manifesto is, in the words of the manifesto itself, to "offer the public a more evidence-based analysis of our problems" and change the direction of the economic debate away from austerity and toward using government as a kindle for rebuilding the middle class.

"A key priority now is to reduce unemployment, before it becomes endemic, making recovery and future deficit reduction even more difficult," the manifesto says.

Many of the signatures on the manifesto are those of economists and policy experts, but you are encouraged to sign the manifesto as well to show your agreement with its basic principles.

In an op-ed in the Financial Times, Krugman and Layard explained the thinking behind the manifesto. "More than four years after the financial crisis began, the world’s major advanced economies remain deeply depressed, in a scene all too reminiscent of the 1930s," the piece begins, because their economic leaders, and conservatives in the United States, insist on replicating the failed economic strategies of the 1930s before the New Deal.

Instead, the manifesto calls for economic experts and policy makers to speak up more loudly against the arguments that "austerity will increase confidence and encourage recovery"—there is no evidence that austerity policies are having that effect anywhere in the world—and that a key causes of our weak economic recovery are structural, rather than a general lack of spending and demand.

The statement echoes the same themes of our own 2010 "Don't Kill Jobs" economic manifesto, signed by more than 300 economic experts. That statement urged the president and Congress to "redouble efforts to create jobs and send aid to the states whose budget crises threaten recovery by forcing them to lay off school teachers, public safety workers, and other essential workers. It also makes sense to invest in public service jobs—and in infrastructure projects for transportation, water, and energy conservation that will make our economy more productive for years to come."

If our political leadership had taken that message to heart in 2010, it would not have been necessary for Krugman and Layard to post their own manifesto with the same message. But Washington conservatives still refuse to admit the failures of their policies and end their wrong-headed obstruction in Congress. It's exasperating to have to repeat the message over and over, but as the Krugman-Layard manifesto concludes, "The whole world suffers when men and women are silent about what they know is wrong."

What America Can Learn From The Revolt In Europe

By Robert Reich, cross-posted from his website

Who’s an economy for? Voters in France and Greece have made it clear it’s not for the bond traders.

Referring to his own electoral woes, Prime Minister David Cameron wrote Monday in an article in the conservative Daily Telegraph: “When people think about the economy they don’t see it through the dry numbers of the deficit figures, trade balances or inflation forecasts — but instead the things that make the difference between a life that’s worth living and a daily grind that drags them down.”

Cameron, whose own economic policies have worsened the daily grind dragging down most Brits, may be sobered by what happened over the weekend in France and Greece – as well as his own poll numbers. Britain’s conservatives have been taking a beating.

In truth, the choice isn’t simply between budget-cutting austerity, on the one hand, and growth and jobs on the other. 

It’s really a question of timing. And it’s the same issue on this side of the pond. If government slices spending too early, when unemployment is high and growth is slowing, it makes the debt situation far worse.

That’s because public spending is a critical component of total demand. If demand is already lagging, spending cuts further slow the economy – and thereby increase the size of the public debt relative to the size of the overall economy.

You end up with the worst of both worlds – a growing ratio of debt to the gross domestic product, coupled with high unemployment and a public that’s furious about losing safety nets when they’re most needed.

The proper sequence is for government to keep spending until jobs and growth are restored, and only then to take out the budget axe.

If Hollande’s new government pushes Angela Merkel in this direction, he’ll end up saving the euro and, ironically, the jobs of many conservative leaders throughout Europe – including Merkel and Cameron.

But he also has an important audience in the United States, where Republicans are trying to sell a toxic blend of trickle-down supply-side economics (tax cuts on the rich and on corporations) and austerity for everyone else (government spending cuts). That’s exactly the opposite of what’s needed now.  

Yes, America has a long-term budget deficit that’s scary. So does Europe. But the first priority in America and in Europe must be growth and jobs. That means rejecting austerity economics for now, while at the same time demanding that corporations and the rich pay their fair share of the cost of keeping everyone else afloat.

President Obama and the Democrats should set a clear trigger — say, 6 percent unemployment and two quarters of growth greater than 3 percent — before whacking the budget deficit.

And they should set that trigger now, during the election, so the public can give them a mandate on Election Day to delay the “sequestration” cuts (now scheduled to begin next year) until that trigger is met.

Austerity For Dummies

By Richard (RJ) Eskow, cross-posted from Campaign for America's Future

"I feel stupid," someone said the other day. "I consider myself well-informed, but I have no idea what the term 'austerity economics' really means."

Actually it's not that complicated, and most of the lesson plan can be found in today's headlines.

We'll explain austerity to you in six steps, and we promise it it won't take more than 900 words. Since adults read an average of 250-300 words per minute - and we know all of you are above average - our little course shouldn't take more than three minutes.

It's certainly worth knowing. Despite its many failures, "austerity economics" keeps remaking - and unmaking - the global economy. The only disagreement at this weekend's Republican debate was over which candidate would push austerity more aggressively. And austerity dominated the political agenda last year - "Deficit Commission," anyone? - until Occupy came along.

Merriam-Webster named "austerity" the "Word of the Year" for 2010. But like the monster from a 1950's science-fiction movie, it just keeps on growing. This week alone the name was invoked in government houses from Athens to Lagos.

What is this creature called "austerity," and why does it still hold so much power? If you've got three minutes, let's get started.


1. What is it?

The Longman Dictionary of Contemporary English defines "austerity" as "when a government has a deliberate policy of trying to reduce the amount of money it spends."

Wikipedia calls it "a policy of deficit-cutting, lower spending, and a reduction in the amount of
 benefits and public services provided," adding that it's "sometimes coupled with increases in taxes to pay back creditors to reduce debt."

Got that? Austerity backers want government to spend less on benefits and public services, and to pay back its creditors more quickly. Higher taxes aren't part of the plan and they're strictly optional.

2. What's austerity supposed to accomplish?

Austerity advocates don't just see lower deficits and reduced debt as tools to promote long-term economic health. They consider them ends in themselves - sometimes even as moral values.
Many austerity advocates see government spending as inherently evil. That goes for all government spending, including police, teachers, nurses, and firefighters.

Sure, some of them will admit there can be necessary evils or useful evils - usually weapons procurement or law enforcement. But spending is always evil.

Other people aren't philosophically opposed to government spending, but have been convinced that it has become unaffordable today.

3. What's the theory behind austerity economics?

To answer that, it's important to understand that the economics profession has been systematically taken over by well-funded conservative academics. They've created elaborate theoretical constructs to prove that government spending is economically destructive.

These include theories like 'Barro-Ricardo equivalence,' which says people won't spend money when they know their government's incurring debts they'll have to pay someday. Conservative economists like Robert Barro insist this is true even in times of widespread unemployement, like now, and argue against stimulus spending to create jobs.

Oddly, they find this theory more compelling than the idea that people aren't spending money because they don't have jobs.

Then there's supply-side economics, which argues that the best way to grow the economy is by cutting taxes. That means smaller government. Supply-siders also rely on the "Laffer curve," which says people will stop investing, producing, and creating jobs if taxes are too high.

Austerity advocates also argue that international markets will lose confidence in governments if they don't curb spending and will charge them higher interest. So they even push cuts in Social Security, which doesn't even add to the deficit, because macroeconomists consider it 'government spending.'

4. Do these theories make sense?

Economists argue about this kind of thing ferociously, but we can look at the record and reach some common-sense conclusions about whether these theories are right or wrong:

Barro-Ricardo Equivalence: Wrong. To affect demand, government spending would have to be much higher than it is today.
Supply-Side Economics: Ridiculously wrong. We've had lower taxes and less regulation for more than a decade. Where are the jobs?
Laffer Curve: Also wrong. This country had a 70% tax rate or higher for top earners and the economy was doing much better than it is today. At 98% or higher, as the top rates once were in Great Britain, this could be a legitimate concern.

But now? Nah.

5. Does austerity work?

A resounding no. That's the conclusion reached in this paper from the International Monetary Fund. (The IMF was once the world's leading enforcer of austerity measures.)

And here are some clips from this week's headlines:

Austerity Reigns Over Euro Zone as Crisis Deepens, New York Times: " Europe’s leaders braced their nations for a turbulent year, with their beleaguered economies facing a threat on two fronts: widening deficits that force more borrowing but increasing austerity measures that put growth further out of reach."
Euro-Zone Manufacturing Activity Falls for Fifth Month, Wall Street Journal: " Manufacturing activity in the euro zone declined for the fifth straight month in December, although less sharply than earlier in the fourth quarter, according to a survey of purchasing managers released Monday. The survey is consistent with other indicators of recent activity, and together the numbers suggest the euro-zone economy contracted during the final three months of the year."
Merkel, Sarkozy stress growth a priority in eurozone crisis, call for quick Greek accord, Washinggton Post: "The German and French leaders stressed Monday that boosting economic growth in the 17-nation eurozone is a priority, a recognition that the focus on austerity cuts is unlikely to get Europe out of its debt crisis. Some analysts fear excessive austerity measures will take a heavy toll on weakening economic growth and push the eurozone into recession this year, in turn hindering the region’s deficit-cutting efforts.

Austerity's been a disaster for Great Britain and Europe, yet leaders are demanding more of the same - there, and here. They're ignoring the approaches that have worked in the past, as in the Great
Depression: Invest in short-term growth, put people back to work, and then address long-term deficit issues once the economy's back on its feet.

6. Why do people still push austerity?

Some do it because they're still under the influence of economists indoctrinated in that profession's conservative intellectual orthodoxy.

It's also in many politicians' interests to promote austerity, since wealthy and powerful people like the idea of lowering their own taxes.

One thing's for sure: They're not doing it because they're looking at the facts.
__________________

That wasn't too bad, was it? And it only took 877 words. If you were one of those who felt you didn't understand austerity, hopefully this has helped. You probably realize now that you understood more than you realized. In fact, you were never the problem.

The real problem with austerity economics is that there's less there than meets the eye.

That hasn't stopped leaders all over the world from insisting that it's the solution to the very problems it has caused, or which it has made worse. They're trying to impose even more of it on the global population.

Who's the dummy now?

For A Sane Economy, How About A Little Shame

By Richard (RJ) Eskow, cross-posted from Campaign for America's Future

The other day I was asked what one single thing could do the most to save our economy. What one idea or tool might help us create a more just society? My answer was "shame."

Shame isn't always a wasted or negative emotion. On the contrary, it can perform an important and socially useful function. Shame enforces our moral values even when legal and political institutions are too broken or corrupt to do so. Our society must learn to develop a "moral economics," and morality is often enforced through shame.

We live in a society where it's no longer considered shameful to oppose spending $6 billion to save nearly 8 million lives, even though that's less than $800 apiece. This kind of cynicism is so accepted, in fact, that even the more liberal political party doesn't dare suggest it. We live in a society where it's not shameful to let crooked bankers go unpunished while asking everyone else to pay the cost of their illegal enrichment. Nowadays even the lawbreakers aren't ashamed of themselves!

Incredible.

Perhaps no single change to our culture could do more to improve our lives than the rediscovery of the shame we used to attach to vile, greedy, selfish, and corrupt behavior. Consider how far we've fallen:

Not long ago a person would have been ashamed to appear in public if they had shattered the global economy by cheating millions of innocent people, accepted the outstretched hands of the same people they'd cheated by accepting an unconditional bailout, and then cheated them again.

Not long ago a politician who accepted the corrupting dollars of known criminal bankers immediately paid a steep price. (See the Keating Five, for example.)

Not long ago political figures and pundits were ashamed to openly advocate the deaths of millions of people just to provide tax advantages for the wealthy or ensure more favorable market conditions for predatory corporations.

In 2012, it's time for shame to make a comeback.

Where would it be useful? Here are just four examples out of thousands to choose from:

1. We should be ashamed that we don't give more to fight global AIDS.

A new medical study showed that developed nations could save 7.9 million lives in the next eight years by increasing AIDS funding for developing countries by $6 billion. That comes out to about $760 for each human being whose life would be spared. As an added benefit, an estimated 2.5 million people would never be infected with AIDS at all.

George W. Bush began the anti-AIDS program known as PEPFAR in 2003, and funding grew steadily every year until President Obama took office. It then flatlined in the first year and dropped in the second year, before increasing slightly in the third Obama budget:




Image source: Kaiser Family Foundation An ethical society -- not just ours, but of all developed nations -- would find it unacceptable to deny these programs the funding they need. Six billion dollars sounds like a lot, but the top 25 U.S. hedge fund managers made $22 billion last year. Taxing them at the same rate they paid under Ronald Reagan would cover the entire amount and would save all those lives.
But the Republican Party opposes anything like that, and President Obama hasn't asked for more.

2. Leaders of serial corporate criminal banks should be ashamed of themselves.

Jamie Dimon, CEO of JPMorgan Chase, makes it a habit to publicly express his resentment at the very mild and genteel criticisms that lawbreaking bankers must endure in our society. He does so with a combination of disingenousness and genuine self-deception that is a marvel to watch. In his latest outburst, Dimon complained about Occupy Wall Street by saying, "Acting like everyone who's been successful is bad and because you're rich, you're bad, I don't understand it. Sometimes there's a bad apple, yet we denigrate the whole."

Maybe those "bad apples" would provoke a different reaction if executives like Dimon weren't personally supervising such a large barrelful of 'em. Shortly after Dimon expressed his outrage, his bank and a number of its employees went on trial in Italy for allegedly deceiving a municipality into deliberately and deceptively purchasing bad investments. And while this Business Week article carefully points out that these alleged crimes took place before Dimon became CEO in 2006, he was already president and COO at the time of the worst allegations.

As president and COO, Dimon also presided over an institution that paid hundreds of millions of dollars after it bribed municipal officials in Alabama and misled investors in a fund called Magnetar. Under Jamie Dimon's leadership, JPMorgan Chase (or rather, its investors and insurers) paid a fine for breaking the law while promising not to do it again -- and then promptly did, at least three more times.

Similarly, GE Capital keeps breaking the law under CEO Jeffrey Immelt. In its latest settlement, a division of GE paid (or rather, its investors and insurers) paid $25 million after being charged with what the SEC described as "fraud for participating in a wide-ranging scheme involving the reinvestment of proceeds from the sale of municipal securities."

This is merely the latest in a GE crime spree that includes misleading investors, bribing Iraqi officials in the "oil for food" scandal, and what the SEC described as "fraud, deceit, or deliberate or reckless disregard of regulatory requirements [that] resulted in substantial loss, or significant risk of substantial loss, to other persons."

And yet Immelt, like Dimon, walks in polite society. He even leads President Obama's recently renamed "Jobs Commission."

Nobody is saying "because you're rich, you're bad." Nobody's calling Warren Buffett bad, for example. They're not even saying that about megamillionaire Jimmy Buffett -- and after the 6,000th hearing of "Margaritaville," that's pretty damned generous if you ask me.

But here's why words like "bad" get attached to executives like Dimon and Immelt: because they or their subordinates keep breaking the law, and either they don't care about it or they aren't competent enough as managers to stop it. Their arrogance and pronounced lack of remorse suggests it's the former rather than the latter. But either way, they're in no position to lecture others, especially since the lawbreaking keeps fattening their personal bank accounts.
They should be ashamed.

3. Officials and bankers should be ashamed that "too-big-to-fail" banks still exist.

As Simon Johnson notes, "Big banks represent the ultimate in concentrated economic power in today's economies. They are able to resist all meaningful reform that could really change their compensation schemes. Their executives want to get all the upside while facing none of the true downside. But capitalism without the prospect of failure is not any kind of market economy. We are running a large-scale, nontransparent, and dangerous government subsidy scheme for the benefit primarily of a very few extremely wealthy people."

The top U.S. banks now control more of the economy than they did before the Great Recession. The Fed is secretly bailing out Europe's too-big-to-fail banks as this is being written. And nobody's doing anything to change that.

They should be ashamed.

4. It's shameful to preach welfare for bankers and austerity for everyone else.

Meanwhile, in the great capitals of Europe and North America, the talk is of austerity economics. That means drastic cutbacks in government services that the public has paid for, like Social Security, that form the backbone of a prosperous, fair, and humane society. Leaders are calling these cuts "unavoidable" even as economists warn that they're already creating a new European recession.
It is, as Paul Krugman observes, something that will appear remarkable to future historians (if any history departments survive the austerity cuts to preserve the profession). They're not prescribing the "hair of the dog"; they're forcing the entire dead animal down the public's throat.

Why would Europe's leaders propose a set of policies that is already demonstrably making the economy worse? In part, probably because it's the easiest way to prop up the current financial system. Comprehensive economic reform would threaten the institutions they feel sworn to protect. Conventional thinking is also a big part of the problem -- and conventional thinking makes no room for a "moral economics."

For that they should be deeply, deeply ashamed. The Hall of Shame includes Angela Merkel of Germany, Nicolas Sarkozy of France, David Cameron of Great Britain, and -- at times -- Barack Obama of the United States. And if they're not capable of shame, the society around them must express that shame for them. It's already moved Obama's rhetoric, and we need more of the same in the coming year.

For those who preach the radical dismantling of the government that made our society great -- especially the Republicans of the United States -- no amount of shame can be enough. And for someone like Mitt Romney, who knows how to read financial reports and clearly knows better, it's worth noting that the eighth circle of hell is reserved for those who knew better and yet did wicked things anyway.

Let's make 2012 the Year That Shame Returned to the Economic Debate.

R.I.P. Austerity Economics (1921-2011)

By Richard (RJ) Eskow, cross-posted from Campaign for America's Future

This is the time of year when we're reminded of all the famous people who died over the last twelve months, a list which includes two of my favorite guitar players (Hubert Sumlin and Cornell Dupree). But there were also some notable non-human deaths in 2011, especially in the world of economic policy.

One of those deaths should have completely altered the political debate in Washington. The name of the deceased was "Austerity Economics," and it was first glimpsed in a 1921 paper by conservative economist Frank Wright. Austerity died of natural causes brought on by prolonged exposure to reality.

But the debate in Washington didn't change nearly enough after its passing. In the nation's capital, dead things still rule the night. 

Why Austerity?

"Austerity economics" backers claim that today's economic woes can only be fixed by dramatic reductions in government spending, which will lead to increased private-sector confidence and therefore to greater investment and growth.

But it's never worked. And if investors have lost confidence in the U.S. government's fiscal stability, they're sure not acting that way. There hasn't been this much demand for Treasury bonds since the government began tracking it twenty years ago, and they haven't performed as well since the go-go 1990s.

It's easy to understand austerity's attraction for power elites inside and outside of government. The people who suffer from austerity budgets aren't the kinds of people they know personally, since they're typically public employees like teachers, police, firefighters and the administrators of social programs; people who need government assistance, like the poor; and middle-class people with the temerity to either grow old or become disabled.

Austerity's attraction became even greater in the U.S. because once it became conventional wisdom that tax increases on the wealthy was "politically infeasible." That made it a program whose sole purpose was to cut government spending, lowering the pressure to increase taxes on the wealthy from today's historically low levels.

For a one-percenter, what's not to love? 



Austerity Comes of Age

The idea's been around in one form or another since that 1921 paper, and the International Monetary Fund (IMF) had been imposing it on Third World nations for decades.

But 2009 was the year that austerity really came of age. That was the year that a wealthy stockbroker's son named David Cameron began campaigning for Prime Minister of Great Britain on an explicitly pro-austerity platform.

It was also the year that Cameron helped to form a group named European Conservatives and Reformists (ECR) dedicated to electing like-minded politicians across Europe and helping them collaborate on ways to slash government spending. It was also the year that right-leaning Angela Merkel won reelection as the Chancellor of Germany with a stronger mandate than she'd been given in her first term.

With Nicolas Sarkozy as President of France, Great Britain was the only major European power not yet in the hands of the corporate-backed austerity crowd. 

The Global Sado-Erotic Thrill Machine

That changed with Cameron's election as Prime Minister in May 2010, an event that threw pro-austerity Americans into throes of near-erotic ecstasy. And if that sounds like hyperbole, consider conservative Anne Appelbaum's reaction to Cameron's budget in September of 2010:

Vicious cuts." "Savage cuts." "Swingeing (sic) cuts." The language that the British use to describe their new government's spending-reduction policy is apocalyptic in the extreme. The ministers in charge of the country's finances are known as "axe-wielders" who will be "hacking" away at the budget. Articles about the nation's finances are filled with talk of blood, knives, and amputation.
And the British love it.

What can I say? There are people who collect serial-killer memorabilia, too. But Appelbaum wasn't just speaking for herself. It became unacceptable for any politician in Washington, Democrat or Republican, to advocate anything other than an austerity budget for the United States.

And it was more than an economic strategy to its backers. Austerity became a way to demonize those who had suffered most from the banking abuses and self-indulgences of the wealthy, a totemic "blame the victim" response that turned the political debate into a grotesque inversion of morality. Again, Appelbaum:

"Not only is austerity being touted as the solution to Britain's economic woes; it is also being described as the answer to the country's moral failings."

Bad Metaphors vs. Good Economists

The Democratic President of the United States, Barack Obama, jumped onto the bandwagon with both feet by repeatedly lecturing Americans on the need for government to stop "spending beyond its means." Obama recycled the popular conservative metaphor of a family that has to sit around the kitchen table and decide how much money it has to spend.

That's one of the worst metaphors in modern politics. Does a family establish its own currency -- especially one that has the unique position of the dollar? Can a family borrow money at rates so low they're effectively less than zero? Would a family let Grandma go hungry because Junior bought too many Porsches out of the family kitty and then gambled it away on lousy mortgage investments?

The world's top economists, those who had successfully predicted the crisis of 2008, tried telling the rest of the world what was wrong with the idea: Joblessness and consumer fears were killing any chance of real recovery. More short-term spending was needed to get the economy moving again. Austerity would make things worse, not better.

But nobody listened. Austerity's S&M-like attraction had the world's elites in its grip. 

Death of a Delusion

And then something else came into the picture: Reality.

Cameron's austerity budget had a shattering effect on the already-struggling British economy. His government's financial stability was downgraded five times during his first year in power and retail sales had fallen 2.5 percent. Household income was projected to fall an additional 2 percent if his austerity plans were carried forward. Britain's modest employment gains were reversed, youth unemployment reached record levels, and income inequality was the worst it had been in more than half a century.

Anne Appelbaum's erotic dreams had become Great Britain's nightmare.

As Europe's ruling austerity class pushed forward with their plans, even the IMF tried to dissuade them. It was clear to anyone who wasn't blinded by ideology or political cynicism that austerity economics was a failed program. Even in countries like Greece, where government was far graver than elsewhere, the austerity programs imposed from outside threatened to destabilize society while other reasonable measures like improved tax collection were still not taken seriously enough.

And now the entire Eurozone hangs in the balance. Bankers became wealthy by treating governments as if they were mortgages, lending recklessly and pocketing their fees without considering the long-term reliability of their loans. European leaders insisted for months they were take the kind of sensible steps that should've been taken in the United States by requiring bankers to accept at least part of the losses for the bad loans they had issed.

That plan was quietly dropped last month. "Austerity economics" never calls for austerity from those who have gotten rich by being irresponsible, only from those who didn't benefit from it at all. 

The Afterlife

President Obama has dropped his austerity rhetoric, at least for the time being, but the Republicans have not. Listening to Mitt Romney discuss economics is like having a doctor wave a dead chicken over your head and saying he's decided to cast a spell on you rather than operate on that thing they found in your X-rays.

Aside from the bill introduced this month by the House Progressive Caucus to almost no media attention, there's no comprehensive plan for dropping this country's ineffective austerity strategy and replacing it with an agenda that works.

Rational solutions to our economic problems are being ignored. There won't be a real debate about alternatives to austerity until an entire political party, not just part of it, adopts this kind of program. Until then there will be chaos. And where there is chaos, austerity's powerful advocates can step in and take charge.

Austerity economics died in 2011 and is survived by the British, German, and French governments as well as the GOP and large portions of the Democratic Party. Instead of sending flowers, the family has asked the public to abandon all hopes of future economic growth.

"The Protester" Becomes Time's Person Of The Year, Wants More

By J.A. Meyerson, cross-posted from Truthout

Time Magazine Wednesday announced that its 2011 Person of the Year would be "The Protester." In the feature by Kurt Anderson, Time charts the wave of protests that defined 2011, from the Middle East to Europe to the United States and even, lately, to Russia.

By way of prognosticating where from here, Anderson confesses that "as long as government in Washington - like government in Europe - remains paralyzed, I don't see the Occupiers and Indignados giving up or losing traction or protest ceasing to be the defining political mode. After all, the Tea Party protests subsided only after Tea Partyers achieved real power in 2010 by becoming the tail wagging the Republican Party dog. When radical populist movements achieve big-time momentum and attention, they don't tend to stand down until they get some satisfaction."

In that analysis is contained the primary misunderstanding that underlies so much of the mainstream media's coverage of Occupy and its international brothers and sisters (and leads to such widespread misunderstanding about the nature of the movement). This year's "Protester" was not protesting government paralysis.

Governments are not the primary bearers of power in the geopolitical landscape. Bigger things are at work, and the biggest of these is the globalization of capital. Governments are, in fact, toppling in Europe because the political superstructures of the democratic world are so dearly at the mercy of the international financial class. Already in Greece and Italy (a country with a bigger economy than India's, borrowing at 7.2 percent), the democratic leadership has been replaced by what the media euphemistically call "technocrats" - really, these are bankers who have performed coups d'etat.

Global capital supersedes governmental sovereignty by way of the World Trade Organization (WTO), the International Monetary Fund (IMF), supernational currency consortia, free trade agreements and an increasing percentage of corporate wealth accounted for by international conglomerate ownership. When countries get in the way of globalization for reasons righteous or wicked, the powerful countries engineer military rebellion (as in Venezuela) or all-out wars (as in Iraq) to put an end to the insolence. This global power system propels itself, as power systems always have, by subordinating the most vulnerable. In the years since the onset of the financial crisis, this has meant austerity, union busting and the gutting of the commons for private ownership, and it has meant this worldwide.

It is the perfidy and callousness of this power structure, which is much bigger and much more important than any government, feeding 2011's "Protester." The struggles in 2011 have all been struggles for dignity and freedom from the global corporate tyranny - struggles for democracy (people power) against plutocracy (wealth power).

There is a direct line from the corruption of banking elites in Tunisia to the privation in the country's rural areas to Mohammed Bouazizi's desperation that led to January's first revolution. Egypt's high unemployment, deep-going political corruption and crushing wealth inequality brought clerics and working people into the streets alongside the activist student factions. Impunity for the callous financial class as a backdrop for rampant police brutality and cuts in social services fostered the rage in August's Tottenham rioters, according to the rioters themselves. The pattern holds in Spain, Greece, Chile, Russia, Israel, Syria, India and, of course, the United States: everywhere "The Protester" struck in 2011 was a place where the political elites, working on behalf of the international ownership class, had rigged the game, which resulted in quite a lot of unpleasantness for normal citizens, especially the poor and the young.

In the pages of Time Magazine, there is an analysis of "The Protester" as a global phenomenon, but little that acknowledges that the power structure at which "The Protester" hurls chants, and sometimes stones, is itself global. "Globalization" in the piece is raised only by way of giving it credit for the global reach of the Internet, which has been a critical factor in uniting the movement's different national factions.

But the democratic character of the Internet is a bug, so to speak, of globalization, not a feature. In fact, it flies in the face of globalization's goal, which is the endless accumulation of wealth by the already wealthy and the requisite security to accomplish it. For that reason, the international telecommunications giants are trying to control the Internet so that it can be used for commerce but not the sort of free-information anarchism for which it is currently so beloved. The Internet, just like people everywhere, is vulnerable to the wrath of global capital when it poses a threat.

The greatest crisis affecting everyone, everywhere is the climate's accelerating progress toward making Earth inhospitable to human life. That is a problem that can only be solved on a global scale, and if the plutocracy making the decisions shared the concerns of the democracy who are suffering first, the Durban climate talks would have emerged with a strong global commitment, rather than acrimony and desperation.

"The Protester" is focused on something bigger than Time Magazine's cover, bigger even than governments. "The Protester" in 2011 is focused on saving the world by turning it over to the people who live here. The day the Time article was released, Forbes reported that "Six Waltons Have More Wealth than the Bottom 30% of Americans" and The Guardian revealed that "America's CEOs enjoyed pay hikes of up to 40% last year - with one chief executive earning $145m." The next day, Vladimir Putin ridiculed the Russian protesters.

At this rate, Time might have to give 2012 to "The Revolutionary."

There They Go Again: Rebublicans Sabotaging The Economy

By Isaiah J Poole, cross-posted from Campaign for America's Future

House Speaker Boehner

House Republicans are expected later today to engage in yet another one of their acts of economic sabotage. After a rare bipartisan agreement in the Senate to temporarily extend a worker payroll tax break and extended unemployment benefits for two months, getting both initiatives past a December 31 deadline and giving Congress more time to work out the details of a full-year extension, House Republicans aim to wreck it in their Tea-Party drunken rage.

Never mind that their refusal to accept "yes" for an answer even to some of their more egregiously out-of-line demands—such as their demand for expedited consideration of the Keystone XL oil pipeline that President Obama had earlier threatened to veto if it appeared in the payroll tax cut extension—will take billions of dollars out of workers' take-home pay, thus slowing a fragile economy and killing jobs.

"There they go again. The country needs these measures to infuse cash into the economy and the Republicans torpedo them for political reasons,” said Roger Hickey, co-director of Campaign for America’s Future, in a news statement today. “House Republicans claim they support extending payroll tax cuts and unemployment insurance, but every time Congress gets close, they add on onerous conditions or renege on previous deals. We call that sabotage.”

“Even if you passed the payroll tax cuts and unemployment insurance, the government would still be doing less to boost the economy than they did last year, which is folly with 23 million Americans unemployed,” said Robert Borosage, co-director of the Campaign for America’s Future. “The Republican House Majority has blocked every proposed bill that would actually create jobs. They have forced the U.S. into austerity. It’s either pure blind stupidity or craven treachery designed for a political purpose.”

Borosage said, “If we don’t assume the Republicans are dim-witted, the only conclusion is that they are happy to go contribute to mass unemployment that they can blame the President for.”


Whatever the reason, Senate Majority Leader Harry Reid is not bending over and taking the House Republican shenanigans. David Dayen at Firedoglake offers a good summary of the state of play between the two houses of Congress and cites a statement from Reid:

In a statement, Senate Majority Leader Harry Reid said that “If Republicans vote down the bipartisan compromise negotiated by Republican and Democratic leaders, and passed by 89 senators including 39 Republicans, their intransigence will mean that in ten days, 160 million middle class Americans will see a tax increase, over two million Americans will begin losing their unemployment benefits, and millions of senior citizens on Medicare could find it harder to receive treatment from physicians.”

The very fact that Democrats are having a serious discussion about how to "pay for" a tax break intended to stimulate the Main Street economy without a surtax on millionaires is already an exceptional, and exceptionally bad, concession, since "paying for" an economic stimulus in this way invariably involves taking from working-class and middle-class people with one hand and giving back with the other—at best, a wash, not a real increase in economic growth.

We need the government to spend more in the short term to stimulate demand. The Progressive Caucus's latest jobs and economic recovery bill is one example of the set of policies that we should be debating. Instead, Congress is arguing over whether an economy that has had its head bashed in and is bleeding profusely should get a pain-killer.

Dean Baker, whose latest column in The Guardian unsparingly details the political failures that brought us to this point, reiterates the point we've made repeatedly for years about the king of economic policy we need, as opposed to the kind of economic policies being proffered by both political parties. "People had to understand that we are poor because the country as a whole is spending too little to keep the workforce fully employed, not that the government is spending too much."

So far, more than 13,000 people have signed our petition calling for House Speaker John Boehner and Senate Republican Leader Mitch McConnell to "to quit trying to sabotage the economy, and support the extension of the temporary payroll tax cut and long-term unemployment insurance without spending cuts that would negate the stimulative effects. This is the bare minimum Congress can do to keep the economy from sinking into a double-dip recession."

We need more signatures so Republicans get an unmistakeable message: Enough. Stop sabotaging the economy.

Here's what else you can do (courtesy of the AFL-CIO): Dial 1-888-245-3381 and tell the person who answers the phone: “Please pass the Senate’s bill to extend unemployment aid and middle-class tax cuts immediately.” You can also call House Speaker John Boehner at 202-225-0600 and tell him, “You and your Tea Party supporters can’t keep hurting the American people just so you can get what you want. Stop this temper tantrum and pass the Senate’s bipartisan bill to extend unemployment aid and middle-class tax cuts now.”

Super Committee Headlines You'll Never See

By Richard (RJ) Eskow, cross-posted from Campaign for America's Future

Discussion of the "Super Committee" debacle continues to misguide and misinform the public in an all-too-familiar way. Once again the consensus in the media and among political leaders reflects the misperceptions of an insular Washington culture, rather than the economic or political realities of most Americans.

The Republican and Democratic co-chairs said today that "we end this process united in our belief that the nation's fiscal crisis must be addressed." That's how this exercise in misplaced priorities ends: With a "bipartisan" statement about the urgency of our "fiscal crisis" - deficits - rather than our massive and much more immediate economic crisis of jobs and stagnating wages. And with that, the media onslaught begins. Now we'll see hundreds of new headlines screaming that the Committee "failed."

What we won't see are headlines explaining what really happened: That this failure was inevitable; that it reflects the wishes of most people, Republicans as well as Democrats; that Occupy Wall Street played a large part in the outcome; that Republicans never intended to compromise and Democrats shot themselves in the foot; that this "failure" will be good for most businesses - and for the rest of us too; or that a misguided and right-leaning consensus turned leaders of both parties into cheerleaders for ill-timed budget cuts even as the economy continued to burn down all around them.

Here are seven more accurate - and more eye-catching - headlines you won't see in your major media outlets.

OCCUPY MOVEMENT WINS MAJOR VICTORY
Unpopular 'Supercommittee' Deal Stymied by Popular Opinion
 
Democrats tried. They really tried. They were ready to accept deal points that the polls - and their hearts - should have forced them to refuse: Benefit cuts to Social Security and Medicare. A permanent extension of the Bush tax cuts for the wealthy. A deal that was heavily weighted toward spending cuts, rather than revenues, even during an economic crisis.

They might very well have done it, too, except for one thing: The Occupy movement has changed the subject from the Washington-driven theme of deficits to the economic hardships faced by most people in this country. Sure, the Tea Party is getting credit (yes, I said "credit") for killing a disastrous deal, and it's true that it played an important role.

But so did the Occupy movement. There was talk of occupying Congress, and even occupying the "Super" meeting's meeting space in the now-infamous Room 200. A march and rally is scheduled for tomorrow, and an Occupy group walking from Wall Street to Washington is scheduled to arrive the day after tomorrow.

Democrats who signed on to this deal were going to feel the wrath of the 99%, and there's no way they couldn't have known it. People who have spent the last two years wishing that they had a Tea Party of their own, one that would pressure Dems the way the Tea Party pressures Republicans, can now rest easy. It's here. And it's changing things.

The moral for Democrats? Embrace jobs and growth, not cuts and austerity. You'll thank yourself next November. Some Republicans will probably thank you, too ...


GOP VOTERS HOLD "EXTREME" VIEW OF CUTS - EXTREMELY "LIBERAL," THAT IS
"Left" Anti-Supercommittee Views Supported by Almost 3 Out of 4 Republicans
 
We're already hearing that the unwillingness of some Democrats to sign on to cuts in Social Security and Medicare - the few, the proud, the real Dems - is a sign of "ideological rigidity on the extreme left." Pundits are referring to Senators like Bernie Sanders and Representatives like the members of the House Progressive and African-American Caucuses.

Extreme left? Their position is supported by three out of four voters - Republican voters, that is. A new poll confirms what previous polls have shown: Once voters have these proposed deals explained to them, they hate them.

Nearly three out of voters are against changing Social Security's cost of living adjustment (COLA), as the White House and some Democratic supercommittee members were prepared to do. That includes 70% of Republicans and 78% percent of seniors, who turn out to vote in larger numbers than other age groups.

The next time somebody says these Democrats were being too ideologically rigid, ask them what's wrong with representing the party's rank and file. Especially when that includes other party's rank and file too.

GOP 'COMPROMISE' HOAX SPREAD BY PRESS, PUNDITS
Supposed "compromise" was actually more extreme than ever

It seems almost unkind to point to this piece by Ruth Marcus, who said last week that she was "uncharacteristically optimistic" that the Committee actually would reach a deal. Then we're reminded that she writes for the Washington Post, newspaper for the Federal government's "company town."

Why was Ms. Marcus optimistic? Because, as her headline reads, "Republicans were (making) room for tax increases after all." Why? Because far-right Sen. Pat Toomey and far-right Rep. Jeb Hensaerling were moving away from their "no new taxes" rhetoric and offering, in her words, "a deal that included — gasp! — a net increase in tax revenue from the current level."

She added: "I don’t mean this in a disrespectful way, but pigs are flying here, folks."

Flying? No. Squealing? I wouldn't say that - too disrespectful. But why the enthusiasm from Ms. Marcus? Because, she says, "he once-sacred principle of not raising taxes — any taxes, ever — has been breached."

But it hadn't been. As she herself is fair enough to point out, Republicans were still offering a tax cut, given that Bush's cuts are due to expire. And the deal they offered wasn't a cut for most Americans - only for the wealthiest among us. They were actually proposing another slashing of the high-end rate, which is scheduled to go back to 39+%, down to 28%. In return they were offering "revenues" - by eliminating tax deductions the middle class depends on, especially in these difficult time.

Ms. Marcus and dozens of other commentators have successfully pushed the idea that "both sides were willing to compromise," but were styming by "extremists" in their own party. Not true. Extremists run the Republican Party. And as for the Democrats ...

DEMS DEMAND TO GO ON RECORD AS EAGER TO CUT SOCIAL SECURITY, MEDICARE
Party Leaders Deny Defending Popular Programs, Insist They Were Prepared to Gut Them 
 
There's a great narrative for the Democrats here, if they're willing to take it: We said 'no' to cutting your benefits to protect rich people. Instead they're insisting on making it clear to the American people that they did no such thing. White House Press Secretary Jay Carney said that it was Republican intransigence on taxes, not Democratic willingness to bend on these programs, that scuttled the deal. Combined with Carney's past statements supporting that unpopular COLA cut, that means the Administration is still on record as saying it wasn't prepared to defend these benefit from cuts that the public despises. Instead, Carney bemoaned the GOP's refusal to sign on to a 'grand bargain' that would have done exactly that.

The Democratic supercommittee members were even more flatfooted. "If we fail to do this it will define 2012 going forward," Sen. John Kerry said last week. That's insisting on defining a victory - "We defended your benefits from the party of the rich!" - as failure.

If Dems had any illusions that Republicans wouldn't use this against them, they should already have been dispelled. "“It is another example of failed leadership," said Mitt Romney. "(Obama) has not taken personal responsibility to get the super committee to find ways to balance the budget and cut spending.”

Which gets us to our next headline.

WASHINGTON MOURNS MISSED CHANCE TO ENSURE A 'LOST DECADE'
Leaders lament lost opportunity to create a decade of economic misery 
 
From CNBC: "The austerity measures being rolled out in countries across Europe will have a devastating effect on the living standards of its population, an economist told CNBC Friday.

"These reforms are going to be devastatingly impacting (sic) on the population in these countries. We are looking at a decade of lost living standards across most of Europe."


The economist, James Shugg from Wespace, added that austerity measure, while "part of the solution, will "deepen the downturn." Here's the paradox: They're only "part of the solution" because no one in Washington seems willing to address our real economic problems in a genuine way.

BUSINESS LEADERS CELEBRATE SUPERCOMMITTEE FAILURE
At least they won't make things worse, executives say. 
 
We keep hearing that "business" wants these cuts, but that's only true for the mega-corporations and billionaires that dominate the Washington conversation. What do the other businesses say, the ones that hire people and help to grow the economy?

As Business For Shared Prosperity reports in a new pess release, some of their leaders are celebrating the "defeat."

“Demand drives business, not tax cuts,” said Lew Prince, said the managing partner of a St. Louis music store. “I hire more workers if I think I’ll do more business." Austerity cuts means a stagnating economy. That means people don't buy as much as they once did at Lew Prince's store. And that means fewer jobs.

Frank Knapp, who is the President and CEO of the South Carolina Small Business Chamber of Commerce and Vice Chairman of the American Sustainable Business Council, was even more blunt: “I’m sick of people who wrecked the economy and their defenders in Congress blaming others for killing jobs. The high-end Bush tax cuts are a big part of the problem – not the solution. We need revenue for real job creation and economic renewal, not more job-killing budget cuts, job-killing corporate tax dodging and job-killing millionaires and billionaires not paying their fair share of taxes."

Which gets us to our last headline:

IN SURPRISE DEVELOPMENT, TERRIBLE IDEA NOT WORKING OUT WELL
Pundits, Washington leaders today expressed surprise and dismay at failure of unpopular committee to agree on widely-hated cuts 
 
That's it. No body, just the headline. Some stories just write themselves.

Stopping The Austerity Train Wreck

Robert Reich explains on his website with his usual clarity how "Washington is on another planet" and that whether or not the Super Committee reaches an agreement or not, "Washington is on the road to making budget cuts that will slow the economy, increase unemployment, and impose additional hardship on millions of Americans."

 
 He lists four "super principles" that ought to guide the Super Committee:

FIRST: no cuts before jobs are back – until unemployment is down to 5 percent. Until then, the economy needs a boost, not a cut. Consumers – whose spending is 70 percent of the economy – don’t have the money to boost the economy on their own. Their pay is dropping and they’re losing jobs.

SECOND: Make the boost big enough. 14 million Americans are out of work, and 10 million are working part time who need full-time jobs. The President’s proposed jobs program is a start but it’s tiny relative to what needs to be done. It would create fewer than 2 million jobs. We need a big jobs program – rebuilding America’s crumbling infrastructure, and including a WPA and Civilian Conservation Corps.

THIRD: To pay for this, raise taxes on the super-rich. It’s only fair. Never before has so much income and wealth been concentrated at the very top, and taxes on the top so low. Go back to the 70 percent marginal tax we had before 1980. And include more tax brackets at the top. It doesn’t make sense that any income over $375,000 is taxed at the same 35 percent, even if it’s a billion dollars. And tax all sources of income at the same rate, including capital gains.

FOURTH: Cut the budget where the real bloat is. Military spending and corporate welfare. End weapons systems that don’t work and stop wars we shouldn’t be fighting to begin with, and we save over $300 billion a year. Cut corporate welfare – subsidies and special tax breaks going to big agribusiness, big oil, big pharma, and big insurance – and we save another $100 billion. 

 Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Aftershock.

Occupy At Two Months: The Evolution Will Not Be Televised

Today, on the two month anniversary of the Occupy Wall Street movement, a  massive day of direct action is planned.  Here's the link for national and international events.

Dave Johnson at Campaign for America's Future writes that the "National Day Of Action looks like it will be really big. People will be out doing things all over the country. There will be all kinds of events that say, "We are the 99%!" My  favorite is people will be gathering in front of various decaying bridges, to demonstrate that our #1 need is jobs and our #1 place to put people to work is rebuilding our decaying infrastructure."

The big day comes on the  heels of polling which suggests support for the Occupy movement is waning.  As David Atkins observes this is hardly surprising given the "constant negative stories in the press about supposed poor behavior" and that the "focus of the movement has become more about the process of occupying ground and conflicts with police, than about the original reasons for the protest in the first place."  He also points out that "advocacy for social justice has never really been publicly popular at the time."

Pollster Tom Jensen explains that the bad poll numbers don't "reflect Americans being unconcerned with wealth inequality"and that "what the downturn in Occupy Wall Street's image suggests is that voters are seeing the movement as more about the 'Occupy' than the 'Wall Street.'  The controversy over the protests is starting to drown out the actual message."

Todd Gitlin at openDemocracy points out that "tactical changes" were already afoot before the clearing of Zucotti Park; that Occupy Wall Street "was already evolving and the movement was, and remains, a lot bigger than the Zuccotti Park’s half-acre."  Spin-off groups "were already organizing direct actions elsewhere around the city, such as demonstrations at bank branches, foreclosure hearings and subway stations."  And, as noted above, massive and varied actions around the country and internationally are planned for today.

Nevertheless, Gitlin warns of traps that have opened up for the movement, which are particularly relevant in light of the recent polling:

The first would be to become preoccupied with police brutality . . . The emotions are understandable, spiky, immediate and adrenaline-infused. But while of course deploring attacks on their civil liberties (whatever happened to “the right of the people peaceably to assemble”?), the movement would be well-advised to keep its eyes on the prize. Let the ACLU and liberal politicians defend their (and everyone else’s) legal rights; it’s their business, and bless them for it. The OWS movement has to remain visible as the voice of “the 99%.”

Secondly, the occupiers must understand that the odds of violent, vengeful outbursts at the edges of the movement have now gone up, even as the overwhelming majority of the movement’s activists and supporters adhere rigorously to nonviolence . . . So the movement will need to work out contingency plans for minimizing the danger of violent hijack.

As Hunter says at Daily Kos, "We are at a necessary evolution point in the Occupy movement."  First because of the "hard truth that cities around the nation simply cannot tolerate camping as a form of free speech, thus necessitating a response to "putting tents up" that is increasingly relying on tear gas, riot gear, and mass arrests."  And second, the government, Wall Street, and the media still aren't listening:

Most press coverage revolves around which cities beat the holy hell out of which protestors on any given day or which senior citizen posed such a damn threat to the riot-gear-laden police that they needed to be pepper sprayed, but the underlying messages of income inequality, corporate corruption and a captured government are, unsurprisingly, still being stonewalled.

So, happy two-month anniversary.  Here is hoping for many more, and for a big day of non-violence in which the overarching message can be heard over the din.  As the sign says:  Resist austerity, Reclaim the economy, Recreate our democracy.

The Super Committee Must Fail

Donkey Hotey

Robert Borosage has long been a leading voice for progressive politics in the United States. He is the founder and president of the Institute for America’s Future and co-director of its sister organization, the Campaign for America’s Future, vital organizations which develop policies, message and issue campaigns to help forge an enduring majority for progressive change.  The following is prepared testimony from Borosage delivered today to the Congressional Progressive Caucus's Hearing on Jobs, cross-posted from Campaign for America's Future.

I thank the Congressional Progressive Caucus for holding this hearing. I am honored by the invitation to participate. I want to the salute the CPC, and its co-chairs Rep. Keith Ellison and Rep. Raul Grijalva, for being a voice of reason in a Congress and a Capitol that has lost its way. Your leadership – from the People’s Budget, to this summer remarkable Jobs Tour, to the “Rebuild the American Dream” Jobs Framework that you have championed – has provided Americans with a clear way out of the mess that we are in. And now, as we head towards what is a foolish debate about the potential recommendations of the Super Committee, that misbegotten offspring of the calamitous debt ceiling deal this summer, your leadership and your voice are more important than ever.

Today, I want to speak candidly about the situation this nation faces. Tomorrow, tens of thousands of Americans across this country will demonstrate to demand jobs, not cuts, from the Congress. They demand action on jobs, and opposition to cuts in Social Security, Medicare, Medicaid and services vital to Americans. These demonstrators represent the 99%. As poll after poll has shown, they give voice to the priorities of the vast majorities of Americans. Authorities can remove Occupy Wall Street from Liberty Park, but they cannot silence an idea whose time has come. And this Congress should take heed.

Let me lay out the case clearly and make three points. 1. For this nation to succeed, the Super Committee must fail. 2. It is time to put people to work. 3. Shared Sacrifice is for suckers.


1. The Super Committee Must Fail

If a drunken bus driver were careening down the wrong road that leads directly off a steep cliff, we would want him to fail to get where he is going. That is exactly the case with the Super Committee. They are headed down the wrong road and it will be ruinous if they succeed in getting where they are going.

This is a nation with 26 million people in need of full-time work. Wages are not keeping up with prices. Poverty, now at record levels, is spreading. One in five homes with a mortgage is underwater. Companies are sitting on trillions in profits waiting for customers. Over the past eleven years, we have added 30 million more people and lost 1.8 million private sector jobs.

And next year, an economy that is barely growing will be hit with severe shocks. The boost provided by recovery act spending will come to an end. If unemployment insurance and the payroll tax cut are also not renewed, JPMorgan Chase analysts project that will cut growth by 1.5 to 2%. More and more mortgages in arrears will face foreclosure, with ruinous effect on their neighbors. Even if the Euro somehow survives, Europe is headed back into recession, with knock-off effects on our exposed banks and investment houses and on export markets.

We should be having a fierce argument about how to put people to work and get this economy going. Republicans should be demanding tax cuts, Democrats public investment and jobs programs. Instead the Super Committee is peddling austerity, pushing Republicans to accept tax hikes (or at least pretend to accept them) and Democrats to embrace cuts in Social Security and Medicare. This is grand folly.

The best deficit reduction plan is to put people back to work. In fact, America does not have a short-term debt problem. If we have a recovery, then our deficits will come down to manageable levels by the end of the decade. If we don’t have a recovery, then austerity will simply make things worse – forcing more workers onto food stamps and unemployment insurance, and lowering revenues.

We see the effects of austerity in Europe. The European Commission now predicts that Europe’s economy will “stagnate well into 2012” and threatens a “deep and prolonged recession.” In Greece, severe budget cuts have combined with economic recession to constrict GDP by 5.5% this year, with unemployment soaring. In Portugal, austerity cuts led the government to project the economy will shrink there by 5%. And, as Sprach Analyst and other global economic firms note, “the slower the growth, the harder the European debt crisis will be to resolve. Government austerity is actually making matters worse.”

We need a sizable, sustained and serious jobs program now. And we cannot turn to austerity, to getting our books in order, until we put people back to work. If the Super Committee were to be useful, it would report out – with its expedited voting powers – a bold and sustained jobs proposal, combining increases in spending – on infrastructure, on direct public jobs programs, on aid to states and localities, on mortgage relief for homeowners – with cuts in taxes to enlist Republicans. It would then make the trigger for any turn to austerity not an arbitrary date, but when Americans are going back to work, and unemployment is down to 4 or 5%.

Instead what we have is Washington’s version of an old Steve Martin routine. “I can tell you,” he used to say, “how to make a million dollars and not pay taxes. First, assume a million dollars, then don’t pay taxes.” The Super Committee says it can tell us how to recover and reduce deficits without paying much in taxes. First, assume a recovery.

But we can’t assume a recovery that is not taking place. First, stop going down a road that leads over a cliff. And start putting people to work.

2. Put People To Work

We know how to put people to work in a recession. The CPC “Rebuild the American Dream” Jobs Framework details the basic elements. The People’s Budget shows that the country can afford to do it – indeed can’t afford not to do it. Let me focus on a couple of elements of this agenda.

First, it is bizarre that those who claim we should let markets rule then choose to ignore what markets are saying. We will never have a better opportunity to rebuild America than we have right now. The need to renovate America’s decrepit and outmoded infrastructure is apparent. It is now dangerous to our lives and costly to our economy. Across the country, the construction industry is idle, with millions of skilled and unskilled workers ready to work. Work to be done and people to do it. And at this moment, investors across the world are, in essence, paying the US to allow them to store their money in our bonds. They are paying us to borrow money from them. Anyone with any business sense would jump at this alternative. We should be borrowing money, essentially for free, in large amounts to rebuild this country and put people to work.

Second, youth unemployment in this country for those aged 16-19 is at the same level it was in Egypt when the Arab Spring erupted. For the first time in half century, a majority of young people from 16-24 is not working. We have a generation of veterans returning from wars, students graduating from high school that can’t find jobs. This crushes hopes and destroys self-confidence. We’re witnessing 18 suicide attempts among veterans a day. No nation can afford to write off a generation. We should make government the employer of last resort for every person under 25. Create urban and green corps; subsidize small businesses and non-profits to put people to work. Let’s have this debate across the country.

Third, the other elements of the CPC Jobs Framework – a manufacturing strategy based on making it America, transforming our trade and industrial policies, a commitment to taking a lead in the green industrial revolution that is sweeping the world, an investment agenda in education and training to insure that our people are the best trained in the world – are vital to building a new foundation for growth and shared prosperity. The stark reality is that we can’t go back to the old economy and should not want to. That economy was not working for most Americans. The top 1% captured all of the rewards of growth over the last decade, while the typical household lost ground. It was built on bubbles and debt and unsustainable trade imbalances. I salute the CPC for demanding a new strategy for growth, not simply a short-term stimulus that cannot work
.
3. Shared Sacrifice is for Suckers

Once the economy recovers and people go back to work, it will then be time to face our long-term debt challenge, and get our accounts in order. Here too, however, the Super Committee is headed down the wrong road.

Republicans have argued that we should balance our budget with spending cuts only – calling for dismantling Medicare, cutting Medicaid and Social Security, and exacting deep cuts in everything from education to child nutrition. Democrats have called for “shared sacrifice,” offering to trade cuts in Medicare and Social Security for tax increases on the rich.

But, when the rewards of growth are not shared, shared sacrifice is for suckers. The reality is that we face a huge mess because Wall Street went on a wilding that blew up the economy. Most Americans weren’t even invited to the party. Now under the banner of shared sacrifice, they are being asked to clean up the mess. Bull. Send the bill to those who had the party. And in fact, seniors and savers and homeowners are already paying a steep price for Wall Street’s excesses, as the policies of the Treasury Department and the Federal Reserve -- focusing on propping up otherwise insolvent banks – has resulted in seniors getting low returns on their savings, homeowners getting no relief on their mortgages, and taxpayers paying the price of the economic ruin left by the banks.

To then suggest that the most vulnerable in the society “share in the sacrifice” or pay more to clean up the mess is an insult.

Worse, it gets our long-term debt problem wrong. We need to hike taxes on the wealthy and on Wall Street to help pay for the mess they created and to provide the funds, once people are back to work, to continue investing in America.

But our long-term debt problem is not a spending problem or a tax problem. It is the product of a broken health care system. We pay nearly twice per capita what the rest of the industrial world pays on health care, with worse results. If we paid simply the average per capita of the industrial world, we would project surpluses in our long-term projections.

Cutting Medicare -- raising the eligibility age as some Democrats have proposed, dismantling it and turning into a voucher as Republicans have suggested -- does nothing for the soaring costs of our health care system. It simply pushes more of those costs on to those least able to afford them -- the elderly, the poor, the disabled.

The cure to our long-term budget problem is to get health care costs under control. That requires taking on the drug companies, the insurance companies and the private hospital complexes that drive prices. Obama’s health care plan is a first step down that road. A public option and negotiating bulk savings on prescription drugs would save even more. The Veteran’s Administration has modeled other savings, in electronic records and more. Medicare for all is where we will eventually end up.

But whatever the solution, no one should be confused about the problem. It isn’t out of control spending. It isn’t greedy seniors, generational warfare, or an “entitlements crisis.” It is a broken health care system, a service that every other industrial country has handled better than we have. Don’t ask the vulnerable to pay more of the out of control costs. Get the costs under control.

You can’t get the right answer if you aren’t asking the right question. At this point, the Super Committee is asking all the wrong questions, and coming up with all the wrong answers. I urge the Progressive Caucus members to do whatever they can to insure that it fails in its effort to drive this economy back over a cliff.

Super Collusion: Will Obama and The Democrats Betray The Middle Class, Seniors And The Poor?

By Richard (RJ) Eskow, cross-posted from Campaign for America's Future

Two new reports suggest that the President and Congressional Democrats are about to betray everything Democrats once stood for. Under pressure from Barack Obama, Democrats on the "Super Committee" have sketched out an appalling "compromise" proposal that would almost certainly doom both their 2012 electoral chances and his own.

They'd have it coming. Their draft plan literally takes crutches away from poor people to protect tax breaks for the wealthy.

Unfortunately, middle class and impoverished Americans would suffer much more than they would. Career politicians can always look forward to comfortable sinecures from the wealthy interests who will benefit from their proposal. But the rest of us would once again be punished for the excesses of the rich, then left to the untender mercies of our new Republican leaders.

That, and not the fate of a President or a party, would be the real tragedy.

Pain Threshold

The President's actively pressuring Super Committee members from both parties to come up with a budget-slashing deal, according to a report in today's Washington Post. In addition, Obama is also urging them not to cancel the automatic $1.2 trillion in cuts that would be triggered under current law if they fail to make an agreement.

Another story, from the Huffington Post's Sam Stein, gave details on the Democrats' latest proposed "compromise." These two stories paint the picture of a President and a party who are willing to keep taxes low for the wealthy, and who would pay for it by proposing cuts that punish seniors, doctors and the poor.

Why? So they can say they "successfully governed" with extremist Republicans? To please international markets that, in reality, couldn't care less? So the President can campaign as "above left and right," as if differences in principle are a bad thing? Because they've been spiritually suffocated by the cultural norms of Washington's insular culture?

There are more questions than answers. Here's one more: With Democrats like this, who needs Republicans?


Low rates for the wealthy

Stein reports that the Democratic proposal would keep tax rates for the wealthiest Americans at the historically low Bush-cut rate of 35 percent to please the GOP. (That rate was 91 percent under Eisenhower, 50 percent at the start of Reagan's term, and 39 percent under Clinton.) The very wealthiest among us would continue to savor these unusually low tax rates to sweeten the fruits of ever-increasing wealth inequity.

The Dems would also accept the principle of "corporate tax reform to enhance competitiveness," which sounds a lot like a bid for lower tax rates for corporations. That would be offset by reductions in overly indulgent tax breaks, such as those that apply to corporate jets. But corporations would still retain expensive accountants and even more expensive lobbyists. I'll bet you a big chunk of your future Medicare benefits how that would turn out.

Oh, wait. These Democrats are already placing that bet. We'll get to that shortly.

Those are the breaks

The party's internal discussion document includes "triggers" that would take effect if Congress can't cut these deductions itself. One of those triggers is described as "a Feldstein-type limitation on itemized deductions for higher income taxpayers." They're referring to Martin S. Feldstein, the former Reagan advisor who wants to eliminate tax breaks for solar panels or electric cars. More significantly, Feldstein also wants to cap tax deductions at 2 percent of income -- for everyone.

Feldstein's op-ed in the New York Times explained that " Taxpayers with incomes of $25,000 to $50,000 would pay about $1,000 more in taxes; those with incomes of more than $500,000 might pay $40,000 more." In other words, the poor must pay part of the bill for the excesses of the rich.

To be sure, the Democratic proposal says it would target "higher income taxpayers," which is not Feldstein's plan. But who'll have better lobbyists when those tax exemptions are being defined -- the rich and the corporations, or the middle class? And we learned what conservatives mean by "higher income" when the Concord Coalition suggested that anyone earning over $20,000 per year should be targeted for Social Security means testing when they retire.

That's the kind of person the Dems would be dealing with in their detailed tax negotiations.
Here's more thing these Democrats should understand and explain: Tax breaks for items like solar power or electric cars are a good thing. They serve the public interest, which is what public policy is supposed to do. They reduce our dependence on foreign oil, protect our environment, and improve public health. That saves us money, too.

The unkindest cuts of all

The Democratic proposal also includes cuts of $250 billion to providers under Medicare. Unless they're very well designed (they won't be), that will mean problems with access to doctors and adequacy of care.

There's also a cut of $100 billion in benefits for seniors. That would affect every single person in the United States who reaches retirement age, along with those who become disabled.
Depending on how those "Feldstein tax increases" were structured, many retired Americans could see their Medicare benefits reduced -- and lose a tax deduction for paying those costs out of their own pockets.

There would also be cuts to Medicaid's prevention and public health trust fund, one of the most "Democratic" aspects of last year's health care bill. So the proposal would subvert one of the provisions in the law they just passed. This cut doesn't just target the vulnerable. It's also economically foolish, since it cuts programs that can prevent costlier illnesses later on. And the Democrats would also cut $5 billion for Medicaid's "DME," which presumably means "durable medical equipment" like crutches and wheelchairs.

It looks like Democrats will literally propose taking wheelchairs away from poor people so we can keep tax rates low for the wealthy.

Tone Deaf

The White House issued a stunningly inappropriate statement about the Committee, saying the automatic "trigger" cuts the President's defending were "agreed to by both parties to ensure there was a meaningful enforcement mechanism to force a result from the Committee." The statement went on to say:

"Congress must not shirk its responsibilities. The American people deserve to have their leaders come together and make the tough choices necessary to live within our means, just as American families do every day in these tough economic times."

That's not merely an economically silly statement, although it's certainly that. The analogy between the U.S. budget and that of a family is fatuous (how many families print their own currency, which is the world's standard?), misleading (even families will invest in their future sometimes), and ruthless (few families would argue that a balanced budget is more important than a wheelchair or crutches for Grandma).

This statement revives the troubling question of whether this White House and this President have lost their moral compass along with their understanding of economics.

It's true that President and Congress should not "shirk their responsibilities" -- to provide jobs for the unemployed and reduce the swelling ranks of the impoverished. It's devastating that the President chose to apply those words to a lopsided, premature, and misguided exercise in austerity economics instead.

The Bottom Line

There comes a time when ethical people have to take a stand, and this is one of them. Democrats must reject the premise behind these negotiations. If they don't it raises serious questions about their party's values, future and social worth.

Today's deficits were caused by wild and reckless tax cuts for the wealthiest among us, along with the cost of two unnecessary wars and the consequences of bank greed and recklessness. It's a terrible mistake to ask the Americans who were wounded most by deficit-causing behavior to carry so much of the cost of fixing it. And to propose cuts to Medicare and Medicaid simply to preserve low tax rates for the wealthy is nothing less than a moral obscenity.

In these dark times, here are the President's and Congress's real and unshirkable responsibilities: To help 25 million un- or under-employed Americans get back on their feet. To stop Wall Street looters from making off with our nation's riches. To restore tax fairness and economic justice. To invest in our crumbling infrastructure. To create economic growth that will fix deficits in the long term. To ensure retirement security for all Americans. To ensure genuine access to health care for all. And to stem the growing tide of poverty.

Maybe these professional politicians are constitutionally hardwired to compromise and deal, and are therefore incapable of recognizing when doing so is to reinforce great wrongs. But if they can't see it, we'll have to show them -- with phone calls, emails and a very clear message about the consequences they'll face next November if they go through with this plan.

This proposal, along with the whole Super Committee process, is a dying gasp from the failed "bipartisan" economic consensus that brought us deregulation, the financial crisis, rampant banker criminality, and inequitable distribution of wealth. It must be discarded with all the other refuse of that cynical, tragical, failed experiment.

Politicians who don't understand that may wind up being discarded, too.