Tag: ek Politics

The Triumph of the Right

Robert Reich

Tuesday, October 22, 2013

The Labor Department reported Tuesday that only 148,000 jobs were created in September – way down from the average of 207,000 new jobs a month in the first quarter of the year.

Many Americans have stopped looking for work. The official unemployment rate of 7.2 percent reflects only those who are still looking. If the same percentage of Americans were in the workforce today as when Barack Obama took office, today’s unemployment rate would be 10.8 percent.

Meanwhile, 95 percent of the economic gains since the recovery began in 2009 have gone to the top 1 percent. The real median household income continues to drop, and the number of Americans in poverty continues to rise.

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The biggest debate in Washington over the next few months will be whether to whack the federal budget deficit by cutting future entitlement spending and closing some tax loopholes, or go back to the sequester. Some choice.

The real triumph of the right has come in shaping the national conversation around the size of government and the budget deficit – thereby diverting attention from what’s really going on:  the increasing concentration of the nation’s income and wealth at the very top, while most Americans fall further and further behind.

Continuing cuts in the budget deficit – through the sequester or a deficit agreement – will only worsen this by reducing total demand for goods and services and by eliminating programs that hard-pressed Americans depend on.

The President and Democrats should re-frame the national conversation around widening inequality.

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The central issue of our time is the reality of widening inequality of income and wealth. Everything else – the government shutdown, the fight over the debt ceiling, the continuing negotiations over the budget deficit – is a dangerous distraction. The Right’s success in generating this distraction is its greatest, and most insidious, triumph.

What to Expect During the Cease-Fire

Robert Reich

Thursday, October 17, 2013

We know the parameters of the upcoming budget debate because we’ve been there before. The House already has its version – the budget Paul Ryan bequeathed to them. This includes major cuts in Medicare (turning it into a voucher) and Social Security (privatizing much of it), and substantial cuts in domestic programs ranging from education and infrastructure to help for poorer Americans. Republicans also have some bargaining leverage in the sequester, which continues to indiscriminately choke government spending.

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Here, I fear, is where the President is likely to cave.

He’s already put on the table a way to reduce future Social Security payments by altering the way cost-of-living adjustments are made – using the so-called “chained” consumer price index, which assumes that when prices rise people economize by switching to cheaper alternatives. This makes no sense for seniors, who already spend a disproportionate share of their income on prescription drugs, home healthcare, and medical devices – the prices of which have been rising faster than inflation. Besides, Social Security isn’t responsible for our budget deficits. Quite the opposite: For years its surpluses have been used to fund everything else the government does.  

The President has also suggested “means-testing” Medicare – that is, providing less of it to higher-income seniors. This might be sensible. The danger is it becomes the start of a slippery slope that eventually turns Medicare into another type of Medicaid, a program perceived to be for the poor and therefore vulnerable to budget cuts.

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More generally, the President has been too eager to accept the argument that the major economic problem facing the nation is large budget deficits – when, in point of fact, the deficit has been shrinking as a share of the national economy.

From ‘Bunga Bunga’ parties with under age sex slaves to tax evasion to abuse of his media empire for personal political gain and promoting conservative causes, it’s easy to forget among the mountain of corruption and scandal that former Italian Prime Minister Silvio Berlusconi is not just the face of Fascism as surely as Benito Mussolini, but a pathetic weasel and bully.

Berlusconi ordered to stand trial for bribing senator

By Amalia De Simone, Reuters

Wed Oct 23, 2013 1:16pm EDT

Silvio Berlusconi was ordered to stand trial for corruption on Wednesday, in a fresh legal blow to the former Italian prime minister following his conviction for tax fraud in August and a string of other cases.

Naples prosecutors accuse Berlusconi of bribing Sergio De Gregorio, a former senator in the small Italy of Values party, to switch allegiance as part of an attempt to bring down the center-left government of former Prime Minister Romano Prodi in 2006.

De Gregorio, who has admitted receiving 3 million euros ($4.13 million) from Berlusconi and attempting to persuade other senators to change sides, was sentenced to 20 months in jail after plea bargaining.

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Berlusconi’s legal battles have come close to destroying Italy’s fragile government of left and right, built around an unwieldy alliance between Prime Minister Enrico Letta’s center-left Democratic Party (PD) and Berlusconi’s PDL.

Letta survived a confidence motion earlier this month after center-right rebels forced Berlusconi to retreat from a bid to bring down the coalition, but tensions have continued between hardline Berlusconi loyalists and both the PD and PDL moderates who support the government.

The Senate is expected to vote on stripping Berlusconi of his seat in the upper house under a law banning convicted criminals from parliament.

It is not yet clear when that vote will be held and whether it will come before a separate court ruling banning Berlusconi from holding public office for two years takes effect.

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As well as the tax fraud sentence and the latest trial, Berlusconi is also fighting a separate conviction for paying for sex with a minor and abuse of office in the now-notorious “bunga bunga” case involving former teenaged nightclub dancer Karima El Mahroug, alias “Ruby the Heartstealer”. He has appealed a seven year prison sentence handed down in June.

There are those who are disappointed that Malala Yousafzai didn’t win this year’s Nobel Peace prize, particularly after her meeting with Barack Obama where she stated the obvious truth that unrestricted and unjustified by international law drone strikes by the United States on innocents, especially women, children, and ‘double tap’ strikes on first responders, is increasing, not decreasing anti-U.S. sentiment and terrorist activity.

It’s a sad commentary that a 16 year old has a better grasp of the facts than our political leadership, especially including Obama and the ‘best and brightest’ senior members of his Administration and the institutional Democratic Party.

And certainly her personal story and the sacrifices she has made to educate women in a culture where they are mostly viewed as the chattel slaves of men is compelling.

On the other hand the Organization for the Prohibition of Chemical Weapons did as much as anyone outside the official United Nations mission and the British House of Commons to thwart the growing D.C. Beltway conventional wisdom consensus to expand a disastrous civil war in Syria with misguided at best intervention by the Great Powers of Britain, France, and the United States that would surely have resulted in humanitarian catastrophe for the Syrian population (but who gives a damn about brown people anyway) and quite possibly ignominious defeat (Iraq was such a success and arming Al-Queda and Taliban mujahideen with MPADS is so clearly a good idea) or a wider Mideast (hear that Saudis?) or perhaps even global thermonuclear war (the Russians and Chinese don’t play tiddly winks).

At 120+ I’m old enough to remember what it’s like to live in the over pressure confluence of New York and Boston and the casualties make 9-11 look like a bathroom slip and fall (which incidently do kill more people every year than all terrorist incidents since and including the attack on the World Trade Center).

We have the sense of proportion of a Fairy Cake.  I’m so (not) sorry you couldn’t get your next war on you NeoCon Nazis.

Alan Greenspan is the most thoroughly discredited economist in the world.

Humans Can Be Irrational, and Other Economic Insights

By BINYAMIN APPELBAUM, The New York Times

Published: October 20, 2013

Accounts of the financial crisis, in particular, have assumed the character of Mr. Potato Head kits. There is a box of standard explanations, and each writer picks the ones he finds most appealing. Mr. Greenspan’s Potato Head is made up of predictable parts: He blames the government for encouraging subprime lending but absolves the Federal Reserve’s policy of low interest rates.

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In this new book, Mr. Greenspan writes that the crisis could have been entirely prevented by stricter capital standards, which would have limited the unstable reliance of financial institutions on borrowed money. But he does not explain that under his leadership, the Fed played the lead role in creating rules that let banks set their own capital levels, with predictable results.

“The marked increase in risk taking of a decade ago could have been guarded against wholly by increased capital,” he writes. “Regrettably, that did not occur, and the accompanying dangers were not fully appreciated, even in the commercial banking sector.”

The most provocative part of the book is Mr. Greenspan’s assertion that government spending on Social Security, Medicare and other entitlement programs is the reason that the American economy has grown more slowly in recent decades. He writes that taxation of upper-income households is reducing their ability to invest in new ideas and new machines and new buildings. Less investment yields less innovation, slower growth in productivity and less economic growth.

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Yet it is not obvious that the American economy has been suffering from a lack of financing. While Americans saved less, the rest of the world was only too happy to shovel money into the United States. Mr. Greenspan in this same book subscribes to the view that the housing crash was caused in part by an overabundance of foreign investment in the American economy.

Furthermore, taxation cannot be the reason Americans are saving less. The New York Times reported last year that most Americans in 2010 paid a smaller share of income in taxes than households with the same inflation-adjusted incomes paid in 1980. Mr. Greenspan notes that the wealthy are paying more in taxes – but that is only true because they are making more money. Households earning more than $200,000 saw the largest decline in taxation as a share of income.

It’s also worth noting that productivity and growth have sagged most dramatically since President George W. Bush cut taxes in 2001.

Suit Revives Goldman Conflict Issue

By SUSANNE CRAIG and JESSICA SILVER-GREENBERG, The New York Times

October 10, 2013, 2:43 pm

At a March 2012 meeting, a group of examiners at the Federal Reserve Bank of New York agreed that Goldman Sachs had inadequate procedures to guard against conflicts of interest – guidelines aimed at stopping firms from putting their pursuit of profit ahead of their clients’ best interests.

The examiners voted to downgrade a confidential rating assigned by the New York Fed that could have spurred costly enforcement actions and other regulatory penalties. It is not known whether the vote in fact led to a rating change. The former examiner who pushed for a downgrade, Carmen M. Segarra, now contends in a lawsuit filed on Thursday that just weeks after the vote, her superiors asked her to change her findings on Goldman and fired her after she refused.

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After Ms. Segarra joined the New York Fed, she said she examined several potentially controversial Goldman deals. For instance, in 2012 Goldman advised El Paso, an energy company, on its decision to sell itself to Kinder Morgan. Goldman owned a big stake in Kinder Morgan, which angered a number of El Paso shareholders, who argued this gave Goldman an incentive to undervalue El Paso. Goldman maintained that it had properly managed the conflicts but was later admonished by a judge, who noted the “disturbing behavior” that led to the deal.

As the deal was coming together, the lawsuit said, Ms. Segarra urged Goldman to provide her with its firmwide conflict-of-interest policy. But Goldman, the lawsuit said, told her that it had no such policy.

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Such concerns, the lawsuit said, prompted Ms. Segarra to raise the issue with Mr. Silva, her boss, in a meeting in early December 2011. He seemed to agree. Mr. Silva “expressed concern that Goldman would suffer significant financial harm if consumers and clients learned the extent of Goldman’s noncompliance with the rules on conflict of interest,” according to the lawsuit.

Soon, though, Ms. Segarra was looking at another deal, involving Banco Santander, the largest bank in Spain, and Qatar Holding. As part of her review, Ms. Segarra asked Goldman to provide documentation that it had performed an anti-money-laundering analysis.

According to the lawsuit, Goldman executives told Ms. Segarra that it had done the analysis, but the bank later backpedaled, admitting that no such work had been performed.

Ms. Segarra took her concerns about the transaction to her bosses, who confronted Goldman. She contends that Michael S. Koh, another senior staff member at the New York Fed and a defendant in the lawsuit, told her that Goldman admitted to the misconduct but then he dismissed her concerns. Further efforts to raise the issue were also stymied and her bosses prohibited her from asking Goldman more questions about the deal – a decision that prevented her from finishing her report.

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In March 2012, Ms. Segarra got her chance to voice her concerns to the New York Fed’s legal and compliance risk team. At the meeting, the group, roughly 20 people, agreed that the issues with Goldman’s conflict-of-interest procedures warranted a warning, known-as a “matter requiring attention,” or M.R.A., according to the lawsuit. As a result, the team approved a downgrade of Goldman’s annual rating from a 2, indicating satisfactory to a 3, indicating fair, according to a confidential document reviewed by The Times. The rating involving policies and procedures is one of several measurements that make up Goldman’s overall score, which is confidential.

Source Watch: Fix the Debt

Exortionist Fellow-Travelers

Paul Krugman, The New York Times

October 17, 2013, 12:04 pm

Fix the Debt didn’t just help create a climate of crisis with its fearmongering over the deficit; the fiscal scolds actively cheered GOP hostage-taking in 2011, and were still lending support to hostage tactics this time around.

Furthermore, neutrality is not an option here. If one political party attempts to defy due process and extract concessions from the other party by threatening financial and economic catastrophe, and your response is to condemn partisanship in the abstract and suggest that both sides are equally to blame, you are in effect lending cover to the hostage-takers.

In other words, Fix the Debt isn’t just ineffectual in its pursuit of a Grand Bargain, it’s an actively malign force in our politics, in effect acting as an ally of the extortionists.

Senate moving toward vote on budget deal

By BURGESS EVERETT, JAKE SHERMAN and MANU RAJU, Politico

10/16/13 9:30 AM EDT Updated: 10/16/13 2:28 PM EDT

The bill will barely scathe Obamacare and putting it on the floor will mark a huge concession by the House after sparking a prolonged government shutdown over insistence that the health care law be defunded or delayed as a condition to keep the government open. Dozens of conservatives in the House will be disappointed by the proposal.

The plan includes a proposal offered by McConnell in the 2011 debt ceiling crisis that allows Congress to disapprove of the debt ceiling increase, which means lawmakers will formally vote on whether to reject a debt ceiling increase until Feb. 7. Obama can veto that legislation if it passes. If Congress fails as expected to gather a two-thirds majority to override the veto, the debt ceiling would be raised.

The deal would also deliver back pay to furloughed federal workers, require income verification for people seeking health-insurance subsidies under the Affordable Care Act and also allow the Treasury Department to use extraordinary measures to pay the nation’s bills if Congress doesn’t raise the debt ceiling by Feb. 7.

McConnell was pushing hard to include language to give federal agencies more flexibility to implement the sequester, something Reid was objecting to Wednesday morning, sources say. Democrats argue that provision would make it harder to eliminate the sequester in the future and it was not included in the final package. A new round of sequester cuts will be enacted in January without further congressional action, mostly hitting the defense side of spending.

A Big Political and Procedural Victory for Democrats, But Not a Policy Win

By: Jon Walker, Firedog Lake

Wednesday October 16, 2013 8:19 am

After weeks of a needless shutdown the Republican party has folded. It sounds like the bill that will go before the House soon is a complete and total surrender from their original position on defunding Obamacare. There is no other way to frame it. The only “concession” they got from the actual shutdown was beefed up income verification on the exchanges. Basically, they shut down the government to ask President Obama to enforce and implement Obamacare more quickly.

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This is not though a policy win for Democrats or progressives. This is a bad bill to end a bad month. The shutdown itself did real and needless damage to the American people. The government will also be funded at sequester levels, which is terrible for the economy but something Democrats already agreed to weeks before the shutdown started.

The irony is if Republican didn’t overplay their hand they could have been celebrating a real policy win on spending levels. Instead they come away looking crazy, incompetent, and weak.

Sell outs?  Nope, bought and paid for.

Transcript

“An honest politician is one who, when he is bought, will stay bought.”- Simon Cameron (1799-1889)

The great neoliberal dream-

Will China’s Gambit to Undermine the Trans-Pacific Partnership Succeed?

Yves Smith, Naked Capitalism

Thursday, October 10, 2013

While eyes in the US have remained focused on the budget cliffhanger in Washington, in Bali, two sets of meetings were taking place. The first was the latest set of Trans-Pacific Partnership negotiations. The US, led by John Kerry (Obama was supposed to make an appearance but the budget drama kept him away) met with representatives of the 12 nations it is pressing to agree to this deliberately mis-branded “trade deal”. The reason the label is misleading is that trade is already substantially liberalized; the real point of the TPP and its cousin, the pending EU-US trade agreement, is to weaken the power of nations to regulate, which will allow multinationals to lead a race to the bottom on product and environmental safety.

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he second meeting in Bali this week was for Asia-Pacific Economic Cooperation (APEC). And the two intersected in intriguing ways. Remember, the terms of the TPP are shrouded in secrecy that is utterly inconsistent with the notion of democratic rule. Draft chapters have not been released. In the US, the US Trade Representative has given briefings on the general terms of the pact’s chapters, but as anyone who has worked on contracts or legislation, reading the detailed terms is critical to understanding an agreement, and those are being kept firmly secret.

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Not only has the US been pushing remarkably hard on the secrecy front, it’s being remarkably aggressive on timing. It got a commitment from the prospective signatories in Bali for the pact to be finalized by year end, when a State Department briefing immediately afterward met with skeptical questions (if you have time, you really should read the session in full. The obstinacy and disingenuousness of the State Department mouthpiece is way too obvious).

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In fairness, the Forbes article points out that one set of issues that was seen as a major stumbling block for Japan, that of five types of agricultural products it wanted held out of the deal, may not be such a problem after all because the Japanese Prime Minister Abe, who talked up the deal this week, looks to be able to play the sellout of domestic farmers so as to disadvantage an LDP rival.

However, the US has been ruffling the potential signatories.

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And the State Department Q&A also indicated that Indonesia, which was also hosting the APEC leaders’ meeting, had the US trying to upstage that session.

Now bruised official egos are likely not enough in and of themselves to derail a trade deal. But the Asian nations are also playing a careful balancing act between the current hegemon, the US, and its presumed successor, at least in the region, if not globally, China. Now remember, the whole point of the TPP is that it is an “everybody but China” deal. So what did China do at the APEC summit when Obama was detained in Washington? Step up its efforts to undermine the TPP.

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It’s not clear that China’s efforts to throw sand in the TPP gears will work. But the year end timetable looks like a bizarre Administration fantasy (why push for an empty commitment to a deadline that clearly can’t be met?). And the parallel ASEAN trade talks could give countries that wanted to drag their feet on the TPP an excuse to do so (note that one country being reluctant is likely to be insufficient to derail the deal, but two or three could change the equation. Reporters in the State Department briefing were making comparisons to the failed Doha round).

A final factor that could work against the TPP is a continuation of a destabilizing budget battle. As we’ll discuss in our accompanying post today, there was progress of sorts Wednesday, in at least the two sides have agreed to talk. But they aren’t even at the stage of discussing terms, beyond a vague idea of putting the debt ceiling on hold while the two parties work out a bigger budget deal, with deficit cutting measures included. The problem is given the failure to reach a Grand Bargain Great Betrayal last year, I don’t see why there is any reason to believe a six week delay will pave the way for a deal coming together, given the increased hostility between the two camps and the hard core Republican right insisting on throwing Obamacare into the talks. The longer Washington is in disarray, the weaker its position in pushing for a trade deal. As we’ve said before, that may be the one silver lining of the damaging Federal shutdown.

(Yves is running a fundraiser and while things are going well she would certainly appreciate a token of your support.  ek)

Don’t worry, I got this.

Obama’s Credibility Problem

By: Jon Walker, Firedog Lake

Wednesday October 9, 2013 10:38 am

During health care reform, instead of saying he actively opposed the public option and direct drug price negotiations because he cut a deal with the drug lobby, Obama tried to pretend these were in fact big concessions to Republicans. This ended up causing Obama to waste months trying to get any Republicans on board to make this excuse work. When no Republicans agreed to go along Obama ended up look like a terrible negotiator for still giving up “big concessions” – without getting any votes.

When the Bush tax cut deal was reached, Obama again thought it would be clever to needlessly “fold” and only accept an tax on incomes over $400,000. In reality what Obama has always wanted most was a grand bargain. If he fought harder and got a full repeal on the Bush tax cuts for the rich, there would probably be nothing for congressional Democrats to get from a grand bargain. That would have ended up being a long term “lose” from Obama’s perspective. So he chose to look weak and leave some revenue on the table. That way there could be something he could “get” from Republican in his next grand bargain push.

During the last debt ceiling fight Obama thought a fake crisis would cause all sides to agree to a grand bargain so Obama pretended to be weak. He invited this Republican hostage taking tactic by saying he was open to negotiations. Now Republicans think he is weak on the debt ceiling, instead of realizing he was just trying to play everyone the last time.

After watching Obama constantly feigning weakness to do things to justify pursuing policies he know his Democratic base would oppose, I find it funny that no one in Washington ever knows when Obama is being sincere. So when Obama finally actually takes a firm position Republicans don’t trust him. Rep. Paul Ryan straight up said, “no one believes that.”

You know, human nature hasn’t changed much in 2,500 years.

There once was a shepherd boy who was bored as he sat on the hillside watching the village sheep. To amuse himself he took a great breath and sang out, “Wolf! Wolf! The Wolf is chasing the sheep!”

The villagers came running up the hill to help the boy drive the wolf away. But when they arrived at the top of the hill, they found no wolf. The boy laughed at the sight of their angry faces.

“Don’t cry ‘wolf’, shepherd boy,” said the villagers, “when there’s no wolf!” They went grumbling back down the hill.

Later, the boy sang out again, “Wolf! Wolf! The wolf is chasing the sheep!” To his naughty delight, he watched the villagers run up the hill to help him drive the wolf away.

When the villagers saw no wolf they sternly said, “Save your frightened song for when there is really something wrong! Don’t cry ‘wolf’ when there is NO wolf!”

But the boy just grinned and watched them go grumbling down the hill once more.

Later, he saw a REAL wolf prowling about his flock. Alarmed, he leaped to his feet and sang out as loudly as he could, “Wolf! Wolf!”

But the villagers thought he was trying to fool them again, and so they didn’t come.

At sunset, everyone wondered why the shepherd boy hadn’t returned to the village with their sheep. They went up the hill to find the boy. They found him weeping.

“There really was a wolf here! The flock has scattered! I cried out, “Wolf!” Why didn’t you come?”

An old man tried to comfort the boy as they walked back to the village.

“We’ll help you look for the lost sheep in the morning,” he said, putting his arm around the youth, “Nobody believes a liar…even when he is telling the truth!”