Lately I’ve been getting deluged with emails from politicians like President Obama, various Democratic Party fundraisers and political organizations that go a little like this:
Dear Joe,
Evil Republicans!
Koch Brothers!
The Senate!
I want to fight for you!
Can you help me out with $3, $5, $10 or more?
Really? These folks want to fight for me?
Look Honey, there’s a fella in a thousand dollar suit who wants to fight for me!
Now that the academic and evidentiary support for austerity is shot full of holes, President Obama has an opportunity to perform a face-saving extrication from his position. Will he do it?
A recent study by a grad student at the University of Massachussets has pointed out critical errors in celebrated Harvard economists Carmen Reinhart and Ken Rogoff’s study which has been the much-cited intellectual underpinning of the austerity movement. In short R-R’s study showed a correlation between high levels of national debt (with a stated critical threshold point at 90% of GDP) and slow economic growth. The results of the study have been often stated as proof that debt at 90% GDP causes slow economic growth and that austerity measures must be employed to bring down debt.
Reinhart-Rogoff quickly achieved almost sacred status among self-proclaimed guardians of fiscal responsibility; their tipping-point claim was treated not as a disputed hypothesis but as unquestioned fact. For example, a Washington Post editorial earlier this year warned against any relaxation on the deficit front, because we are “dangerously near the 90 percent mark that economists regard as a threat to sustainable economic growth.” Notice the phrasing: “economists,” not “some economists,” let alone “some economists, vigorously disputed by other economists with equally good credentials,” which was the reality.
There were good reasons for not accepting the Reinhart and Rogoff results even before this error was uncovered, as many of us had argued. Most importantly there is a serious issue of the direction causation. Countries tend to have high debt levels because their economies are doing poorly.
Unfortunately, there was not much press notice of the causation problem in R-R’s study, probably because it’s the kind of story that the media find too difficult to explain. But when the grad student from the University of Massachussets discovered spreadsheet errors in their work, now there was an issue that our news media could latch onto with confidence that it was within their ability to explain it. Consequently it has gotten quite a bit of coverage and R-R’s study has been discredited.
Surely it has an historical meaning and there are some roundabout descriptions of modern progressivism online like this one from Wikipedia:
Today, members of the Green Party of the United States are most likely to self-identify as liberal progressives. In the U.S. Congress, the Congressional Progressive Caucus is the most liberal wing of the Democratic Party, and it is often in opposition to the more centrist or conservative Democrats who form the Blue Dogs caucus. It is also in near-continuous opposition to the Republican Party.
“The truth of the matter is that my policies are so mainstream that if I had set the same policies that I had back in the 1980s, I would be considered a moderate Republican.”
Further, what does it mean when three quarters of the Congressional Progressive Caucus won’t stand up for the indispensable legacy of the progressive New Deal and Great Society advances, Social Security, Medicare and Medicaid?
For the social compact of the United States, most of the Congressional Progressive Caucus has gone missing.
While still on the caucus roster, three-quarters of the 70-member caucus seem lost in political smog. Those 54 members of the Progressive Caucus haven’t signed the current letter that makes a vital commitment: “we will vote against any and every cut to Medicare, Medicaid, or Social Security benefits — including raising the retirement age or cutting the cost of living adjustments that our constituents earned and need.”
… Addressed to President Obama, the letter has enabled members of Congress to take a historic stand: joining together in a public pledge not to vote for any cuts in Social Security, Medicare or Medicaid. …
The Progressive Caucus co-chairs, Raul Grijalva and Keith Ellison, signed the letter. So did Barbara Lee, the caucus whip. But no signer can be found among the five vice chairs of the Progressive Caucus: Judy Chu, David Cicilline, Michael Honda, Sheila Jackson-Lee and Jan Schakowsky. The letter’s current list of signers includes just 16 members of the Progressive Caucus (along with five other House signers who aren’t part of the caucus).
What about the other 54 members of the Progressive Caucus? Their absence from the letter is a clear message to the Obama White House, which has repeatedly declared its desire to cut the Social Security cost of living adjustment as well as Medicare. In effect, those 54 non-signers are signaling: Mr. President, we call ourselves “progressive” but we are unwilling to stick our necks out by challenging you in defense of Social Security, Medicare and Medicaid; we want some wiggle room that you can exploit.
Now, however, the, “no doubt progressive” President is about to release his budget, which will reportedly contain cuts to programs that have always been the core of progressive policy:
President Obama’s budget proposal to be unveiled next week will include cuts to Social Security and Medicare, according to media reports Friday morning.
The most controversial element of Obama’s proposal is the inclusion of “chained CPI,” the adjustment that would over time reduce cost-of-living increases to Social Security and other federal benefit programs – effectively, a cut to Social Security benefits by tying them to inflation.
Progressives in the Media and the Blogosphere
So while many congressional “progressives” have chosen between their divided loyalties and come up as cowering yes men for the misguided juggernaut of the Obama administration, parts of the progressive media are spouting propaganda:
John Nichols tells only part of the truth in this piece and the failure to represent the whole truth makes it a specious bit of propaganda, that distracts and diverts attention away from those that are carrying out the agenda of the big money forces he decries.
[Perhaps this is a problem created by editing as Nichols is generally a reasonable guy, who has written a number of articles calling for opposition to President Obama’s Chained CPI plan. This was a publication of The Nation magazine, so perhaps they edited it and it represents their editorial position more than Nichols’ opinions and position. Since Nichols is the face, name and voice of this piece, however, the criticism will be directed at him and presumably if he gives a damn about what some blogger says, he can assert that the blame lays elsewhere.]
Nichols explains that in, as he puts it a, “Dollarocracy,” the ideas that get put forward are the ideas that have big money behind them, like cutting Social Security. He goes on to highlight the fact that austerity-loving-corporate-greedheads were able to get, “one of their own,” Paul Ryan on a ballot to run for Veep to push their plans. What Nichols fails to mention is that those austerity-loving-corporate-greedheads were going to win no matter what this election. They already have a Democratic president who is promoting their agenda on the other ticket. Guess what, they won! And there was no chance that they wouldn’t!
How is it that Nichols could have failed to notice and call out the Obama administration and the many Democrats that are performing the bidding of the, “Dollarocracy” with such alacrity these days? Nichols is an experienced pundit, he certainly has been around and allegedly paying attention long enough to know who has been pushing the 1%’s, “Dollarocracy” agenda.
Let’s take a trip through some of the evidence that one would have to ignore to create that Dollarocracy video with such a glaring omission in it…
Have you heard about Dick Durbin’s proposal for a new Social Security reform commission? It sounds remarkably like the failed Simpson-Bowles Catfood Commission, complete with special rules that allow its recommendations, if approved by the commission, to take the express route to the floor of Congress for a vote with no amendments and limited debate.
The number two Democrat in the Senate championing this bipartisan bill was asked if this new commission would be like the Greenspan commission of the 1980’s and he said that he prefers to refer to it as similar to Simpson-Bowles. One of the most interesting things about it is that this time, the commission won’t be dissolved after it finishes its work. It comes back to life every ten years.
So while we are very happy that the Senate rejected Chained CPI in the budget that they passed last week, the reason why it was rejected is most likely because a separate commission for “reforming” Social Security is on the way, and there are other reasons to use caution while considering the weight and effect of the Sanders amendment.
In a recent article, Dean Baker wonders why the media elites did not find the Sanders amendment to be newsworthy. I agree with his points about the national media corruption on the subject, and that they have been pushing their favorable opinion on cuts, and how the facts and arguments against the cuts have been curiously absent in their reporting and their programs.
This is why the vote on the Sanders amendment should have been newsworthy. Here was an opportunity for all the senators who have explicitly or implicitly supported the adoption of the chained CPI to step up and say why the switch to the chained CPI was a good and necessary measure. However, not one senator was prepared to stand up and argue the case. Not one member of the senate wanted to go on record in support of this cut to Social Security.
With all the Republicans who pronounce endlessly on the need to cut entitlement spending, there was not a single Republican senator who was prepared to say that switching the Social Security COLA to a chained CPI was a good idea. And even though President Obama has repeatedly stated as clearly as he could that he supported the switch to a chain CPI, there was not one Democratic senator who was prepared to stand up and speak in solidarity with the president.
But let’s not get complacent. There is nothing that the media elite and the proponents of Social Security cuts would like more than for us to let our guard down and say “phew, now we can relax because the Senate said they oppose chained CPI cuts to Social Security.” In fact, it would not surprise me at all if the reason that this amendment was allowed to the Senate floor by the Democratic leadership was that it might calm down the grassroots left and organizations like AARP and give us a false sense of security, resulting in less organizing, less protesting, while they form a new commission prepare the way for the cuts that they are clearly determined to impose.
The people in power who want to cut Social Security have been working at this for decades, with renewed fervor in recent years, some of them spending millions for astroturf groups, propaganda campaigns, and influence over elected officials. One non-binding amendment in the Senate is no hurdle for them and if anything, I believe they will try to use it to their advantage.
Some other cautions about the Sanders amendment:
1) The amendment was framed as opposition to using chained CPI for veterans benefits.
2) The amendment is non-binding.
3) While Sen. Sanders tried to get a roll call vote, he was persuaded by Sen. Murray to accept a voice vote, so none of the Senators, except the sponsors of the amendment, are on the record. The sponsors are: Sens. Bernie Sanders (I-Vt.), Tom Harkin (D-Iowa), Mazie Hirono (D-Hawaii) and Sheldon Whitehouse (D-R.I.). Four senators.
4) Sen. Burr of North Carolina is on the record as saying he “supported protecting veterans, but supported using chained CPI elsewhere”.
The Captains of Catfood are getting ready for another big push to steal your Social Security. Simpson and Bowles are getting into high gear again:
Fifty-eight million Americans saw President Barack Obama and Mitt Romney tangle over former Sen. Alan Simpson (R-Wyo.) and former White House Chief of Staff Erskine Bowles’s deficit reduction plan. “Simpson-Bowles” was the most popular Google search during the 90-minute debate.
But behind the scenes, the two deficit hawks are enjoying more than just a search engine moment. The pair is heading to Virginia’s Mount Vernon next week to meet with the new bipartisan Senate “Gang of Eight” in an effort to hash out a major deficit and tax package. …
Inside the Capitol, there’s an increasing recognition that any major deficit deal will at least need the imprimatur of Simpson and Bowles in order to win over votes from both sides of the aisle.
Along with former Sen. Judd Gregg (R-N.H.), they’ve met with Speaker John Boehner (R-Ohio), upwards of half the Senate, major columnists and business leaders seeking support for a massive deficit compromise inspired by the original Simpson-Bowles framework.
President Barack Obama laid out an astoundingly ambitious second-term agenda in an interview published Wednesday, vowing to forge a “grand bargain” with Republicans to reduce the national debt and achieve comprehensive immigration reform-all in 2013. …
“I am absolutely confident that we can get what is the equivalent of the grand bargain that essentially I’ve been offering to the Republicans for a very long time, which is $2.50 worth of cuts for every dollar in spending, and work to reduce the costs of our health care programs,” Obama said. (The White House quickly clarified that he meant $2.50 of spending cuts for every dollar in new tax revenue).
“We can easily meet-‘easily’ is the wrong word-we can credibly meet the target that the Bowles-Simpson Commission established of $4 trillion in deficit reduction, and even more in the out-years, and we can stabilize our deficit-to-GDP ratio in a way that is really going to be a good foundation for long-term growth,” Obama said. “Now, once we get that done, that takes a huge piece of business off the table.”
A perfect storm is brewing in the elite backrooms where policy is made and it is beginning to bubble up from the factory floor into the media where their policies are sold. Prepare the vital organs of your body for a “December Surpise” as some are calling it. The debt ceiling will be reached before the elections, sequestration from the Budget Control Act of 2011 will be going into effect (and huge military contractors are already threatening massive layoffs). The elite rhetoric about the need for austerity will likely be at a fever pitch on the campaign trail and in the media.
It’s going to be a mighty (if completely contrived) crisis.
Fortunately the elites have already got the answer to all of the problems that are being prepared to come to a head. Never fear, they’ve been working on it for decades.
The extreme right wing’s attacks and deceptive campaigns over the course of decades are now close to fruition with the help of neoliberal Democrats.
President Obama has come very close to helping right-wingers realize their long-desired goal; only the incredible intransigence of congressional Republicans has saved the social safety net thus far.
Doing away with the cap on Social Security tax would allow the Social Security trust fund to continue in the black indefinitely and the nation would never need to confront the fact that this peoples’ trust is the one debt elected officials don’t want to pay. It could also raise benefits and there might even be enough left over to lower instead of raise the retirement age.
A diary not about the more sensible but unobtainable goal of getting the rich to pay in support of the rest of the nation. Instead of removing the tax cap to support the middle class, remove the cap and increase the benefit schedule. This does not shore up Social Security as much but it could get another class of people interested, people with influence.
It was so good to see a bit of reality from an elected official. Last week Chris Bowers presented Jan Schakowsky’s deficit reduction plan and tonight she spoke up on the TV.
You can find the transcript here. The interview is really worth viewing and really worth passing around. A proposal that says we don’t have to go after the middle and lower classes and should go after the rich coming from an elected official was refreshing.
But will anybody else ever hear Rep. Jan Schakowsky?
(P)erhaps the most significant result of Simpson’s candor is that Obama loyalists and Beltway media voices are now forced to publicly defend Social Security cuts, because Simpson’s comments have prematurely dragged out into the open what has been an open secret in Washington but was supposed to be a secret plot for everyone else until the election was over. The New Republic’s Jonathan Chait recently decreed, in response to the Simpson controversy, that “liberals should be open to Social Security cuts as part of a balanced package of deficit reduction.” And in The Washington Post today, both the Editorial Page and Dana Milbank defend Simpson and call for cuts in Social Security (Milbank even defends cuts in aid to wounded veterans). That Social Security must be cut is not only a bipartisan consensus among the GOP and “centrist” Democratic wing, but at least as much, among the Beltway media establishment.
But it’s not just good policy, it’s also good politics. You see, unlike the Obamabots and Institutional Democrats, I actually care about electoral victory–
I certainly have not seen eye-to-eye with Bob Shrum on political strategies over the years. So when we’re both beating the same drum with the same urgency at the same time, it’s somewhat unusual.
But we both agree that President Obama and the Catfood Commission threaten the electoral chances of every Democrat running for office this November.
Shrum has a piece in The Week in which he echoes Ed Kilgore and others Democratic strategists in pointing out that the Democrats don’t have an issue to run on this November. Like them, he says that saving Social Security could be the issue that saves their seats as well.
But Shrum is willing to utter the uncomfortable truth that Kilgore ignores: it is deeply, deeply cynical and unconvincing for the Democrats to be out there castigating the GOP for wanting to do the very thing that the White House is privately telling journalists they themselves plan to do by way of the Catfood Commission after the election.
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