Month: May 2012

The aristocracy of money: don’t be rude to the noble job creators

by digby

I read the hoohah over Nick Hanauer’s TED inequality speech not being distributed on the grounds that it didn’t meet their standards yesterday, but I didn’t know at the time what the real reason was. Apparently, it’s not because he was claiming that inequality is wrong, but rather that he was impolite about it.(I think the curator used the word “partisan” which is very revealing.)

In any case, what’s new today is this, from Ryan Cooper:

The above TED talk, by Richard Wilkinson, is from October 2011, and it’s all about economic inequality. There’s quite a lot of buzz today about another talk on economic inequality which was recorded, then quashed by TED officials. You can check out the full transcript here, from National Journal.

At first glance, this is quite a strange discrepancy. Both talks are on economic inequality, and they do differ a bit, but if anything the Wilkinson talk is more radical. The gist of his is that once a country has reached “developed” status, wealth doesn’t much matter for the health of that society, broadly speaking (including things like longevity, mental illness, crime, prison population, poverty, etc). Instead equality is what matters. More equal societies are better.

The censored talk, given by venture capitalist Nick Hanauer, makes a fairly banal point that starting a successful business depends entirely on having a population of people with the ability to buy your product.

The difference between the two, aside from the fact that the earlier one was much more radical and shocking, was the tone. It’s very offensive, you see, for anyone to question the morality or social conscience of the entrepreneurial “job creators.” In fact, it’s just a “partisan rehash.”

I think this little incident may be the first real proof we’ve had that it really is all about their feelings and their status as superior members of society. you can say what ever you want about income inequality — even suggest that in order to survive they should be stripped of much of their wealth. But don’t even think of suggesting that they are in any way personally culpable or that their very special function in our society is well … overstated … and they will fly into a rage.

We have created an economic nobility, about whom no ill will may be expressed. The European aristocracy had rules like that — and they believed this privilege was ordained by God. Which explains this:

Is it possible to make too much money? “Is it possible to have too much ambition? Is it possible to be too successful?” Blankfein shoots back. “I don’t want people in this firm to think that they have accomplished as much for themselves as they can and go on vacation. As the guardian of the interests of the shareholders and, by the way, for the purposes of society, I’d like them to continue to do what they are doing. I don’t want to put a cap on their ambition. It’s hard for me to argue for a cap on their compensation.”

So, it’s business as usual, then, regardless of whether it makes most people howl at the moon with rage? Goldman Sachs, this pillar of the free market, breeder of super-citizens, object of envy and awe will go on raking it in, getting richer than God? An impish grin spreads across Blankfein’s face. Call him a fat cat who mocks the public. Call him wicked. Call him what you will. He is, he says, just a banker “doing God’s work”

One must not commit blasphemy.

They ended up posting the speech today:

Update:

Yes, one simply doesn’t.

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Cokie’s Law FTW

by digby

The cable gasbags are all agog with this story this morning, calling for the smelling salts while gleefully showing footage of Jeremiah Wright on a loop.

The New York Times won the morning on Thursday with an A1 story on a new anti-Obama super-PAC, Character Matters, that’s planning on spending $10 million on an ad campaign linking President Obama—a “metrosexual, black Abraham Lincoln”—to the Rev. Jeremiah Wright. Character Matters is hoping to get either Jon Voight or an “extremely literate conservative African-American” to narrate the spots, which would be produced by GOP ad guru Fred Davis (of “Demon Sheep” fame).

The money for all of this comes from Joe Ricketts, the TD Ameritrade founder, Bison Burgers baron, and, with his family, owner of the Chicago Cubs. Ricketts solidified his status as a campaign finance heavyweight when spent $600,000 in the last month of the election to try to take down Sen. Harry Reid (D-Nev.) in 2010. Since then, he’s launched a campaign to eliminate earmarks, given $500,000 to the anti-incumbent Campaign for Primary Accountability, and, earlier this month, spent $200,000 helping state Sen. Deb Fischer win the GOP Senate primary in his home state of Nebraska. (Ricketts’ son, Peter, is a former US Senate candidate and a member of the Republican National Committee.) Ricketts is sick and tired of wasteful spending—so much so that the briefing book outlining the Wright ad is actually entitled “The Ricketts Plan to End His Spending for Good.”

I would normally be prepared to scold the media at little bit for flogging this story when the truth is that it was only a proposal and the ad hasn’t actually been made. But everyone’s just following Cokie’s Law:

“At this point,” said Roberts, “it doesn’t much matter whether she said it or not because it’s become part of the culture. I was at the beauty parlor yesterday and this was all anyone was talking about.”

If you want to get something “out there” feed it to Cokie and the gang and they’ll be happy to do it for you for free — and then tell everyone that it’s “part of the culture” so you have to talk about it. It’s a sweet scam.

Rickets and his group are true jackasses and they may very well have planned to run this ad — or at least they believe the racist message and think that the voters do too. But this is risky for a lot of reasons, and I would not at all be surprised if they are very happy this morning to have it leaked —widely — so they could disavow it. All while everyone’s showing the footage of Jeremiah Wright on a loop all day long. Like I said, it’s a sweet scam. And a cheap one.

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Austerian Pride

by digby

Yesterday I posted (twice!) a Think Progress chart proving that the government under president Obama had pursued austerity policies. It was done to refute Mitt Romney’s outright lie that the president had spent the country into oblivion, but some of us wondered why the Democrats would think it was such a good thing in any case.

Dday asked the fellow who made the chart for CAP:

I asked Linden why any progressive should look at this information with anything approaching pride or pleasure. “If your argument is that we shouldn’t be having a fiscal consolidation during a recovery, that’s a fair criticism of it,” Linden said. He claimed that his chart was more of a myth-busting document, merely showing the facts of the situation. It attempts to rebut criticism from the right of Obama as a tax-and-spend liberal Democrat exploding the deficit.

But what about the criticism that the economy needs more, and not less, fiscal support?[…]

Linden didn’t really contest the argument. “You can argue (the information on the chart) was the wrong direction, given our economic issues, given the fragility of our recovery,” he said. Linden did add that “it’s worth remembering that the President proposed a substantial jobs package last year and the Republicans blocked it.” That is true, although the payroll tax cut and an extension of unemployment insurance, a substantial part of the American Jobs Act, did pass.

But this gets to the point of who should take credit for that chart. Republicans in Congress demanded less spending, lower taxes and cuts to the deficit when they took power in the House in 2011. The chart shows that this happened. They blocked higher fiscal spending. They got a debt limit deal that constrains spending for the next ten years. They put forward the measures that will reduce the deficit by trillions, if the trigger remains in place. Republican House members should be just as comfortable tweeting out this chart as the President. It falls in line with virtually every one of their professed favorite policies.

“Both things are true,” Linden said. “One, that it is a myth that the President has been a great big spender… but you can also say, if you’re looking for a partial reason why our recovery hasn’t been faster, that may be one of the answers, that the President is pursuing the preferred policy path of his conservative critics.”

I think he may have missed the point. When the president and his supporters send out a chart like that lauding their success at cutting spending and taxes, they are telling people that it’s their preferred policy too.

But they’ve done this from the beginning, going all the way back to the transition when the president was giving the entire village a woodie with his Grand Bargain vision. The health care bill was sold as primarily a money saver (although nobody believed it…) They have often touted their tax cuts as huge accomplishments. president Obama himself promised to cut the deficit in half in his first term (a first term virtually defined by an epic economic downturn.) It’s quite easy to see why people would assume that they truly are proud of their record of spending cuts and tax cuts and think that a soft austerity was a pretty good idea.

Dday winds up with this:

“It’s a mythbusting piece more than anything else,” Linden concluded. “These are the numbers. Spending, taxes and the deficit have gone down. You can say fairly that this is not the economic policy we should be pursuing. If you want to criticize the President because he’s not been Keynesian enough, that’s OK with me. If you’re saying that he’s been too much of an austerity President, fine. But especially on a day when Mitt Romney is out there talking about the President running up massive debt and spending wildly, you have to say this is just not true.”

The problem is that the policy that would be best for the economy is the policy that would feed this myth, and when I look at what’s more important, the myth or millions of people suffering needlessly, I know where I come down.

Someday, someone is going to make the case to the American people for policiesthat will work instead of operating entirely on the basis of conservative myths. I’m not sure when that will be but keep your eye on Europe over the next few months to see what happens when austerity finally bites so hard that the people get fed up.

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What Krugman said. Again.

by David Atkins

At the risk of offending the copyright gods, I have to repost Paul Krugman’s delicious mockery of Americans Elect and the prevailing punditry here. It’s just too good.

And the center not only did not hold, it couldn’t seem to get any attention whatsoever. Americans Elect, a lavishly funded “centrist” group that was supposed to provide an alternative to traditional political parties, has been a ridiculous flop. Basically, about seven people were actually excited about the venture — all of them political pundits. Actual voters couldn’t care less.

What went wrong? Well, there actually is a large constituency in America for a political leader who is willing to take responsible positions — to call for more investment in the nation’s education and infrastructure, to propose bringing down the long-run deficit through a combination of spending cuts and tax increases. And there is in fact a political leader ready and willing (maybe too willing) to play that role; his name is Barack Obama.

So why Americans Elect? Because there exists in America a small class of professional centrists, whose stock in trade is denouncing the extremists in both parties and calling for a middle ground. And this class cannot, as a professional matter, admit that there already is a centrist party in America, the Democrats — that the extremism they decry is all coming from one side of the political fence. Because if they admitted that, they’d just be moderate Democrats, with no holier-than-thou pedestal to stand on.

Americans Elect was created to appeal to this class of professional centrists — which meant that it was doomed to go nowhere. Because outside that class, the large number of people who believe in all the good stuff the centrists claim to favor are, you know, going to vote for Obama. The large number of people who don’t believe in any of that are going to vote for Romney. All AE could ever have been was a distraction; and it turns out not to have managed even that.

Is there a class of creature more narcissistic than the centrist pundit? Hard to know.

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Puppies from heaven

by digby

Via Grist:

Visit msnbc.com for breaking news, world news, and news about the economy

From the “if only life were like this” files

by digby

Yesterday I wrote about Tom Coburn calling out Paul Krugman in his interview with Ezra:

You’ll especially enjoy the anecdote about Krugman in which Coburn says he’s all wet about austerity because Sweden is doing well. Ezra was pretty tart in his response, but I so hope the good professor responds.

He did:

I learn from Ezra Klein’s interview with Tom Coburn that Sweden, of all places, has become the new right-wing icon. I thought Europe’s woes were all about collapsing welfare states? But anyway, the story now is that Sweden has slashed spending and cut taxes, and is doing great; supply-side economics vindicated!

Ezra points out, rightly, that Sweden has actually benefited a lot from very aggressive monetary policy — one of the original Princeton zero-lower-bound Group of Four, Lars Svensson, is now deputy governor of the Riksbank. (The others were Mike Woodford, yours truly, and a fellow by the name of Ben Bernanke).

But Ezra didn’t challenge Coburn on the claim about spending cuts; why don’t we look at what Sweden has actually done, as opposed to the official right-wing line? Look, in particular, at actual government consumption — purchases of stuff. Here’s Sweden versus the United States, from Eurostat:

Somebody has been practicing harsh spending-side austerity — and it’s not Sweden.

Maybe the president just wanted to prove his austerian bonafides to his pal Coburn when he tweeted this today:

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Go Bernie

“The wealthiest 400 people own more wealth than the bottom half of the American people — more than 150 million people.”

“If you can believe it the bottom 60% of the people who will be hurt by what’s coming out of this conference own 1% of the wealth of this country.”

“And the situation is getting worse.”

Carrots and sticks

by David Atkins

I can’t help but sigh when reading stories like this:

In a bid to retake the initiative on small-business policy, President Obama Wednesday is expected to propose a 10 percent tax credit tied to new hiring. But the policy appears designed as much to draw a political distinction as to generate new jobs. In describing the proposal, which Mr. Obama will flesh out in a visit to a Washington-area small business, the administration drew a sharp contrast with a Republican small-business tax cut that passed the House last month, which the White House contends is too tilted toward the wealthy.

Under the White House proposal, which the president previewed in a video address over the weekend, a company would get credit against income taxes worth up to 10 percent of the increase in total wages in 2012, which could come either in the form of salaries for new hires or raises. A company that increased its payroll by $4 million would see a $400,000 income tax credit.

It’s true that policymakers have limited tools for controlling policy, including the carrot of tax credits or the stick of law and regulation. One of the advantages of the carrot approach is that it involves soft power and a curb on hostility. But the disadvantage, of course, is that every tax credit given out exacerbates the nation’s budget problem. Also, at a time when American corporations are making record profits, it’s not clear just how much of an impact the offer of greater riches via tax credits is going to provide.

At a certain point, policy makers are going to have to use more sticks than carrots when dealing with big business–not just because of the budget, but also because the usefulness of the carrot keeps decreasing. And if policy makers are too afraid of big business’ considerable campaign war chests to use the sticks that are necessary, then they might want to using some sticks to change that part of the equation.

One of the dirty secrets about politics is that being a legislator is a fairly miserable experience. About half of any given day is spent raising money, whether it be dialing for dollars, lunching with insufferable donors, or attending rubber chicken fundraisers while taking pictures with random people in exchange for checks.

It’s awful. It drives a lot of good people away from running for office, and it means that only certain types of people with a high tolerance for that sort of lifestyle can survive staying elected to office (to say nothing of getting elected in the first place.)

The judicious use of a few sticks to bat big business away from the campaign table and curb them in the policy arena wouldn’t just help the country. It would also make legislators’ lives easier and more rewarding, too.

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I think it’s going to happen this time:

At the Peter G. Peterson Foundation’s 2012 Fiscal Summit, there was a clear difference between Democrats and Republicans: Democrats talked constantly about how they should be talking about entitlements. Republicans reiterated their position that they won’t talk taxes.

“Our party’s problem is, we are always reluctant to give up the gains of the past to create the future,” Bill Clinton told the audience at the Pete Peterson’s fiscal summit. “Democrats are reluctant to commit to longer-term health-care savings; they don’t want to touch Social Security.”

Clinton went on to attack Republicans for becoming a far more extreme and ideological party, making compromise nearly impossible. But he brought up the same point time and again: “My party is not blameless.”

Rep. Xavier Becerra (D-Calif.), a former member of the supercommittee, echoed the same sentiments at Peterson’s deficit-reduction confab. In responding to legitimate fears that Republicans would privatize or eliminate social services,“maybe Democrats worked too hard to protect those programs from devastating cuts and in doing so, perhaps that has kept us from trying to come up with a smart budget,” Becerra admitted.

Democrats say they took these criticisms to heart during the supercommittee negotiations, initially proposing $400 billion in savings from Medicare — half through benefit cuts and half through provider cuts. Democrats point to such proposals as evidence of their party’s willingness to compromise and incorporate a diversity of views, blaming Republican intransigence for the deficit-reduction talks’ ultimate failure. “We have a lot of people in our party who will not be drummed out if they depart from the conventional wisdom,” Clinton explained.

For all that the Democrats tried to show they were willing to talk entitlements, you didn’t hear any Republicans at Peterson’s fiscal summit saying that they should be willing to compromise more by considering tax increases.

Even when asked point-blank how the GOP was to blame for the deficit crisis, Sen. Rob Portman — Bush’s budget director and another supercommittee alum — avoided any mention of taxes. Yes, he said, the Bush administration could have paid more attention to the long-term fiscal picture. But it was because “after 9/11, particularly … more was spent on homeland security, defense,” Portman explained. He added that Bush should have vetoed costly appropriations bills from Congress and cut more social spending. What he didn’t bring up: the Bush tax cuts — which have added more than $1.8 trillion to the deficit, more than any single other program under his presidency or Obama’s.

When Republican discuss a fresh approach to taxes, they cast it as “tax reform” that excluded any tax hikes. “What also doesn’t count as ‘cuts and reforms’ are tax increases,” said Speaker John Boehner, declaring that the GOP would refuse the lift the debt-ceiling — once again — until equivalent “cuts and reforms” were passed. (Read Boehner’s full speech.)

CNN’s Erin Burnett prodded Boehner further to see whether Republicans were, in fact, completely unwilling to compromise on the issue. After all, closing tax loopholes and carve-outs — something that the House speaker did promise to do — would presumably result in some people paying more, right?

Boehner stuck to the script, insisting that “lowering rates and broadening the base” was the only acceptable answer. Burnett pressed the question again: “Broadening the base” meant closing loopholes, which meant taxes for some would go up, right? Boehner equivocated. “Yeah, some may pay more and some may pay less,” he said quickly.

I’m afraid we are looking as a scenario in which they’ll end up accepting “tax reform” (another word for tax cuts for the wealthy and corporations) in exchange for tax hikes on the middle class and benefits cuts to social security and medicare. And they will strut and puff and knock themselves over patting each other on the back for being “responsible” and doing the “hard work” of screwing the American people, including the most vulnerable, in the middle of a depression and at a time when their futures have never been more insecure. Heckuva job.

I don’t know what more to say about this. Voting against them will not stop it. Voting for them will not stop it. So far, public opposition will not stop it. Certainly, there’s little reason to believe that the administration will stop it. They brag about their program cutting prowess with charts like these:

Norman Solomon vs the empire