Tag: Economy

Why Representative Paul Ryan (R-WI) decided to release his latest budget proposal on April 1 will most likely not be answered except with some guffaws. Calling it the Path to Prosperity is another joke, or prank if it even gets to the House floor for a vote. It’s more like the Road to Ruin except for the 1%. His proposal cuts government spending over the next 10 years to the tune of $5.1 trillion dollars mostly on the backs of the middle class but mostly the poor. It will increase military spending:

In his plan, military spending through 2024 would actually rise by $483 billion over the spending caps established in the 2011 Budget Control Act “consistent with America’s military goals and strategies,” while nondefense spending at Congress’s annual discretion would be cut by $791 billion below those strict limits.

In all, Mr. Ryan says, spending would be cut by $5.1 trillion over the next decade. More than $2 trillion of that would come from repealing Mr. Obama’s health care initiative, the Affordable Care Act, a political move that has become much more difficult with the closing of the first enrollment period. As many as 10 million Americans have gotten health insurance through the law, either through private policies purchased on insurance exchanges, through expanded Medicaid or private policies purchased through brokers but subsidized by the law.

As with past budget proposals, Mr. Ryan seeks to eliminate the Affordable Care Act’s Medicaid expansion, then turn the health care program for the poor into block grants to the states – saving $732 billion over the decade. He would also cap and block-grant food stamps, starting in 2020, cutting that program by $125 billion in five years. The budget relies on imposing new work requirements on food stamp and welfare recipients.

Some of the headlines from The Hill tell most of the story for the rest of Ryan’s fantasies:

Ryan budget sets sights on Dodd-Frank and Ryan budget attacks Obama’s climate agenda.

Talking Points Memo‘s Sahil Kapur shines light on the biggest contradictions that will have politicians twisting to explain on the campaign trail:

The new Republican budget will adopt cuts to Medicare under Obamacare that the party is attacking Democrats for ahead of the 2014 congressional elections.

And it won’t include cuts to Social Security that Republicans bashed President Barack Obama for omitting from his budget proposal just six weeks ago.

The blueprint, to be unveiled Tuesday by House Budget Chair Paul Ryan (R-WI), will shine a light on stark contradictions in the GOP’s stance on these two programs. Slashing the retirement safety net is an overarching goal for wealthy donors and party elites, but their elderly voting base strongly opposes any cuts. While Republicans warn of a looming debt crisis if Medicare and Social Security aren’t scaled back, they’re knocking Democrats for Obamacare’s $700 billion in Medicare payment cuts to hospitals, private insurers and other providers.

A difference between this budget fantasy and Ryan’s other dreams is that it was scored by the Congressional Budget Office before its release. At FDL Action, Jon Walker points out another problem, it won’t achieve what the GOP says it wants, eliminating the deficit and a balanced budget:

The problem is that the CBO has recently downgrade its revenue projections making it harder for Ryan to meet his goal of eliminating the deficit in 10 years. If the deficit was really a top priority for Republicans they could have made the tough decision to raise taxes or put forward even more cuts spending. Instead they decided to basically cheat to get a better CBO score. [..]

This budget is a purely statement of principle by Republicans since it has no chance of becoming law or even being the starting point for a negotiation. In this statement of principle Republicans had to choose between a real plan to balance the budget or their other priorities like tax policy and defense spending. By going this route they made it clear the national debt is at best a second tier concern for them. [..]

Republicans have repeatedly had to the chance to choose between reducing the deficit and keeping taxes low for rich people and once again they proved they will pick rich people every time.

Ryan would like everyone to think he’s serious. The truth is that the is just a very bad running April Fool’s joke.

The Secretary of Defense Chuck Hagel announced that the upcoming Pentagon budget would focus on the 21st century realities of warfare with more emphasis on targeted assassinations and cyberwarfare. It also cuts the strength of the Army to pre-World War Two levels relying more heavily on the National Guard.

   Defense Secretary Chuck Hagel plans to shrink the United States Army to its smallest force since before the World War II buildup and eliminate an entire class of Air Force attack jets in a new spending proposal that officials describe as the first Pentagon budget to aggressively push the military off the war footing adopted after the terror attacks of 2001 [..]

   The new American way of war will be underscored in Mr. Hagel’s budget, which protects money for Special Operations forces and cyberwarfare. And in an indication of the priority given to overseas military presence that does not require a land force, the proposal will – at least for one year – maintain the current number of aircraft carriers at 11.

The Guard and Reserves, which proved capable in their wartime deployments although costly to train to meet the standards of their full-time counterparts, would face smaller reductions. But the Guard would see its arsenal reshaped.

The Guard’s Apache attack helicopters would be transferred to the active-duty Army, which would transfer its Black Hawk helicopters to the Guard. The rationale is that Guard units have less peacetime need for the bristling array of weapons on the Apache and would put the Black Hawk – a workhorse transport helicopter – to use in domestic disaster relief.

The proposed budget would also eliminate the old U-2 spy plane in favor of unmanned drones and eliminate the entire fleet of Air Force A-10 attack aircraft. However, it does keep the allocations for the controversial F-35 warplane, which has been extremely expensive and has run into costly delays, that the Air Force says it doesn’t want.

There will be pain for the troops, too.

The fiscal 2015 budget also calls for slowing the growth of tax-free housing allowances for military personnel and would reduce the $1.4 billion direct subsidy provided to military commissaries, which would most likely make goods purchased at those commissaries more expensive for soldiers.

The budget also proposes an increase in health insurance deductibles and some co-pays for some military retirees and for some family members of active servicemen.

The savings on groceries will reduced, costing a military family as much as $3000 per year, and pay raises will be capped:

Besides paring back grocery savings, the Pentagon would also cap military pay raises at 1% in 2015 and trim housing subsidies for families who don’t live on bases. They will also no longer be reimbursed for rental insurance.

Families are likely to feel the sharpest pain every week when they shop for their grocery. By the end of the third year, the savings will be slashed by about two-thirds, a senior defense official acknowledged on Monday.

Currently, a family of four can save $4,500 a year at commissaries on average, according to the Defense Commissary Agency, which puts savings around 30% compared to retail grocery stores. Under the new proposal, the savings for a similar family would be closer to $1,500 a year or 10% of a grocery bill at other stores.

Despite these cuts and the claims, this hardly an austerity budget still exceeding the budgets of next ten military budgets in the world combined.

A better idea, as suggested by DSWright at FDL News Desk would be “to rethink 800 military bases and a $700 billion annual budget to defend against an enemy that no longer exists.” But the fear mongers will persist regardless:

Despite ‘historic’ cuts, the US will still have 450,000 active-duty soldiers

By Michael Cohen, The Guardian

The Pentagon is able to maintain a bloated and extravagant military force even when the US faces no actual security threats

Rather than a reflection of a changing global security environment, the growing and continued obsolescence of inter-state war and the country’s lack of interest in future military adventures, the cuts announced yesterday by Hagel are an indication of something else altogether: how tenaciously the Pentagon is able to maintain a bloated and extravagant military force even when the US faces no actual security threats.

Indeed, what was missing from yesterday’s headlines was some much needed context. For example, “smallest size since 1940” sounds, on the surface, like quite a step back. Did Neville Chamberlain rise from his grave and become president of the United States? Let’s put aside for a second that the size of the army in 1940 was about 270,000 and the Marine Corps stood at about 30,000 – a far cry from the proposed 180,000 today.

The truth is the military budget is still bloated with wasted tax dollars that could got to rebuilding the US infrastructure that would create jobs increasing economic growth and reducing income disparity.

Flea markets, Free market: not so much a pun as a reality, that informal economies flourish with the inevitable rise and subsequent failure of so-called free-markets, first as deregulated, then as re-regulated as discussed by The Regulation School. Scale is signified here and the expansion of a gloablized economy is not so much the work of invisible or virtual hands (one thread of my research), but the aggregation of so many marginalized sectors of that economy into their own systems of exchange. Bitcoin is but one example on the capital side; bartered labor might be its polar opposite. Alternative and heterodox economies and their institutions have been recent topics of discussion here, so while the implementation and functioning of such economies is paramount, some history to fill some gaps might be useful this week.

What wanton grace, what saucy innocence! What heroic wrestling with aesthetic problems! This nonchalance and originality are worthy of a Heine!

We have deceived the reader. Herr Grün’s literary graces are not an embellishment of the science of true socialism, the science is merely the padding between these outbursts of literary gossip, and forms, so to speak, its “social background”….How right was Heine when he said about his imitators: “I have sown dragon’s teeth and harvested fleas.”(1)

This chapter was published by Marx separately as a review in the monthly publication Das Westphälische Dampfboot in August and September 1847. Before that, in April 1847, Marx had published a “Declaration against Karl Grün”. He stated in it that he intended to publish a review of Grün’s book Die soziale Bewegung in Frankreich und Belgien (see present edition, Vol. 6) in the Westphälische Dampfboot.

For those less familiar with Heine here’s a particularly modern example from 1827 close to the time of the invention of the latent image technology called photography, where the absence and presence of meaning/message of the transmitted information while interdependent are only interoperable by thinking beyond the margins.

The German Censors  —  —  —  —  —

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—  —  —  —  —    idiots    —  —

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My earlier experience in economic history led me to study with a scholar of medieval economies but he also showed me how to look at the variables involved in plagues and this history of fleas seems hygienically anomalous with the development of things like “flea circuses” or “flea markets”

Importantly, plague was spread considerable distances by rat fleas on ships. Infected ship rats would die, but their fleas would often survive and find new rat hosts wherever they landed. Unlike human fleas, rat fleas are adapted to riding with their hosts; they readily also infest clothing of people entering affected houses and ride with them to other houses or localities.

The idealized image of the free market is the seasonal trade route with its bazaars or agoras with exchange regulated not only by coinage but also the space in which these transactions occur: formal and informal, official and illegal. The market for speech in public spaces, as we have seen is even more controversial whether OWS or Citizens United. Those who would claim that the web is a free market attempt to base it on both conventional and less conventional “flea market” exchange sites: eBay, gunauctions, etc. many transactions and their prices/costs are less formal and perhaps as invisible or virtual as during any point in recordable or documentable history. Entertainment also accompanied the historical market-route culture so a variety of actions and exchanges developed with the more fundamental trade of basic sustainence goods and services. The space and scale of such activity is by its very actions marginal and gold mining and gold farming are not so different, and economies have treated such insurgent activities at their peril. insurgencies are like fleas, ubiquitous and virtually invisible.

The first records of flea performances were from watchmakers who were demonstrating their metalworking skills. Mark Scaliot in 1578 produced a lock and chain which were attached to a flea. Flea performances were first advertised as early as 1833 in England, and were a major carnival attraction until 1930. Some flea circuses persisted in very small venues in the United States as late as the 1960s. The flea circus at Belle Vue Zoological Gardens, Manchester, England, was still operating in 1970. At least one genuine flea circus still performs (at the annual Oktoberfest in Munich, Germany) but most flea circuses are a sideline of magicians and clowns, and use electrical or mechanical effects instead of real fleas.

Replacing actual fleas by mechanical and electrical effects is a parody of industrialized labor’s technological substitutes and their spectacular globalization. More spectacles to flee are found below the fold as conflict concentrates in urban centers and their peripheries are defined by linear demolition and alienated margins. All of these arterial relations experience blockages or barricades.

Activist and Pulitzer Prize winning journalist, Chris Hedges discusses the forces driving the acceleration of global decline,the military mind and the antidote to defeatism in a two part interview with Abby Martin on RT’s “Breaking the Set.”

“The banks own the place.” Sen. Dick Durban said that back in 2009 when he was trying to get 60 votes lined up for bankruptcy reform. at the time he was referring to Congress.

“And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place,” he said on WJJG 1530 AM’s “Mornings with Ray Hanania.” Progress Illinois picked up the quote.

The banks have now gone beyond just financing. According to Matt Taibbi at Rolling Stone, in their most devious scam yet, ” Banks are no longer just financing heavy industry. They are actually buying it up and inventing bigger, bolder and scarier scams than ever”

Most observers on the Hill thought the Financial Services Modernization Act of 1999 – also known as the Gramm-Leach-Bliley Act – was just the latest and boldest in a long line of deregulatory handouts to Wall Street that had begun in the Reagan years. [..]

…

…it would take half a generation – till now, basically – to understand the most explosive part of the bill, which additionally legalized new forms of monopoly, allowing banks to merge with heavy industry. A tiny provision in the bill also permitted commercial banks to delve into any activity that is “complementary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally.”

Complementary to a financial activity. What the hell did that mean?[..]

Today, banks like Morgan Stanley, JPMorgan Chase and Goldman Sachs own oil tankers, run airports and control huge quantities of coal, natural gas, heating oil, electric power and precious metals. They likewise can now be found exerting direct control over the supply of a whole galaxy of raw materials crucial to world industry and to society in general, including everything from food products to metals like zinc, copper, tin, nickel and, most infamously thanks to a recent high-profile scandal, aluminum. And they’re doing it not just here but abroad as well: In Denmark, thousands took to the streets in protest in recent weeks, vampire-squid banners in hand, when news came out that Goldman Sachs was about to buy a 19 percent stake in Dong Energy, a national electric provider. The furor inspired mass resignations of ministers from the government’s ruling coalition, as the Danish public wondered how an American investment bank could possibly hold so much influence over the state energy grid [..]

(B)anks aren’t just buying stuff, they’re buying whole industrial processes. They’re buying oil that’s still in the ground, the tankers that move it across the sea, the refineries that turn it into fuel, and the pipelines that bring it to your home. Then, just for kicks, they’re also betting on the timing and efficiency of these same industrial processes in the financial markets – buying and selling oil stocks on the stock exchange, oil futures on the futures market, swaps on the swaps market, etc.

Allowing one company to control the supply of crucial physical commodities, and also trade in the financial products that might be related to those markets, is an open invitation to commit mass manipulation. It’s something akin to letting casino owners who take book on NFL games during the week also coach all the teams on Sundays [..]

…

…The situation has opened a Pandora’s box of horrifying new corruption possibilities, but it’s been hard for the public to notice, since regulators have struggled to put even the slightest dent in Wall Street’s older, more familiar scams. In just the past few years we’ve seen an explosion of scandals – from the multitrillion-dollar Libor saga (major international banks gaming world interest rates), to the more recent foreign-currency-exchange fiasco (many of the same banks suspected of rigging prices in the $5.3-trillion-a-day currency markets), to lesser scandals involving manipulation of interest-rate swaps, and gold and silver prices.

But those are purely financial schemes. In these new, even scarier kinds of manipulations, banks that own whole chains of physical business interests have been caught rigging prices in those industries [..]

…When does the fun part start?

It would seem the “fun” has already begun for the banks while the pillaging continues under the watchful eyes of the congress, the Department of Justice and banking regulators.

Introductory Note: As background for this diary, it might be helpful to read Geminijen’s excellent and balanced diary from a few weeks ago, Anti-Capitalist Meetup: Fagor Goes Bankrupt – Trouble in Camelot, which discusses one of the world’s most important cooperative movements, founded by a do-gooder Catholic priest. The subject of the instant diary also involves cooperatives, but as will be apparent, much more.

I am biased but to me, “Prout,” which stands for “Progressive Utilization Theory,” is a lovely theory of progressive socialism we all should study, learn from, and consider adopting as part of our praxis and our goals for humanity. Unfortunately, as a new student of Prout, I cannot nearly do it justice in this diary or anywhere else at this time. In addition, I am not in a position to report on the practical experiences of putting Prout into practice. As someone who grew up in irrational Christian fundamentalism (and still lives in the repressive Deep South, where I can see such “faith” put into practice on a daily basis in anti-“other” bigotry and legislation), I no longer like to make my decisions based on “enthusiasm” for what people, spiritual or otherwise, say as opposed to what they do. And I am HIGHLY skeptical about any religion’s ability to confront the harsh world of capitalism in an effective and objective manner (although, from what I understand, Prout’s associated spiritual movement claims not to be a religion).

But I do not want to let my skepticism itself turn into blinders or cynicism for what may have value in the critical work for justice down here on terra firma. All human endeavors are to some degree a mixed bag. I am, after all, a socialist, after a century of ultimate public humiliation of the cause I still dare to hold dear. Course correction is nothing to be embarrassed about but rather something to be celebrated. The work to save humanity is entitled to a mulligan every single day until we get it right.

The first part of my personal credo is to “accept[] life’s complexity.” To me that includes the challenge to evaluate honestly both the positives and the negatives of all things relating to “spirituality.” Prout is not only a system with many complex moving parts but also a holistic system whose whole is intended to vastly exceed the sum of its parts. I can only give my gut impressions of whether it could even theoretically help to accomplish the enormous task of like “saving the world” or something else “major” for humanity, but I am not qualified to explain much less critique all of its parts.  

Fortunately, I have a lovely book to help me explain its details, Dada Maheshvarananda’s 2012 updated version of a book first published in 2003, and currently titled After Capitalism: Economic Democracy in Action (Innerworld Publications).

And, I have you, my comrades, to help me critique the parts and the whole within the context of various movements and sub-movements on the left, both historical and potential.

Dr. Marcos Arruda says of the book in the Foreword, “The nine years that have passed since Dada Maheshvarananda first published this precious book have proven its validity and relevance.” I could not agree more. One of the things I have greatly benefited from in the last couple of years are book recommendations from kindred spirits on the left with whom I have gratefully come into contact via the information superhighways and byways. I am still no socialist scholar (and do not make it a priority to become one), and often the people giving me book suggestions are, but if I had to make one book recommendation at this point in my fledgling socialization process, this would be it. Not because the book is perfect or because I agree with everything in it or in Prout more generally, but because Prout as explained in this book comes closest to announcing to the world the direction I think we should be heading than anything else I have yet read.

Plenty of us realize capitalism is a disaster. Marx got that quite right, and Prout, whose founder actually was a big fan of Marx, seconds the notion. Prout also does a really good job of telling us where we should be going to fix things. And this book is a compelling, reasonably detailed, and accessible explanation of Prout.

I only learned about Prout when I read Hans Despain’s helpful article It’s the System Stupid: Structural Crises and the Need for Alternatives to Capitalism in the November 2013 Monthly Review. Here Despain first succinctly surveys the playing field:

The conventional wisdom is “There Is No Alternative,” or TINA. For this reason most Americans simply acquiesce to capitalistic social relations and, like Sisyphus, are resigned to performing eternal tasks while enduring the “endless” quadruple crises generated by a pathological system.

The most extraordinary aspect concerning the absence of an alternative is that it is fallacious. The capitalistic system itself must be transformed. To put it into a slogan: Capitalism Is No Alternative, or CINA.

Despain describes Maheshvarananda’s book as outlining “the failures and pathologies of ‘multinational corporate’ capitalism. He argues that Prabhat Ranjan Sarkar’s PROgressive Utilization Theory, or PROUT economics, already exists as a well-developed alternative to both capitalism and state socialism. PROUT has important similarities with both Marxism and Participatory Economics, but its real philosophical basis is in Tantra Yoga, with influences from Hinduism, Taoism, and Buddhism (especially Zen). …”

Then Despain contrasts it to three other recent books outlining somewhat comparable approaches on the left:

Maheshvarananda, much like Wolff, Schweickart, and Alperovitz, believes that the activity needed for the democratization of the workplace and economy is already underway. Maheshvarananda offers many existing examples of Proutian enterprises. Most of these are the same discussed by Schweickart and Alperovitz, including the Mondragon cooperative in Spain and Evergreen in Cleveland. However, Maheshvarananda also offers extensive details of cooperatives in Venezuela, where he has founded a PROUT research institute.

In addition to mending the social pathologies of capitalism, he explains how Proutianism promotes leisure, spirituality, and a new humanistic ethic. He also insists that a transformation away from capitalism is urgently needed for environmental production and a new Agrarian Revolution to save the planet and human life. In this sense, Maheshvarananda is far more ambitious than Wolff, Schweickart, and Alperovitz, and is sure to be far more controversial for left-wing theorists and activists. …

Wolff, Schweickart, and Alperovitz … have given less thought toward the longer term goals. Maheshvarananda has in mind a very long-term alternative to capitalism. It requires not only transformation in the workplace, but transformations in the political dimension. On the one hand, it could be argued his vision is far more remote, while on the other hand, once the transformation within the workplace begins, the ripple effect could be massive and sudden. For this reason Maheshvarananda’s perspective can be understood in highly practical terms and can be seen as complementary to the works of the other three. …

From whence cometh Prout? A brilliant loving species-being who seemed particularly determined, while walking a blissful personal path, to eschew any selfish material benefits for himself from his insights, and whose most determined followers are described as monks and nuns, but seem remarkably well-connected to a place I and all on the left take quite seriously, namely the suffering-filled, harsh, and chaotic reality where the billions of marginalized poor and desperate live around our class-embattled world:

Prabhat Ranjan Sarkar was born in 1922[ 6] in Jamalpur, Bihar, India into a respected family that had its roots in regional leadership and ancient spiritual traditions. To support the family after his father’s death, Sarkar chose to discontinue his higher education in Calcutta, and in 1941 returned to Jamalpur to work as an accountant in the railways. About that time he began to teach the ancient science of Tantra meditation, insisting that every practitioner follow a strict code of moral conduct. In 1955, at the request of his followers, he founded the socio-spiritual organization Ananda Marga (” The Path of Bliss”). In 1959 he introduced the Progressive Utilization Theory (Prout), a blueprint for how to reorganize society and the economy for the welfare of everyone.

The Ananda Marga and Prout movements spread quickly in India during the 1960s. Many of Sarkar’s followers – who held key positions in the Indian civil service – actively challenged the systemic corruption of the government as well as the Hindu caste system. Opposition therefore arose from nationalistic Hindu groups, eventually leading the government to declare Ananda Marga to be a politically subversive revolutionary organization, banning any civil servant from being a member. Perhaps surprisingly, the Communist Party of India-Marxist (CPI-M) – which for decades controlled the state government of West Bengal – also opposed Ananda Marga and Prout because Sarkar’s unique blend of spiritual and social ideals was attracting members away from the Party.

Maheshvarananda, Introduction.

Many, to my current view highly unfair, attacks on the group both in India and worldwide have been documented, which I will not go into here in any detail, including the framing for a 1978 bombing of a Hilton in Sydney, Australia that actually seems to have been the murderous plot of the self-justifying state security apparatus. The recent decades have been gradually more serene for the serene folk who make up the movement, but not because they avoid desperate situations. Rather, in a way that seems highly compatible with Pope Francis’s Evangelii Gaudium (which I discussed in detail here from a combined socialized praxis and Jesuit history and scholarship perspective) the movement seems to want to make both tangible and intangible headway in, and to replace as soon as possible, a sick capitalist world. The emphasis of Prout on cooperatives is shared with the Catholic Church, on paper at least, going back to the late 19th century. But, unlike the Church at most times, Prout seems to be fixated on making cooperatives a “reality” on the nasty ground around the world rather than a pious talking point for criticizing those nasty commies without actually proposing and fighting for a suitable alternative. Further, Prout has an openness to spirituality that many Liberation Theology and leftist Dorothy Day-style Catholics have found to be perfectly compatible with their faith in action. Given that I am a leftist pro-choice “Anglo-Catholic,” I just want all us supposedly “spiritual” folk, what with the whole idea of communion and such, to get along while waging a kind but effective revolution, which means to keep our eye on the prize of rejecting capitalism and putting in a system that meets shared “Proutist” goals.

Please go below the fold for my generally favorable summary of the good monk’s omnibus Prout in a nutshell, as well as a few concerns that I have about Prout. Or, if you have no interest in spirituality and other “soft” topics which much of the world may now or in the future appreciate as complementary to economic justice, here’s Despain’s nice but barebones “materialist” list:

PROUT’s economic principles are that: (1) all citizens deserve the minimum requirements of life of food, shelter, clothing, medical care, and education; (2) employment is guaranteed; (3) the progressive use of science and technology and a federal institution geared toward research and development should be promoted; (4) the federal political system must include decentralized planning at the level of the local economy, with balanced development of what is needed by local citizens; (5) a three-tier economic system that supports privately owned small businesses, cooperatively owned medium and large businesses, and government-run large industries must be created; (6) “decentralized self-sufficient” local economies should be maximized; and, (7) crucial to PROUT, are the cooperatively owned businesses.

I like this list, as it initially sparked my interest in Prout. However, for brevity’s sake he also necessarily left off many materialist Proutist notions, including that little subject of “world government,” (a critical aspect of Prout’s long-range ideas for governance, Ch. 11) a dream many of us, Proutists or not, hold dear.

In the march of the centuries, perhaps there will be one single nation covering the universe: the federal nation

Simón Bolívar

(For more amateur photography by yours truly from a recent field trip to the U.N. Headquarters in New York City, and heartfelt support for one single nation covering the universe without squandering centuries we do not have and billions more lives on capitalist despair, please see this tongue-twisting hopeful post, Niebuhrian Coercion and a Non-Utopian Version of a Vision That Hopefully Will Never Die: Bolivarian-Burnsian International Justice and Solidarity.)

The Democratic held Senate tried to pass a three month extension of unemployment benefits for 1.7 million people whose benefits had run out since December. It failed by 2 votes, 58-to-40, the second vote was by Senate Majority Leader Harry Reid (D-NV), a formality so he could reintroduce the bill at a later date. So, it actually failed by one vote. Since 2008, the federal government has provided extended benefits to the unemployed who used up the standard 26 weeks provided by the states. The average time it takes to find another job is at least 37 weeks. Republican Sens. Dean Heller (Nev.), Susan Collins (Maine), Lisa Murkowski (Alaska) and Kelly Ayotte (N.H.) voted with Democrats to end debate.

In other words, the Republicans filibustered, again. Yes, I know it is a cloture vote to end debate. No matter what you call the need for 60 votes, a super majority, for whatever reason, that is a filibuster. They refused to end debate to bring the bill to the floor for a majority vote.

Democrats tried to sweeten the deal by banning millionaires from receiving benefits. Thursday’s measure would have required unemployment claimants to certify they’d earned less than $1 million in the previous year; currently, there is no income restriction.

The bill’s cost would have been offset through “pension smoothing,” or allowing companies to make smaller contributions to employee pensions, thus earning higher profits and giving the government more tax revenue.

But that’s wasn’t good enough for 40 Republican senators. Sen, Reid has vowed not to give up getting the long term unemployed the benefits they need.

On Tuesday, the Congressional Budget Office released it’s latest report on the Affordable Care Act’s impact on the economy. In the report it estimated that the work force would be reduced by 2.3 million workers by 2021 (pdf). Needless to say, the right wing media and Republicans seized on this as proof positive that Obamacare was a “job killer.”

Well not so fast, this is what the report said:

CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor-given the new taxes and other incentives they will face and the financial benefits some will receive. Because the largest declines in labor supply will probably occur among lower-wage workers, the reduction in aggregate compensation (wages, salaries, and fringe benefits) and the impact on the overall economy will be proportionally smaller than the reduction in hours worked. [..]

The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor.

In other words, this isn’t about jobs, it’s about whether or not workers will choose to work less in order to hold on to their eligibility for subsidized health care or Medicaid.

The Washington Post‘s fact checker, Glenn Kessler clarified:

First, this is not about jobs offered by employers. It’s about workers – and the choices they make.

The CBO’s estimate is mostly the result of an analysis of the impact of the law on the supply of labor. That means how many people choose to participate in the work force. In other words, the nonpartisan agency is examining whether the law increases or decreases incentives for people to work. [..]

Some might believe that the overall impact of the health law on employment is bad because it would be encouraging people – some 2.3 million – not to work. Indeed, the decline in the workforce participation rate has been of concern to economists, as the baby boom generation leaves the work force, and the health care law appears to exacerbate that trend.

Moreover, the argument could go, this would hurt the nation’s budget because 2.3 million fewer people will pay taxes on their earnings. That’s certainly an intellectually solid argument – though others might counter that universal health care is worth a reduction in overall employment – but it’s not at all the same as saying these jobs would be lost.

On the brighter side, before a House hearing on Wednesday the Director of the CBO Doug Elmendorf made this argument:

“The reason we don’t use the term ‘lost jobs’ is there is a critical difference between people who like to work and can’t find a job – or have a job that’s lost for reasons beyond their control – and people who choose not to work,” he explained. “If someone comes up to you and says, ‘The boss says I’m being laid off because we don’t have enough business to pay,’ any other person feels bad about that and we sympathize for them having lost their job. If someone says, ‘I decided to retire or stay home and spend more time with my family and spend more time doing my hobby,’ they don’t feel bad about it – they feel good about it. And we don’t sympathize. We say congratulations.”

Matt Iglesias at Mother Jones makes a very salient point about the impact on the job force:

Obamacare will reduce employment primarily because it’s a means-tested welfare program, and means-tested programs always reduce employment among the poor.

If, for example, earning $100 in additional income means a $25 reduction in Obamacare subsidies, you’re only getting $75 for your extra work. At the margins, some people will decide that’s not worth it, so they’ll forego working extra hours. That’s the substitution effect. In addition, low-income workers covered by Obamacare will have lower medical bills. This makes them less desperate for additional money, and might also cause them to forego working extra hours. That’s the income effect.

This is not something specific to Obamacare. It’s a shortcoming in all means-tested welfare programs. It’s basically Welfare 101, and in over half a century, no one has really figured out how to get around it. It’s something you just have to accept if you support safety net programs for the poor.

It’s worth noting, however, that health care is an exception to this rule. It doesn’t have to be means tested. If we simply had a rational national health care system, available to everyone regardless of income, then none of this would be an issue. There might still be a small income effect, but it would probably be barely noticeable. Since everyone would be fully covered no matter what, there would no high effective marginal tax rate on the poor and no reason not to work more hours. Someday we’ll get there.

Optimistically, people leaving jobs or working less may be an opportunity for someone else to take their place. On the other side it could increase costs for employers who would then reduce the number of people they hire. This is an educated guessing game that we would not be engaged in if there were single payer or a public option that leveled the playing field.

The other day the Wall Street Journal saw fit to post a now infamous screed by a Silicon Valley billionaire, Tom Perkins, who compared progressive political speech to Kristallnacht, the night of religious violence that led to the death of 91 Jews and paved the way politically for the Nazi Reich and the Holocaust. At Huffington Post, Richard (RJ) Eskow noted that in his rant, Mr, Perkins made some curious efforts to attack the San Fransisco Chronicle in defense of his ex-wife, “bodice ripper” author Danielle Steele. He apparently objected to some criticism that was made about a hedge, specifically this hedge:

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Now granted that is one humongous hedge. however, the objection that was made by the Chronicle was that it was obstructing the view of a historic landmark building that just happens to be the residence of Ms. Steele. There was no disparaging comments about her in the article which is barely a paragraph long but according to Mr. Perkins view it was “libelous and cruel attacks” at the orders of those damned lefties of Occupy Wall Street. He later admitted that the hedge issue sparked his poutrage. The fact that this triggered a spurious rant that the 1% are being attacked and tantamount to one of histories worst events casts serious some doubt about Mr. Perkins’ perspective. Just how did someone who is control of billions get this stupid? Too much rarefied air of places like Davos?

I agree with Mr, Eskow who wrote:

Even as global financial leaders fret over inequality at Davos, Tom Perkins is using extremist rhetoric to shut down such talk among his social inferiors. After an ugly screed, inspired in part by a gardening dispute, one hesitates to imagine what Perkins has in mind for more progressive-minded one-percenters like those at Davos and Kleiner Perkins — a Night of the Long Pruning Shears, perhaps?

Perkins may not like to hear it, but rising wealth inequality is shattering our society, as San Francisco’s plight so amply demonstrates. There is no room left for middle-class life in a society dominated by excessive wealth. Perkins may choose to become outraged over trivial as well as serious offenses, but he’s in the process of losing the one treasure which money can’t guarantee yet: the respect of others.

Problem is, I don’t think Mr. Perkins cares if we respect him. We don’t occupy his world.

 

What world do the economics writer live in? It can’t be anywhere on the planet Earth, never mind the United States, especially when they write things like this:

Obama’s Puzzle: Economy Rarely Better, Approval Rarely Worse

President Obama will pronounce on the state of the union for the fifth time on Tuesday, and never during his time in office has the state of the economy been better – yet rarely has he gotten such low marks from the public for his handling of it.

Not only have economic indicators shown progress toward pre-recession health, but many forecasters are predicting what one called “a breakout year” for growth. A new study from a Federal Reserve economist even put a more benign spin on a negative trend, the shrinking labor force, by attributing the decline not to discouraged unemployed workers who have quit looking for jobs, but to the first baby-boomer retirements.

Demand for labor is up and the unemployment rate is below 7 percent for the first time since November 2008. Consumers, buoyed by rising home prices and stock values, are spending more; so are businesses. Exports are growing as Europe regains health. The fiscal drag from state and federal spending cuts has abated.

I suppose that the writer, Jackie Calmes, who covers the White house, is a very smart person but obviously not tuned into what is a happening outside the bubble of the political pages of the New York Times. Quoting one anonymous Federal Reserve economist without evidence to refute the actual numbers from the Bureau of Labor statistics is ether more spin or bad journalism, probably both. We all know that the markets and the GDP are not true indicators of how well the majority of Americans are faring economically.

However, the explanation for the negativity about the economy and not just the president’s approval ratings but those of the Congress, is simple: since the “recovery” started in June 2009, 95 percent of the income gains have gone to the richest 1 percent (pdf) of the U.S. population. For a vast number of Americans the recession never ended.

Just look at what is happening in New York City, since the drastic cuts to SNAP and unemployment benefits ended, food banks and soup kitchens have seen an increase in the number of people seeking assistance and are now running out of food

New York, NY – January 22, 2014 – New research from Food Bank For New York City reveals a majority of New York City’s food pantries and soup kitchens (85 percent) experienced an increase in the number of visitors following a $5 billion national cut to the Supplemental Nutrition Assistance Program (SNAP, also known as food stamps) that took effect on November 1st, 2013. In fact, the numbers of visitors post-November 1 actually exceeded the number of visitors seen in November 2012, in the immediate aftermath of Super Storm Sandy. [..]

* 85% reported an overall increase in visitors in November 2013, as compared to November 2012, immediately following Super Storm Sandy.

* 76% of food pantries and soup kitchens saw an increase in visitors in November 2013 compared to the previous two months, with nearly half (45%) reporting considerable increases in visitor traffic of more than 25%;

* Nearly half (48%) of emergency food providers ran out of food required for meals or pantry bags, with 26% reporting having to turn people away due to insufficient food supplies;

* Nearly one quarter (23%) of food pantries and soup kitchens reported having to reduce the total number of meals they otherwise provided

  That should be setting off alarm bells in Congress and at the White House. It isn’t. Congress is now set to pass a farm bill that further cuts food assistance by another $8.8 billion dollars over 10 years but continues generous subsidies for farmers.

The president will address this inequality and need for jobs with a living wage in the State of the Union address tonight. The White House has announced that he will raise the minimum wage for federal contractors to $10.10 an hour by executive order. The president has also said that he has “a pen and a phone” and is going to use them. The question is, with so many Americans suffering and the middle class shrinking, what took five years? And why should anyone believe him now?

Perhaps if he started with vetoing this farm bill and taking a stand against the Republicans and the corporate Democrats who enable them, then, maybe, he’d see an improvement in his approval ratings. Another flowery speech won’t do it.

And, Ms Calmes, read something other than your own paper, you might find out what’s going on in the world outside the offices of the NYT. Better yet, check out a food kitchen or pantry.