Month: June 2011

Privatizing Infrastructure

by digby

Matt Stoller wrote a very thought provoking essay in Politico yesterday about the infrastructure question, arguing that not only have we given up on public infrastructure but that we’re now in the process of privatizing the crumbling remains of what we already have. (I think I was first struck by this when I saw the baseball parks, our national pastime, being “licensed” for use by brand names — the most infamous being, of course, Enron Field.) But according to Stoller, this is happening in a much more systematic way than anyone realizes and it’s reflective of the greater underlying philosophical shift of what he calls the Reagan-Volcker era of “low taxes, low regulations, low pay, low spending and high finance.” It’s interesting stuff.

There may be a sort of light at the end of the tunnel, however. He concludes with this:

Ultimately, of course, we will have no choice but to rebuild our infrastructure or risk social collapse. It’s not just the disintegrating bridges and extreme weather. Recent global supply chain disruptions suggest that certain parts of corporate America may turn toward a pro-infrastructure posture out of self-interest.

I’m not sure exactly what he’s referring to specifically but at this point I’m guessing self-interest is all we’ve got. Civic pride, even nationalism, are no longer operative among the global financial elites. They just don’t care.

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Zombies

by digby

I think Hannity forgot to read the official GOP Social Security and Medicare memo:

HANNITY: Well what – what do you think’s happened, because it seems that the country is torn in two places, because people like, “It’s a right to have health care.” No it’s not a constitutional right to have health care. How did we survive all those years without Obamacare? Did people want retirement but now old people have to work longer? And young people can’t even get into the marketplace to get a job.

STOSSEL: Well these retirement plans were built, Social Security, when most people didn’t even live to age 65. And now look, we’ve been promised this, it’s reasonable, the people who are on Medicare who get angry at me when I say this, they say “I put in for this my whole life. It was deducted from my paycheck.” But they’re not aware that they’re getting back about 3 times as much on average as they put in. And it’s not going to work.

HANNITY: You know, everybody that I’ve talked to in Washington, I said alright, my working life started at twelve when I was scrubbing pots and pans in the Norwood Inn in West Hempstead, Long Island and tending bar and waiting tables and hanging wallpaper, painting and laying tile and building houses and reconstruction, I did all that, all these years, and I paid into Social Security my entire life, John, and you know, now because I’ve been, I’ve tried, I’ve saved some money, I want my money back. I – because they promised that it was going to be there, and now I’m told we’re going to means test it and we’re also going to raise the retirement age so probably like three days before I die I’ll get five cents back.

STOSSEL: Tough, deal with it. We have to means test it, we have to raise the retirement age.

HANNITY: So the government is going to legally – think about this though. The government is going to legally steal people’s money.

STOSSEL: They legally steal people’s money all the time. And –

HANNITY: Does that make it right?

STOSSEL: No, it is wrong, but the only practical measure is to raise the retirement age. I mean, means – give you your money back until you get back what you paid in, and then those of us that are wealthy, we can afford to pay people who, who won’t have.

HANNITY: I believe in a safety net.

I’m sure he believes that the net will be much safer if only we can give people a “choice” as to whether they want to live or die, but still, not bad. Now Stossel, on the other hand, is just a typical crude libertarian fatuous jackass who has no idea what he’s talking about. I’d love to see the mechanism by which Randroids like him, who consider selfishness the highest human virtue, would give everyone back the exact amount they paid in and then have the wealthy subsidize those who run out of money.

But I do have to give credit to the financial industry for the huge success of their “life expectancy” lie about the Social Security administration’s allegedly creating a diabolical plan for people to pay into but die before they ever received a penny. I know it’s the type of thing Republicans would do, but it didn’t happen. I know a lot of people feel it was the dark ages, but back in the 1930s they were advanced enough to build Hoover Dam and airplanes so they also understood that the 63 year life expectancy of the time was based upon high childhood mortality. It was always known that the vast majority of those who paid in would live to collect.

This is a terrible zombie lie and I don’t know what it’s going to take to kill it. At this point I’m afraid it’s going to kill Social Security.

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Hope I get old before I get sick

by digby

Krugman:

So Joe Lieberman is proposing that we raise the Medicare eligibility age. That’s a truly cruel idea; as it happens, I know several people who are hanging on, postponing needed medical care, hoping that they can make it to 65 before something terrible happens. And if I know such people in my fairly sheltered social circles, just imagine how widespread such stories must be.

There are a ton of people like that and with this job market there are likely to be a whole lot more to come. If you lose your job, you lose your insurance and if you lose your insurance over the age of 55 it’s very expensive to buy it. Now, the new health care plan will eventually end things like denial for pre-existing conditions and rescission, but it’s not going to help with those expensive premiums for quite some time (if ever.) And people over 55 tend to start having some health problems which make those premiums more expensive.

Like Krugman I know quite a few who are hanging on for dear life and just hoping against hope that whatever’s wrong with them doesn’t kill them before they get a new job or qualify for Medicare. Raising the age makes no sense at all. In this economy with the system in flux it should be lowered to age 55 — a position, by the way, that Joe Lieberman used to have (until he agreed that sticking it to the hippies in the health care debate was more important):

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Going around in circles

by digby

Since it’s clear that this economic problem is a demand problem (likely exacerbated by the non-stop deficit scare mongering of both parties)the administration should probably push a tax cut right now since it’s the only kind of stimulus he’s likely to be able to get. It hasn’t worked all that well up to now, but then again, people may have paid down their debt sufficiently by this time that they are willing to go out and buy a big ticket item they’ve been putting off now. I guess it’s worth a try.

But why does it have to be the payroll tax, which will play right into the hands of the safety net shredders? Why not just push through a traditional federal income tax cut for middle and lower income people to go spend?

Social Security Works has this to say:

White House advisors are reportedly considering relieving employers from their obligation to contribute to Social Security. This proposal, if enacted, would eliminate billions of dollars of revenue dedicated to Social Security at a time when some members of Congress argue that Social Security’s benefits should be cut because the program may have insufficient revenue after 2036.

Nancy Altman, Co-Director of Social Security Works issued the following statement on the Administration’s idea:

“That the White House would even consider cutting Social Security’s funding is enormously alarming. It indicates that the White House does not take seriously the dedicated nature of worker and employer contributions to Social Security. Those contributions belong to American workers and their families. Social Security should not be treated as a piggybank or raided by politicians in Washington.

“The supposed reason for the proposal is to further stimulate the economy, but there are a number of more efficient and effective ways to do so. Those other measures would boost the economy more without giving ammunition to those who want to cut or even privatize Social Security.

“Even if the lost income were made up from general revenue, great harm would be done. If the proposal became law, those arguing to cut Social Security’s benefits would then point out that Social Security has a huge shortfall and is contributing to the deficit, and so must be cut.

Social Security provides vital economic security to millions of seniors, women, people with disabilities, children, families of soldiers killed in Iraq and Afghanistan, and others. The government should do all it can to spur job growth, but not at the expense of Social Security.”

Oh sure, they say that they will “replace” the dedicated payroll tax money from general funds. The same general fund everyone is bleating about ruthlessly cutting to the bone. Trust ’em?

That they’re contemplating cutting the employer portion is also mystifying. Companies are already sitting on cash and aren’t hiring. Giving them more cash is likely to do nothing more than make those cash rserves larger. They aren’t hiring because they don’t need the help. And that’s because customers aren’t buying.

Although the policy goals of all this are quite clear, I’m no longer able to discern a coherent political strategy. They probably want to be able to make the argument again that they are the greatest spending cutters in history, thus giving the confidence fairy a goose and convincing all those Independents that they are … Republicans? I don’t know. It appears to still be “give the bankers what they want and cross your fingers.” I guess they don’t buy the aphorism that insanity is doing the same thing over and over and expecting a different result.

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But They’re What Make This Country Great

by digby

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Mitt’s Business

by digby

This segment about Mitt’s business background is, as Kombiz at Americablog says,this is Colbert at his best:

Howie wrote about his experience with Mitt’s company Bain Capital here. I also had an experience working for a company they bought with the idea of re-branding and then taking public for a quick buck. The story was pretty much the same — massive layoffs, shallow upgrades designed solely for the roadshow, total disinterest in the actual work of the company. Let’s just say it didn’t go well.

However, if the Rentiers are determined to destroy the world’s middle class, he would be their perfect guy.

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Sarah Palin’s post-modern political con game seems to be catching on. Other famous unelectable politicians have discovered that they can pretend to run for president and collect large sums of money in the process. (When you need to make payments on your Tiffany’s account, you need a lot of money.) It’s a fabulous new career for professional grifters and has-been politicians alike.

The problem for Newtie is that you really need to come up with something better than this:

“Let me just say that there is a fundamental strategic difference between the traditional consulting community, and the kind of campaign I want to run.”

To be successful as a political grifter you have to develop the ability to speak in tongues:

“Let’s be encouraged with a sense of poetic justice by knowing that the “mainstream” media isn’t mainstream anymore. That’s why I call it “lamestream,” and the LSM is becoming quite irrelevant, as it is no longer the sole gatekeeper of information.”

On the other hand, he may be rolling out grifter 2.0:

That’s its own kind of word salad, but I’m not sure it’s quite obscure and baffling enough for the Tea Party. He’s got some work to do.

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The two deficits and the Rentiers

by digby

If you are finding yourself confused by the administration’s economic arguments, this post by Mike Konzcal homes in on why: the original “deficit” argument has morphed into a new deficit argument, even though they are using the same language to describe it. This is just the conclusion — I urge you to read the whole thing:

The idea of the first “two deficits” approach is predicated on not upsetting the bond markets while the administration tries to get to full employment, because upsetting the bond market could put us right back at square one. If confidence drops while increasing aggregate demand the stimulative effort will be compromised. We need to keep confidence in check.

This new idea is that making the bond market happy in-and-of-itself will produce prosperity and full employment through increasing confidence. The major drag on the economy isn’t low aggregate demand but confidence. Now the assumption isn’t that we have to keep the bond markets as happy as they were but instead make them much happier, which will then increase investments and spending through this increase in confidence. Hence long-term spending cuts, lots of gimmies to incumbents in supply-side investments and other things powerful interests love but don’t necessarily make demand-based economic sense.

I simply don’t see any evidence of why, or even how, this would work. What are the arguments that confidence is the major check on the economy? I understood the “two deficit” argument (though I disagreed with it), but this new approach is just substituting in the interests of bondholders for the entire economy. If a very-polite version of expansion austerity is guiding the administration’s thought then this is even more of a disaster than these stories convey.

And this is where the administration’s “keep the financial markets going and confident at all costs” approach to the financial crisis, ranging from PPIP to not investigating mortgage-servicing fraud, takes over for general economic policy. And that original approach was pioneered by Geithner, who is now apparently running the economic show.

Krugman’s piece today speaks to how this plays out and it’s not pretty:

What lies behind this trans-Atlantic policy paralysis? I’m increasingly convinced that it’s a response to interest-group pressure. Consciously or not, policy makers are catering almost exclusively to the interests of rentiers — those who derive lots of income from assets, who lent large sums of money in the past, often unwisely, but are now being protected from loss at everyone else’s expense.

[…]

Ask for a coherent theory behind the abandonment of the unemployed and you won’t get an answer. Instead, members of the Pain Caucus seem to be making it up as they go along, inventing ever-changing rationales for their never-changing policy prescriptions.

While the ostensible reasons for inflicting pain keep changing, however, the policy prescriptions of the Pain Caucus all have one thing in common: They protect the interests of creditors, no matter the cost. Deficit spending could put the unemployed to work — but it might hurt the interests of existing bondholders. More aggressive action by the Fed could help boost us out of this slump — in fact, even Republican economists have argued that a bit of inflation might be exactly what the doctor ordered — but deflation, not inflation, serves the interests of creditors. And, of course, there’s fierce opposition to anything smacking of debt relief.

Who are these creditors I’m talking about? Not hard-working, thrifty small business owners and workers, although it serves the interests of the big players to pretend that it’s all about protecting little guys who play by the rules. The reality is that both small businesses and workers are hurt far more by the weak economy than they would be by, say, modest inflation that helps promote recovery.

No, the only real beneficiaries of Pain Caucus policies (aside from the Chinese government) are the rentiers: bankers and wealthy individuals with lots of bonds in their portfolios.

This is also known as rule by “fucking bond traders.” Plus ça change …

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Mittstah Soljah

by digby

This looks to me like Romney’s version of a Sistah Soljah moment:

It seemed like a straightforward question on a second-tier issue: Would Mitt Romney disavow the science behind global warming?

The putative Republican presidential front-runner, eager to prove his conservative bona fides, could easily have said what he knew many in his party’s base wanted to hear.

Instead, the former Massachusetts governor stuck to the position he has held for many years — that he believes the world is getting warmer and that humans are contributing to that pattern.

Romney’s answer to the question about climate change last Friday during his first town hall meeting since announcing his second presidential campaign allowed him to demonstrate what he hopes voters will see as a new and improved candidate — an authentic leader with core convictions.
[…]
So far, Romney’s reviews from the right are not positive. His views about climate change in particular put him at odds with many in his party’s base.

“Bye-bye, nomination,” Rush Limbaugh said Tuesday on his radio talk show after playing a clip of Romney’s climate remark. “Another one down. We’re in the midst here of discovering that this is all a hoax. The last year has established that the whole premise of man-made global warming is a hoax, and we still have presidential candidates that want to buy into it.”

Then came the Club for Growth, which issued a white paper criticizing Romney. “Governor Romney’s regulatory record as governor contains some flaws,” the report said, “including a significant one — his support of ‘global warming’ policies.”

And Conservatives4Palin.com, a blog run by some of former Alaska governor Sarah Palin’s more active supporters, posted an item charging that Romney is “simpatico” with President Obama after he “totally bought into the man-made global warming hoax.”

You can’t do a Sistah-Soljah moment on the right. They don’t care if your convictions are authentic. Indeed, they really prefer if they aren’t — there’s more power in being able to force a politician to pander, after all. No, the only thing that matters to them is ideological conformity and pissing off liberals (and not necessarily in that order.)

But then, I doubt that Mitt did this for them. I suspect he’s looking ahead and trying to maintain some sort of “moderate” beachhead for the general election and decided that he’s take his stand on climate change. After all, he hasn’t agreed to do anything about it. He’s just acknowledging that it exists.

Also remember that Limbaugh and the boys tried to tank McCain in the primaries too. I’m guessing Mitt figures he can get past them too.

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Newtie’s nine lives

by digby

If Newt Gingrich really has been run out of the presidential race because he dissed Paul Ryan’s “throw grandma from the train” wreck, my faith in karma and poetic justice have been renewed. No one on the planet deserves to be hoist by his own petard more than Newtie.

But don’t worry. He’ll be back. He was after all, finally forced to resign from the House after surviving at least one coup attempt by his own leadership team. He was next seen at the GOP convention giving an afternoon speech introducing the American Beach Volleyball team.

The next time we saw him he was advising the US Military in the wake of 9/11:

March 25th 2003

The universe of ousted House Speaker Newt Gingrich continues to expand. Not only is he giving advice to war planners at Central Command, but he’s also suggesting policy strategies to the White House and offering lines for Bush speeches.

The man’s a survivor.

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