Death Knell for America

Here are the opening paragraphs of a very good article by Nobel Prize-winning economics Joseph Stiglitz:

The year 2011 will be remembered as the time when many ever-optimistic Americans began to give up hope. President John F. Kennedy once said that a rising tide lifts all boats. But now, in the receding tide, Americans are beginning to see not only that those with taller masts had been lifted far higher, but also that many of the smaller boats had been dashed to pieces in their wake.

In that brief moment when the rising tide was indeed rising, millions of people believed that they might have a fair chance of realizing the “American Dream.” Now those dreams, too, are receding. By 2011, the savings of those who had lost their jobs in 2008 or 2009 had been spent. Unemployment checks had run out. Headlines announcing new hiring – still not enough to keep pace with the number of those who would normally have entered the labor force – meant little to the 50 year olds with little hope of ever holding a job again.

This article goes on to spell out the dangers and horrors to be expected in 2012.

Here is his vision of the future:

Even before the crisis, there was a rebalancing of economic power – in fact, a correction of a 200-year historical anomaly, in which Asia’s share of global GDP fell from nearly 50% to, at one point, below 10%. The pragmatic commitment to growth that one sees in Asia and other emerging markets today stands in contrast to the West’s misguided policies, which, driven by a combination of ideology and vested interests, almost seem to reflect a commitment not to grow.

Tragic.

Slaying the Same Dragon Again and Again and Again

Here is poor Paul Krugman dealing with a zombie myth of the political right in America: that Obama has "expanded government":

... what I’m seeing in comments and reactions, once again, is the claim that Obama has presided over a vast expansion of government — a claim backed not by describing any specific programs, but by pointing to the share of federal spending in GDP. Indeed, federal spending rose from 19.6% of GDP in 2007 to 23.8% in 2010 (it was briefly 25 in 2009, but that was a number distorted by the financial bailouts). So there has been a roughly 4 points of GDP rise in the spending share. What’s that about?

Well, part of the answer is that the ratio is up because the denominator is down. According to CBO estimates, in fiscal 2010 the economy operated about 7 percent below potential. This means that even if what the government was doing hadn’t changed, the federal spending share of GDP would have risen by 1.4 percentage points.

Then, look inside the budget data (pdf), specifically at Table E-10. You’ll see a surge in spending on “income security”; that’s basically unemployment insurance, food stamps, and similar items. In other words, spending on safety-net programs is up because the economy is depressed, and more people are falling into the safety net.

You’ll also see a sharp rise in Medicaid; again, this is because the lousy economy has pushed more people into hardship, making them eligible for the program.

I’ve done a bit of number-crunching, and here’s my allocation of the sources of the rise in federal spending as a share of GDP:
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So a depressed economy plus safety net programs that have grown as a result of a depressed economy are, overwhelmingly, the real story here.

What’s in that “other” category? Some of it is stimulus spending. Some of it is the leading wave of the baby boomers, who are starting to collect Social Security and enter Medicare. Some of it is rising health care costs.

What isn’t there, no way, nohow, is a massive expansion of government, which is a figment of the right wing’s imagination.

When a political party keeps repeating a lie, it is proves a complete disregard for honesty and truth. Only the power mad would repeat a discredited view. They know that the informed will be outraged, but they count on the fact that most people eitehr haven't heard that it is a lie, forgotten that it is a lie, or don't care if it is a lie. In short, they are appealing the ignorance and cynicism of marginal people.

This is how "family values" politicians can be continually caught in affairs with prostitutes or exercising serial polygamy by marrying and divorcing wife after wife while professing a "deep respect" for the family. Or to have the gall that one Republican, Joe Walsh, has of refusing to pay his legally obligated child support while running on "family values". Or pulling the Newt Gingrich stunt of divorcing a wife dying of cancer so that he can marry a pretty young thing while claiming to "respect" family values. So much for the "until death do us part" commitment of a family values man.

Free Spending Liberals and Tight-Fisted Conservatives

Here's the real lay of the land. From a blog post by Barry Ritholtz on his The Big Picture blog:

The actual budgets of the Presidents and their deficits — that’s what this is about, right? — are as follows:

George W. Bush is sworn in on January 20th, but his first budget does not take effect until October 1, 2001:

10/1/2001: Bush starting deficit – $5.8 trillion

9/30/2009: Bush ending deficit – $11.9 trillion

Bush debt contribution: $6.1 trillion

Barack H. Obama is sworn in on January 20th, but his first budget does not take effect until October 1, 2009:

10/1/2009: Obama starting deficit – $11.9 trillion

9/30/2011: Obama ending deficit – $14.8 trillion

Obama debt contribution: $2.9 trillion

Of the $14.8 trillion in total debt as of September 30, 2011, the Bush budgets generated $6.1 trillion in deficits versus the $2.9 trillion of Obama deficits. That’s 41.2% vs 19.6% by a reasonable methodology of measuring presidential debt.

For those who don't believe the above and have seen "other numbers". Here's the explanation:

The data was assembled in the original post is not by each President’s first day in office to his last, but rather, by the budgets each President submits to Congress that gets passed. (Congress may change the budget, but rarely appropriates more than what the President requests). I cannot imagine that any fair-minded person would look at this data any other way: The debt each President creates is a function of the budgets each President submits to congress. It is not based upon the literal time they spend in office. Therefore the only objective way to view the data is BY EACH PRESIDENTS BUDGET.

This is not an insignificant point. So, rather than indulge in irrelevant measures that mislead the reader, let’s go to the actual fiscal numbers of each President’s budgets to see what there is to see.

On January 20th, 2001, George W. Bush was sworn into office – but the budget for most of the rest of that year was Bill Clinton’s, passed by the prior Congress. Barack Obama was sworn in on January 20th, 2009 – but the budget for most of that year was that of George W. Bush. Why are these so? Because the Federal government’s fiscal year runs from October 1 (of the previous calendar year) to September 30. Hence, the FY 2001 is Clinton’s and FY 2002 is Bush’s. FY2009 is Bush’s, FY 2010 is Obama’s.

If you don't go by presidential budget, but use "day of inauguration", then you get this skewed representation of reality:

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The above shows a big debt under Obama, but this is the debt committed to by Bush under a Bush budget and a Republican Congress. This wasn't Obama's budget.

You have to be very careful of your "facts". It is all too easy to pick and choose "facts" and distort reality.

Here is the honest accounting of debt under presidents using each president's budget as passed by Congress:

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America's Lost Trillions

Here's an interesting interview with an author of a book looking at the US military budget. Many issues are covered, but at 2:00 minutes into the video this bit comes up:

The Pentagon has very little accountability when it comes to its books. Since first submitting financial accounts in 1991, the Pentagon "has been unable to account for trillions of dollars, well over almost $10 trillion by my own account," says Glain. Conspiracy theorists suggest this is CIA money being laundered through the Pentagon, a claim Glain has some sympathy for.

Incredible...

More in this Yahoo! finance article.

The above is just the incompetence and deceit on military spending. The US is a crony capitalist country where many trillions have recently been lost because Wall Street has the Washington politicians in its pocket and have been allowed to trash the economy with the 2008 financial panic with the hundreds of billions in explicit "bailout" money given to it and the implicit and very quietly delivered billions given to the banks by the Federal Reserve's policies to keep interest rates low to move money from the savings accounts of ordinary Americans to the big banks.

A trillion here, a trillion there, soon you will be talking about serious money...

Hiding the Truth in Plain Sight

Here's another post by Dean Baker in his Beat the Press blog pointing out how the media "reports" facts in a way that people are "informed" but have no way of understanding what they are told. They are given numbers, but unless you are an expert, the number has no context so you really don't know what it means:

Why Can't the Post Use Percentages in Discussing Proposed Cuts to the Military?

In a relatively lengthy article discussing potential cuts to the military budget, the Post never once told readers what baseline projected spending is, nor what the cuts would be as a share of baseline spending. The Post told readers that the military had prepared for cuts of $400 billion over the next 12 years, but now it seems possible that the cuts could be as large as $800 billion.

Wow! Those are really big numbers. And no responsible newspaper would ever print them without giving its readers some context, since virtually none of them will have any ability to assign meaning to these numbers.

The baseline budget shows that the government will spend approximately $9.5 trillion on the military. (This does not count veterans benefits and some other costs associated with maintaining the Defense Department.) The $400 billion in cuts would imply a reduction in the budget of a bit more than 4 percent. If the cuts reach $800 billion then the cuts would be a bit over 8 percent of the budget.

By comparison, the Gang of Six have proposed a reduction in the cost of living adjustment for Social Security that will reduce average benefits by close to 6 percent. The largest cuts would hit the oldest beneficiaries with beneficiaries in their 90s seeing benefit reductions of close to 9.0 percent.

Baker is hinting that the media doesn't use percentages for the same reason why a magician doesn't stop and show you how he is doing his sleight of hand. They really don't want you to understand. The "news" doesn't want you to realize that these "big" cuts in the military are smaller than the cuts in social programs. This is the way you can have "transparent" government with an electorate that has no clue of what's going on. The press leaves everybody like rubes at the carnival amazed at all the hoopla and excitement but without understanding anything. But having their pockets picked by the carnies who have set up the "transparent" system.

Trimming US Military "Fat"

Nobody is talking about it, but given all the intense discussion of deficits, it is surprising that there isn't more talk about cutting military spending in the US. From a study by the Center for American Progress:

As the Obama administration and Congress try to agree on a deal to raise the debt limit—an agreement that will inevitably involve cutting some money from the budget—they should keep in mind that they can cut $100 billion in defense spending annually and still keep our military budget at the Reagan administration’s peak Cold War levels of approximately $580 billion (all numbers adjusted for inflation unless otherwise noted). Bringing the defense budget down to the levels that existed under Presidents Eisenhower, Nixon, H.W. Bush, and Clinton would require reductions of $250 billion to $300 billion annually.

The question currently facing Congress and President Barack Obama—how much to spend on defense in times of large deficits or in the final years of a war—is not new. In fact, the graph below shows that a number of presidents from both parties carried out significant reductions in the defense budget under similar circumstances since the end of World War II.

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The report identifies specific items to cut. It ends with the following hope:

Defense spending helped create the fiscal crisis facing our nation today, and defense cuts must be part of the solution. The president and Congress can continue a bipartisan tradition of restoring defense spending to sustainable, responsible levels as the United States winds down its involvement in Iraq and Afghanistan.

Since the US spends as much as the rest of the world combined on its military, there should be plenty of room for cutbacks.

Make Big Time Money and Pay No Taxes!

From Bruce Bartlett's Economix blog on the NY Times:

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Notice how 3,000 people making more than $2,178,886/year pay not taxes!

If you ever wonder why the US has a debt problem, this answers it. There are a lot of ultra-rich people -- 2.3% of them -- who pay no taxes. (What the above doesn't show is the trivial amount of taxes that the other 97.7% of those making over $2,178,886/year are paying in taxes. Thanks to the Reagan "revolution" which slashed taxes on the ultra-rich to "unleash the entrepreneurial spirit" which any American can look around as see is fully at work in a country with 14 million unemployed, a lot of people of food stamps, a lot of people about to lose their homes, etc. That Reagan "revolution" was a real success!

Seems to me the US should try another kind of revolution which taxes the rich and forces them to carry their fair share in order to make the government solvent, to allow government to provide necessary services like education, police, fire, pensions, welfare, etc.

Robert Reich's "The Truth About the Economy"

Here's his 2 minute 15 second presentation:

Political Dialog with the Deaf

The problem with trying to "debate" a political right winger in the US is that they "know" their facts and refuse to look at anything or concede anything. They have truth by the tail and that's that.

Here's a bit from Paul Krugman on his NY Times blog that exposes another "truth" of the political right which is complete fiction:

Discretionary Truthiness

I keep hearing Republicans say that Obama has increased nondefense discretionary spending by 80 percent; it’s one of those “facts” that apparently everyone on the right knows. So where does that come from?

Well, it turns out that Politifact is on the case — but gets it wrong, too, although not as wrong as the Republicans.

The number comes from taking nondefense discretionary spending as reported — which rose 26 percent from 2008 to 2010 (Table 8.7) — and then adding the entire discretionary spending part of the stimulus.

Politifact says that this is misleading because not all of the stimulus funds were spent in 2010. But it’s much worse than that: stimulus spending is already in those discretionary spending numbers. If you look at the table, you’ll see bulges in spending on education and ground transportation that go away after 2011; that’s the stimulus.

So this GOP talking point is a complete fraud; it’s based on counting the same spending several times over.

Go read the original post to get the embedded links.

There is no political dialog in the US because it is a "debate of the deaf". The political right simply refuses to look at facts and discuss what is or is not known. They are so imbued with political certitude that ideology passes for fact among these fanatics.

For those who reject the above claim, here is a post by Brad DeLong that offers a baker's dozen examples of right wing claims that are not fact-based.

• On Glenn Hubbard's claim that Obama has "ruled out long-term entitlement spending restraint"


• On Republican claims that contractionary fiscal policy is expansionary


• On Mitt Romney's claim that uncertainty about government policy hobbles the recovery


• On the OECD's claim that stimulative economic policy is "largely exhausted; therefore, we have to 'go structural'


• On Thomas Saving and John Goodman's claim that the Ryan plan has no larger Medicare cuts in it than the Affordable Care Act does


• On Irwin Stelzer's claim that investors are worried about a U.S. default


• On Michael Barone's claim that Secretary Sibelius is "waiving away the law" for Obama campaign contributors


• On Joe Nocera's claim that Democrats should not scorn Paul Ryan


• On Speaker John Boehner's claim that only Democrats have voted to cut Medicare


• On Stephen Moore's claim that "in reality" the Democrats are proposing a 62% top income tax rate


• On the Wall Street Journal's editorial claim that "the regulatory tax on Americans is now larger than the income tax"


• On Republican opposition to raising the debt ceiling: Right-leaning Clive Crook


• David Brooks on how the Republicans should destroy Medicare the next time they try

The above are just the headers, for the details, go read DeLong's post.

And DeLong offers up yet more with this post.

A Question of Philosophy?

Here is a post by Dean Baker on his Beat the Press blog that reveals what the press knows about "philosophy":

The Wall Street Journal Tells Us It's All About Philosophy

The news media keeps trying to tell us not to worry about who gets the money, the issue is one of philosophy. The WSJ picks up the task today telling readers that the difference between conservative and liberal budget plans:

"The big takeaway is this: The debate over how to reduce the deficit is truly a philosophical one about the size of government."

Is that so? The Congressional Budget Office tells us that it will cost $34 trillion (5 times the size of the projected Social Security shortfall) more to provide Medicare equivalent policies through private insurers than through the traditional government Medicare program. This would be additional money paid by taxpayers and beneficiaries to insurers and providers. Is the desire to hand this money over to these groups a question of philosophy?

Go read the original post to get the embedded links.

I should point out that the role of the media in a democracy is also a question of philosophy, but obviously these Wall Street Journal types have never bothered to study the issue. They know as much about philosophy as the average dog knows about higher mathematics. Zilch!

The Philosophy of Government, Supposedly

Here is a nice post by Dean Baker in his Beat the Press blog that ridicules the idea that the difference between the Republicans and Democrats is "just a difference in philosophy":

The Wall Street Journal Tells Us It's All About Philosophy

The news media keeps trying to tell us not to worry about who gets the money, the issue is one of philosophy. The WSJ picks up the task today telling readers that the difference between conservative and liberal budget plans:

"The big takeaway is this: The debate over how to reduce the deficit is truly a philosophical one about the size of government."

Is that so? The Congressional Budget Office tells us that it will cost $34 trillion (5 times the size of the projected Social Security shortfall) more to provide Medicare equivalent policies through private insurers than through the traditional government Medicare program. This would be additional money paid by taxpayers and beneficiaries to insurers and providers. Is the desire to hand this money over to these groups a question of philosophy?

Go read the original post to get the embedded links.

I suppose that whether you are a billionaire or a beggar is just "philosophical". One obviously interested in "higher things" (like bigger numbers) while the other can't get his mind out of the gutter (or the cardboard box in which he resides). Yes, it is all "just philosophy".

Putting Tornadoes into Perspective

From a summary of data by Anthony Watts on his blog Watts Up With That?. These numbers help show that these are not "off the chart" events. They are part of a long history of devastating storms:

Deadliest Tornado Years in US History

(Official NOAA-NWS Record: 1950 – present; Research by Grazulis: 1875-1949)

Year Fatalities
1925 794
1936 552
1917 551
1927 540
1896 537
1953 519
1920 499
1908 477
2011 481 (365 + 116 estimated Joplin fatalities as of May 23)
1909 404
1932 394
1942 384
1924 376
1974 366

Deadliest Single Tornadoes in NOAA-NWS Official Record

(1950 – present)

Tornado	Fatalities	Date
Flint, Michigan	116	June 8, 1953
Joplin, Missouri	116 (est.)	May 22, 2011
Waco, Texas	114	May 11, 1953
Worcester, Massachusetts	90	June 9, 1953
Udall, Kansas	80	May 25, 1955
Hackleburg, Alabama	78	April 27, 2011
Tuscaloosa-Birmingham, Alabama	61	April 27, 2011
“Candlestick Park,” Mississippi & Alabama	58	March 3, 1966
Cary, Mississippi	58	February 21, 1971
Judsonia, Arkansas	50	February 21, 1952

The main reason why storms have bigger tolls today than 100 years ago is that the population in the US is 3 times that of 100 years ago. It isn't "global warming". It is more people in the path of a storm.

Update 2011may24: Here is a good post by Roy Spencer that corrects some misperceptions about the trend in tornadoes. The key bit:

The bottom panel of following graphic shows what most meteorologists already know: there has been a downward trend in strong (F3) to violent (F5) tornadoes in the U.S. since statistics began in the 1950s. As seen in the top panel, this has also been a period of general warming. For those statistics buffs, the correlation coefficient is -0.31. Obviously, the conclusion should be that warming causes fewer strong tornadoes, not more. (Or, maybe a lack of tornadoes causes global warming!)

Go read the post to see the data graphed that shows this trend.

Injecting Sanity in the Debt and Deficit Debate

Dean Baker in a post on his Beat the Press blog tries to inject some facts into the braying hysteria over debts and deficits in Washington:

Given the deficit obsession of the Washington media it is remarkable that none of the reporters covering Federal Reserve Board Chairman Ben Bernanke's press conference noted the fact that he offered little help on dealing with the budget deficit. There were two obvious steps that he could have taken.

First, the main reason that the deficit has soared in the last few years is that the economy collapsed following the bursting of the housing bubble, which Bernanke apparently failed to see. (We are a very forgiving lot in Washington.) If the unemployment rate was brought down quickly by more aggressive monetary policy, then the deficit could be reduced by an enormous amount.

In 1996, the Congressional Budget Office (CBO) projected a deficit of almost $250 billion (@ 2.6 percent of GDP) for the 2000 fiscal year. The country actually had a budget surplus of almost the same size in fiscal 2000, representing a shift from deficit to surplus in the year 2000 of more than 5 percentage points of GDP.

Congress did not approve any major tax increases in this 4-year period, nor were there any major unscheduled cuts to spending. Rather this shift from deficit to surplus of more than 5 percentage points of GDP ($750 billion in today's economy) was attributable almost entirely to better than expected economic performance.

In 1996 CBO projected that the unemployment rate would be 6.0 percent in 2000. Unemployment actually averaged just 4.0 percent. This was due to the fact that Alan Greenspan ignored the overwhelming consensus in the economics profession and allowed the unemployment rate to fall below the conventionally accepted levels of the NAIRU.

This decision, which was made over the objections of the Clinton appointees to the Fed, allowed millions of more people to get jobs than would have otherwise been the case. It also allowed strong wage growth for people at the middle and bottom of the wage distribution as their labor was then in demand. And it reduced the budget deficit. Because Bernanke offered little hope of more aggressive Fed actions to reduce unemployment, he is not offering any similar growth dividend on the budget deficit.

The other potential help that Bernanke is not offering is holding large amounts of government debt. The Fed now holds close to $3 trillion in government debt and other assets. If it continued to hold this debt throughout the decade, rather than selling it back to the private sector, it would reduce interest payments by close to $1.5 trillion over the course of the decade. It could deal with any inflationary pressures resulting from these holdings by simply raising reserve requirements. Bernanke is not offering this help either.

It would have been useful to readers to point out what the Fed is not doing to help address the deficit.

I appreciate Baker's effort. But the fanatics in Washington aren't listening to him. Instead, the usual nabobs of negativity on the right hold centre stage.

Sadly Obama listened to the "insiders" who helped create the financial crisis instead of those who had clean hands. But Obama felt "obligated" to listen to his Wall Street advisors since they were his biggest campaign financers. Who says money can't buy happiness?

Oh... and while we are on hanky-panky, lies, and political skullduggery, here's another post by Baker that merits attention:

Business reporters seem to have very bad memories. All of the media accounts of Federal Reserve Board Chairman's first press conference touted his commitment to Fed transparency.

These reporters are apparently too young to remember that the Fed strongly resisted giving out any information about the trillions of dollars of below market loans that it disbursed at the peak of the financial crisis. It only released this information when a coalition of conservative and progressive members of Congress, led by Ron Paul and Bernie Sanders, attached a provision requiring the release to the Dodd-Frank bill. Bernanke had claimed that releasing the information would jeopardize the stability of the financial system.

Bernanke also went to court to block the release of information about discount window borrowing from the Fed. He only gave up and released the requested data after all his legal options were exhausted. The description of Bernanke as unquestioned advocate of increased Fed transparency is wrong.

Funny how the media falls over itself to report sexual infidelity but doesn't find lies and deception by the head of the Federal Reserve worthy of any column inches.

Picture the US Deficit

From James Fallows' blog at The Atlantic, as they say... a picture is worth a thousand words:

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Why does this chart matter? Because it makes clear, in that wonderful "worth 1,000 words" way, two realities that are fundamental to sane discussion of public finance, but that most of the public doesn't realize and that the Republican leadership is actively working to obscure. They are:

- The very large, but temporary and self-limiting, expenditures for TARP and other measures proposed by both the Bush and Obama administrations to avoid a second Great Depression, plus Obama stimulus spending. And;

- The very large, but permanent and worsening, budgetary impact of the "Bush tax cuts" -- which when first proposed back in the pre-9/11 era, were supposed to end in 2010 and were in response to what back then seemed to be the "problem" of a burgeoning surplus in federal accounts! Since "extending" those cuts just sounds like business as usual, I think it is hard for most people to envision the profound and growing effect they have. The chart above helps toward that end -- and doesn't even go into how heavily those cuts are skewed to the "haves" of society. Last year Austan Goolsbee had a marvelous chart of his own on that point.

And, as a bonus half-point, the chart clarifies that budget problems would be on the path to self-correction, if the Bush cuts had lapsed as originally planned.

Go read the whole post, and especially look at the graph showing the effect of letting the Bush tax cuts expire.

Just which of the above can be attributed to the mismanagement of Bush and the Republicans?

• War in Iraq (a war of "choice" against a non-threat) sold as the threats of "weapons of mass destruction" and supposed "cooperation" between Saddam Hussein and al Qaeda.


• Bush era tax cuts (the anti-Robin Hood policy of the Republicans: take from the poor to give to the rich)


• Recovery measures (the right wing "deregulate, deregulate, deregulate" meant that an unregulated Wall Street and the banks could run the economy off a cliff with fradulent mortgages, fradulent ratings, and the bundling of junk into AAA-rated "securitized" investments)


• Economic downturn (ditto the above)


• TARP, Fannie, and Freddie (these are all sinkholes for taxpayer money because of the ideological "deregulate, deregulate, deregulate" that drove the economy over a cliff)

So... about 80% of the deficit is inherited from Bush and the quasi-criminal policies of the political right.

Sensible Words Sadly Ignored

Here is a bit from a post by Brad Delong on his blog. He writes many words to explain why Republican political posturing is oh so wrong and gets summarized in this bit:

The economy needs budget balance in the long-run--tax increases and spending cuts, overwhelmingly in government health care programs, to be put in place in the 2020s if not starting in 2015. But for the next three years what the economy needs is for government spending to be pulled forward from the future into the present, and for taxes to be pushed back from the present into the future.

Go read the whole post to get the details.

What I can't understand is why this simple wisdom is ignored and, instead, attention is focused on political posturing that is so obviously grounded in ideology and not fact.

Five Dots from Robert Reich

This is an excellent speech about the state of the US economy and the current political situation:

David Brooks, Responsibility, and the Memory Hole

In his NY Times blog, Paul Krugman takes David Brooks for his squint-eyed view of reality. Brooks wants to blame the budget deficit on the public's "irresponsibility" and lack of "realism" while ignoring the 8 year black hole of the Bush administration, a playground for irresponsibility and lack of realism. Sadly, this kind of mental warp is all to frequent in those on the right and Brooks is just another example.

Here's how Krugman takes Brooks to task:

Whenever I read pieces like David Brooks’s column this morning — pieces that attribute our budget deficits to the public’s irresponsibility and lack of realism — I find myself wondering how so much recent history went down the memory hole.

To be fair, polling on budget questions does suggest a popular demand that we repeal the laws of arithmetic — that we not raise taxes, not cut spending on any popular program, and balance the budget.

But if we look at actual policy changes, it’s hard to see that too much democracy was the problem.

Remember, we had a budget surplus in 2000. Where did it go? The two biggest policy changes responsible for the swing into deficit were the big tax cuts of 2001 and 2003, and the war of choice in Iraq.

And neither of these policy changes was in any sense a response to public demand. Americans weren’t clamoring for a tax cut in 2000; Bush pushed his tax cuts to please his donors and his base. And the decision to invade Iraq not only wasn’t a response to public demand, Bush and co. had to spend months selling the idea to the public.

In fact, the only budget-busting measure undertaken in recent memory that was driven by popular demand as opposed to the agenda of a small number of powerful people was Medicare Part D. And even there, the plan was needlessly expensive, not because that’s the way the public wanted it — it could easily have been simply an addition to traditional Medicare — but to please the drug lobby and the anti-government ideologues.

Now, a lot of historical rewriting has taken place — I’ve even seen pundits solemnly describe the Iraq war fever as an illustration of the madness of crowds, somehow erasing the fact that it was Bush and Rumsfeld, not the masses, who wanted the thing.

But the reality is that if you want to see irresponsibility and self-indulgence at the expense of the nation’s future, you don’t want to visit Main Street; you want to hang out in the vicinity of Pennsylvania Avenue.

Brooks is a very good writer with a style that sucks you into his mind set. He never bothers to pause and question his own thinking. He never warns his reader that he is casting a spell over him. He never alludes to alternative interpretations. You end up buying into a worldview that is all Brooks all the time. Great for him, but not necessarily great for the real world, for honesty, for accountability, or for a better future for your kids.

I must admit that I have this very weakness. I can fall into the Brooks orbit. But when I read other material I get jolted out of the spell and realize that I've been sold a bill of goods yet again. People like Brooks need to have signs posted around their writing saying "objects may be closer than they appear". They need to be reminded that their is a reality distortion field around Brooks which Brooks refuses to acknowledge or give hint of.

How Bad is Bad?

If you want a picture instead of words to understand how bad the Great Recession is, then this graph from the Calculated Risk blog is the best clear and simple picture possible:

Click to Enlarge
The little dips are all the post-WWII recessions. The big dip at the bottom, the one that drags on for years and years and is so very, very deep is the 2008 Great Recession caused by Wall Street greed and three decades of right wing propaganda calling to "shrink government" and "deregulate, deregulate, deregulate". Mission accomplished. The lunatics took charge of the asylum and you got the Great Recession.

Sadly, the lunatics still haven't given back the keys. The same right wing nuts who help prepare the groundwork for this financial disaster are still selling the poisonous intellectual fare of "freshwater economics". It still has the upper hand when you look at the vicious austerity programs of the Republican dominated state legislatures and when you survey the outrageous Ryan "budget" which is more a political dictat than a budget plan which could be followed.

Inventive Legislators

Funny... you put a stake through the heart and it still rises up. Here's the Ryan plan back under another guise. From Robert Reich's blog:

If you can’t sell the pig, figure Republicans, put lipstick on it and maybe no one will notice. Add some perfume and maybe you’ll even attract enough Dems to get it enacted.

A Senate proposal by Republican Bob Corker of Tennessee and Democrat Claire McCaskill of Missouri would save $7.6 trillion over 10 years. How? By capping federal spending at 20.6 percent of gross domestic product within a decade. That’s down from 24.3 percent now.

This is the Ryan plan with lipstick. The Ryan plan puts spending at 20.25 of GDP in 10 years. By comparison, spending under Republican President Ronald Reagan from 1981-1989 averaged 22 percent of GDP at a time when no baby boomers had retired.

There's more. Go read the whole article.

I find it funny how magical thinking continues to have its hold on politicians in the US. Rather than face up to the fact that 30 years of tax reductions for the ultra-rich and corporations has bankrupted the public purse, they keep trying to come up with ways to tie their hands and live within the constraints that leave the super-rich fat & happy and the economy mired in recession and the bottom 90% paying taxes to support the rich in the lifestyle to which they have become accustomed under a series of Republican governments. Funny.

Exploring "Compromise" in Politicized Washington

Here is a bit from an excellent post by Robert Reich that worries about how Obama constantly seeks "middle ground" with his opponents and how the media reports "compromise":

How debates are framed is critical because the “center” or “middle ground” is supposedly halfway between the two extremes.

We continue to hear that the Great Budget Debate has two sides: The President and the Democrats want to cut the budget deficit mainly by increasing taxes on the rich and reducing military spending, but not by privatizing Medicare. On the other side are Paul Ryan, Republicans, and the right, who want cut the deficit by privatizing Medicare and slicing programs that benefit poorer Americans, while lowering taxes on the rich.

By this logic, the center lies just between.

Baloney.

According to the most recent Washington Post-ABC poll, 78 percent of Americans oppose cutting spending on Medicare as a way to reduce the debt, and 72 percent support raising taxes on the rich – including 68 percent of Independents and 54 percent of Republicans.

In other words, the center of America isn’t near halfway between the two sides. It’s overwhelmingly on the side of the President and the Democrats.

I’d wager if Americans also knew two-thirds of Ryan’s budget cuts come from programs serving lower and moderate-income Americans and over 70 percent of the savings fund tax cuts for the rich – meaning that it’s really just a giant transfer from the less advantaged to the super advantaged without much deficit reduction at all – far more would be against it.

And if people knew that the Ryan plan would channel hundreds of billions of their Medicare dollars into the pockets of private for-profit heath insurers, almost everyone would be against it.

The Republican plan shouldn’t be considered one side of a great debate. It shouldn’t be considered at all. Americans don’t want it.

Which is why I get worried when I hear about so-called “bipartisan” groups on Capitol Hill seeking a grand compromise, such as the Senate’s so-called “Gang of Six.”

Senator Dick Durbin, Democrat of Illinois, a member of that Gang, says they’re near agreement on a plan that will chart a “middle ground” between the House Republican budget and the plan outlined last week by the President.

Watch your wallets.

In my view, even the President doesn’t go nearly far enough in the direction most Americans would approve. All he wants to do, essentially, is end the Bush tax windfalls for the wealthy – which were designed to be ended in 2010 in any event – and close a few loopholes.

But why shouldn’t we go back to the tax rates we had thirty years ago, which required the rich to pay much higher shares of their incomes? One of the great scandals of our age is how concentrated income and wealth have become. The top 1 percent now gets twice the share of national income it took home thirty years ago.

If the super rich paid taxes at the same rates they did three decades ago, they’d contribute $350 billion more per year than they are now – amounting to trillions more over the next decade. That’s enough to ensure every young American is healthy well-educated and that the nation’s infrastructure is up to world-class standards.

There is a bit more in the original post, go read it.

Reich ends with a forlorn cry:

To think of the “center” as roughly halfway between the President’s and Paul Ryan’s proposals is to ignore what Americans need and want. For our political representatives to find a ”middle ground” between the two would be a travesty.

Sadly, the American political system has developed a well-entrenched reputation for delivering travesty after travesty. I see no reason to expect a different outcome this time.