Month: March 2013

Back on the Chained-CPI gang

by digby

Just FYI, Gene Sperling said today on his Reddit chat that the president really prefers the Chained-CPI and that it’s not just an inducement to get the Republicans on board with the Grand Bargain.  This may sound obvious, since it’s been clear from before the inauguration that the administration wants to “reform” the so-called entitlements. But Sperling made it clear today that they believe in this on the merits:

The cost of living question relates to how the government measures inflation. Today, we use a measure of inflation called the “CPI” or consumer price index. An alternative would be to switch to what is known as the superlative or “chained” CPI. The superlative CPI makes two technical corrections to the standard CPI: it accounts for consumers’ ability to substitute between goods in response to changes in relative prices and accounts for biases arising from small samples. Most experts agree that the Superlative CPI provides a more accurate measure of the average change in the cost of living than the standard CPI.

The President would prefer to have this adjustment in the context of a larger Social Security reform, but he has said to Speaker Boehner that if it is part of a larger agreement that would include tax reform that would raise revenue by cutting loopholes and expenditures from the most well off, that he would be willing to agree to it because in divided government, if we’re going to make progress, we have to be willing to compromise. One important note: any agreement to make this change to the CPI must include a dedication of a portion of the savings to protections for low-income Americans, certain veterans, and older Social Security beneficiaries. Our current offer which reduces the deficit by $230 billion over the next 10 years includes those protections.

I guess that’s one of the “opportunities” the president said today that he believes the Republicans are missing out on by refusing his Grand Bargain.

You know, I have never understood the logic that says changing to this new cost of living formula more accurately reflects the real cost of living, but don’t worry we will fix the part where it hurts the poor, veterans and really old people. The “real” cost of living should be the real cost of living, no? If it isn’t a cut, why would these people be hurt?

The fact is that Social Security is already inadequate for millions and millions of people, and not just the poorest of the poor and veterans. And the losses of the past decade have taken their toll on many more millions who are about to go into the system. For reasons that I cannot completely understand, they want to make it worse. There’s just no other way to think about this.

Update: By the way, it was Congressman Alan Grayson who asked the question,”why it is good policy to reduce the cost of living calculation for Social Security and veterans benefits?” He didn’t exactly answer why, but he sure agreed that they think it’s good policy.

Here’s Grayson appearing on Current last night talking about this subject:

Rep. Alan Grayson, D-Fla., joins John Fugelsang on “Viewpoint” to weigh in on news that President Obama told Senate Democrats he was open to considering cuts to such federal programs as Social Security and Medicare. “I take no pleasure in saying this because the president is my president — I voted for him twice and he’s the leader of my party — but on this regard the president is wrong,” Grayson says.

Grayson also shares his thoughts on the Congressional budget battle. “This terrible preoccupation with austerity, with deficits, with debt is mistaken,” Grayson says. “The government has never been able to borrow at such low rates for my entire lifetime, in fact, going back 100 years, the government’s never been able to borrow at 2 percent before — that’s what the rates are these days — and that just shows you that there is no fiscal crisis. … We’ve simply given in to the Republican mindset of crises.”

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Hey guess what? It’s possible to cut the deficit without making the poor and middle class suffer. Plus jobs!

by digby

Personally, I don’t think worrying about deficits at the moment makes any sense at all, but if we are going to worry about it at least it would be nice if some alternatives to cutting the daylights out of everything people need were on the table. It could be done. Unfortunately average people won’t be suffering for the sins of their betters so I suppose that’s out of the question.

Anyway, here’s the summary of the CPC’s new Back to Work budget which does just that:

We’re in a jobs crisis that isn’t going away. Millions of hard-working American families are falling behind, and the richest 1 percent is taking home a bigger chunk of our nation’s gains every year. Americans face a choice: we can either cut Medicare benefits to pay for more tax breaks for millionaires and billionaires, or we can close these tax loopholes to invest in jobs.

We choose investment. The Back to Work Budget invests in America’s future because the best way to reduce our long-term deficit is to put America back to work. In the first year alone, we create nearly 7 million American jobs and increase GDP by 5.7%. We reduce unemployment to near 5% in three years with a jobs plan that includes repairing our nation’s roads and bridges, and putting the teachers, cops and firefighters who have borne the brunt of our economic downturn back to work. We reduce the deficit by $4.4 trillion by closing tax loopholes and asking the wealthy to pay a fair share. We repeal the arbitrary sequester and the Budget Control Act that are damaging the economy, and strengthen Medicare and Medicaid, which provide high quality, low-cost medical coverage to millions of Americans when they need it most.

This is what the country voted for in November. It’s time we side with America’s middle class and invest in their future.

Job Creation

• Infrastructure – substantially increases infrastructure investment to the level the American Society of Civil Engineers says is necessary to close our infrastructure needs gap

• Education – funds school modernizations and rehiring laid-off teachers

• Aid to States – closes the recession-caused gap in state budgets for two years, allowing the rehiring of cops, firefighters, and other public employees

• Making Work Pay – boosts consumer demand by reinstating an expanded tax credit for three years

• Emergency Unemployment Compensation – allows beneficiaries to claim up to 99 weeks of unemployment benefits in high-unemployment states for two years

• Public Works Job Programs and Aid to Distressed Communities – includes job programs such as a Park Improvement Corps, Student Jobs Corps, and Child Care Corps

Fair Individual Tax

• Immediately allows Bush tax cuts to expire for families earning over $250K

• Higher tax rates for millionaires and billionaires (from 45% to 49%)

• Taxes income from investments the same as income from wages

Fair Corporate Tax

• Ends corporate tax bias toward moving jobs and profits overseas

• Enacts a financial transactions tax

• Reduces deductions for corporate jets, meals, and entertainment

Defense

• Returns Pentagon spending to 2006 levels, focusing on modern security needs

Health Care

• No benefit cuts to Medicare, Medicaid, or Social Security

• Reduces health care costs by adopting a public option, negotiating drug prices, and reducing fraud

Environment

• Prices carbon pollution with a rebate to hold low income households harmless

• Eliminates corporate tax subsidies for oil, gas, and coal companies

It would be really neat if the press could pay as much attention to this as they do every one of Paul Ryan’s dystopian nightmare plans. I suppose it would be silly to hold my breath.

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Ten years on: the warmongering lunatic list

by digby

Everyone’s doing ten-years-on stuff about the Iraq War, a lot of it showing that there were dissenters (such as this one by Greg Mitchell chronicling all the newspapers that were against the war.) But I’d like to highlight the war fever that was far more rampant.

I’ll start with one of the more famous pieces of lunacy that made the rounds during the run-up. First there was this, from the summer of 2002, a sentiment widely shared among the warmongers.This one was written by the AEI “Freedom Fellow” and NRO contributor by the name of Michael Ledeen:

If we come to Baghdad, Damascus and Tehran as liberators, we can expect overwhelming popular support. Secretary of Defense Donald Rumsfeld put it well the other day when he encouraged his media questioners to think about the people in such places as prisoners, not as free men and women. They will join us if they believe we are serious, and they will only believe we are serious when they see us winning. Our first move must therefore show both our power and our liberating intent.

When they had a spot of trouble convincing the rest of the world of that overweening nonsense, they got a teensy bit frustrated. Here’s Ledeen a few months later:

March 10,2003:

Assume, for a moment, that the French and the Germans aren’t thwarting us out of pique, but by design, long-term design. Then look at the world again, and see if there’s evidence of such a design.

Like everyone else, the French and the Germans saw that the defeat of the Soviet Empire projected the United States into the rare, almost unique position of a global hyperpower, a country so strong in every measurable element that no other nation could possibly resist its will. The “new Europe” had been designed to carve out a limited autonomy for the old continent, a balance-point between the Americans and the Soviets. But once the Soviets were gone, and the Red Army melted down, the European Union was reduced to a combination theme park and free-trade zone. Some foolish American professors and doltish politicians might say — and even believe — that henceforth “power” would be defined in economic terms, and that military power would no longer count. But cynical Europeans know better.

They dreaded the establishment of an American empire, and they sought for a way to bring it down.

If you were the French president or the German chancellor, you might well have done the same.

How could it be done? No military operation could possibly defeat the United States, and no direct economic challenge could hope to succeed. That left politics and culture. And here there was a chance to turn America’s vaunted openness at home and toleration abroad against the United States. So the French and the Germans struck a deal with radical Islam and with radical Arabs: You go after the United States, and we’ll do everything we can to protect you, and we will do everything we can to weaken the Americans.

The Franco-German strategy was based on using Arab and Islamic extremism and terrorism as the weapon of choice, and the United Nations as the straitjacket for blocking a decisive response from the United States.

This required considerable skill, and total cynicism, both of which were in abundant supply in Paris and Berlin. Chancellor Shroeder gained reelection by warning of American warmongering, even though, as usual, America had been attacked first. And both Shroeder and Chirac went to great lengths to support Islamic institutions in their countries, even when — as in the French case — it was in open violation of the national constitution. French law stipulates a total separation of church and state, yet the French Government openly funds Islamic “study” centers, mosques, and welfare organizations. A couple of months ago, Chirac approved the creation of an Islamic political body, a mini-parliament, that would provide Muslims living in France with official stature and enhanced political clout. And both countries have permitted the Saudis to build thousands of radical Wahhabi mosques and schools, where the hatred of the infidels is instilled in generation after generation of young Sunnis. It is perhaps no accident that Chirac went to Algeria last week and promised a cheering crowd that he would not rest until America’s grand design had been defeated.

Both countries have been totally deaf to suggestions that the West take stern measures against the tyrannical terrorist sponsors in Iran, Iraq, Syria, Libya, and Saudi Arabia. Instead, they do everything in their power to undermine American-sponsored trade embargoes or more limited sanctions, and it is an open secret that they have been supplying Saddam with military technology through the corrupt ports of Sheikh Mohammed bin Rashid’s little playground in Dubai, often through Iranian middlemen.

It sounds fanciful, to be sure. But the smartest people I know have been thoroughly astonished at recent French and German behavior. This theory may help understand what’s going on. I now believe that I was wrong to forecast that the French would join the war against Iraq at the last minute, having gained every possible economic advantage in the meantime. I think Chirac will oppose us before, during, and after the war, because he has cast his lot with radical Islam and with the Arab extremists. He isn’t doing it just for the money — although I have no doubt that France is being richly rewarded for defending Saddam against the civilized countries of the world — but for higher stakes. He’s fighting to end the feared American domination before it takes stable shape.

If this is correct, we will have to pursue the war against terror far beyond the boundaries of the Middle East, into the heart of Western Europe. And there, as in the Middle East, our greatest weapons are political: the demonstrated desire for freedom of the peoples of the countries that oppose us.

Radio Free France, anyone?

Seriously, he wrote that.  And National Review published it.

A couple of weeks later he was widely quoted saying this:

I think it all depends how the war goes. And I think the level of causalities is secondary. It may sound like an odd thing to say. But all the great scholars who have studied American character have come to the conclusion that we are a warlike people. And that we love war. And one of my favorite comments on American character, which is Patton’s speech at the beginning of the movie, where he says “Americans love war. We love fighting. We’ve always fought. We enjoy it. We’re good at it. And so forth.” What we hate is not casualties but losing. And if the war goes well, and if the American public has the conviction that we’re being well-led, and that our people are fighting well, and that we’re winning, I don’t think causalities are gonna be the issue.

That was a common belief among the Bushies and other pro-war types.  They honestly believed that Americans don’t care about casualties, they only care about winning one for the Gipper.

This was normal discourse during this period. Ledeen was frequently featured on shows like Hardball, given a measure of respect usually reserved for sane people. But he was consumed with bloodlust and so was about half the country.

People all over the world marched against the war but nobody paid any attention to it. So we sat there, with our jaws dropped, wondering just how far down the rabbit hole we’d have to before we hit the bottom.

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QOTD: Brad DeLong

by digby

The Republicans went insane when Obama was elected. And Obama helped along the dysfunction when he pivoted from economic recovery to “grand deficit-reducing bargains” in the fall of 2009. And now we are in serious trouble.

And, people in the White House: No, I do not want to hear “we are doing a lot better than Europe!” again. I have heard that enough already…

A special shout out to DeLong for remembering something nobody else seems to remember: the 2010 election didn’t force the turn to deficit reduction. They were already there.

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Rooting for Rupert

by David Atkins

I can’t believe I’m saying this, but given him or the Koch brothers, I’d have to pick Rupert Murdoch as my preferred favorite in this battle with the Tribune Company.

This could get very ugly, very fast. The Koch brothers are reportedly considering a bid for the Tribune Company newspapers — focusing on the crown jewels of the L.A. Times and Chicago Tribune, or at least what jewels of power are left in the flailing newspaper industry — but they may face stiff competition in the form of a debt-free, full pocketed media power player named Rupert Murdoch.

L.A. Weekly’s Hillel Aron reports “multiple sources” claiming Charles and David Koch will offer to buy the Tribune Co. slate of papers — including the Times, the Trib, the Baltimore Sun, and five other papers — or maybe just offer to buy all of Tribune Co. outright. If the notoriously free-spending political heavyweights and brothers in industry choose to go for the whole company — and, importantly, if their offer is taken seriously and ends up bailing out the papers — their purchase would also include 20 television stations along with the eight papers. The Tribune Co. emerged from bankruptcy at the end of 2012 and has been looking to unload their newspaper holdings, apparently as part of a single-package deal, according to Bloomberg’s Edmund Lee. Any buyer interested in Tribune’s Co.’s newspapers will have to cough up a cool $600 million to acquire the whole lot — not exactly a lot to the Koch brothers, who spent untold hundreds of millions on the 2012 election… and weren’t too pleased with their return on investment.

What makes the L.A. Weekly report all the more exciting — if a little far fetched — is the looming giant in the wings: Murdoch has been eyeing the L.A. Times and Chicago Tribune for months now. It’s been reported that Murdoch “covets” the Times as a potential addition to his empire of more than 175 newspapers. There were reports of his interest as far back as last June. Then there were dueling reports of Murdochian interest in the Times, in particular, in October: one from the Times itself, and another from Murdoch’s Wall Street Journal. This was described by Daily Intel’s Joe Coscarelli as “media mogul equivalent of flirting.” In December, Murdoch was planning “to take a close look at Tribune Co.’s newspaper assets once they’re available,” Bloomberg’s Lee reported.

Why Rupert? Because the Koch brothers are libertarian, partisan ideologues through and through. Buying the Tribune Company would be a pocket change investment in churning out right wing propaganda. Worst of all, that propaganda would be most invested in protecting the fossil fuel industry which forms the basis of the Koch empire. The Koch greedheads are quite literally the two biggest villains on the planet, as no individuals stand in the way of sane, effective action on climate change and job creation as they do.

Rupert Murdoch is different. While politically conservative, he’s mostly just looking to make money. Fox News has been a good business for him. Just as importantly, Murdoch is no spring chicken, and his immediate family are reportedly less conservative than he is.

Given the choice, I would vote for Murdoch if I had a vote. But something tells me the country and the world may not be so lucky.

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Get some sleep

by digby

… and you’ll feel like this in the morning too

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Shhhh. Don’t talk about the Military Industrial Complex

by digby

Mother Jones featured an interesting little story on defense contracting (originally posted at TomDispatch)that seems to me to be pertinent to today’s budget battles:

The C-130 Hercules is a mid-sized transport airplane designed to airlift people or cargo around a theater of operations. It dates back to the Korean War, when the Air Force decided that it needed a next generation (“NextGen”) transport plane. In 1951, it asked for designs, and Lockheed won the competition. The first C-130s were delivered three years after the war ended.

The C-130 Hercules, or Herk for short, isn’t a sexy plane. It hasn’t inspired hit Hollywood films, though it has prompted a few photo books, a beer, and a “Robby the C-130” trilogy for children whose military parents are deployed. It has a fat sausage fuselage, that snub nose, overhead wings with two propellers each, and a big back gate that comes down to load and unload up to 21 tons of cargo.

The Herk can land on short runways, even ones made of dirt or grass; it can airdrop parachutists or cargo; it can carry four drones under its wings; it can refuel aircraft; it can fight forest fires; it can morph into a frightening gunship. It’s big and strong and can do at least 12 types of labor—hence, Hercules.

Too Much of a Good Thing

Here’s where the story starts to get interesting. After 25 years, the Pentagon decided that it was well stocked with C-130s, so President Jimmy Carter’s administration stopped asking Congress for more of them.

Lockheed was in trouble. A few years earlier, the Air Force had started looking into replacing the Hercules with a new medium-sized transport plane that could handle really short runways, and Lockheed wasn’t selected as one of the finalists. Facing bankruptcy due to cost overruns and cancellations of programs, the company squeezed Uncle Sam for a bailout of around $1 billion in loan guarantees and other relief (which was unusual back then, as William Hartung points out his magisterial Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex).

Then a scandal exploded when it was revealed that Lockheed had proceeded to spend some $22 million of those funds in bribes to foreign officials to persuade them to buy its aircraft. This helped prompt Congress to pass the Foreign Corrupt Practices Act.

So what did Lockheed do about the fate of the C-130? It bypassed the Pentagon and went straight to Congress. Using a procedure known as a congressional “add-on”—that is, an earmark—Lockheed was able to sell the military another fleet of C-130s that it didn’t want.

To be fair, the Air Force did request some C-130s. Thanks to Senator John McCain, the Government Accountability Office (GAO) did a study of how many more C-130s the Air Force requested between 1978 and 1998. The answer: Five.

How many did Congress add on? Two hundred and fifty-six.

As Hartung commented, this must “surely [be] a record in pork-barrel politics.”

I’m fairly sure this has happened oh … hundreds if not thousands of times. I urge you to read the whole thing to remind yourself of just how incestuous these companies and our government really are.

The sequester was designed to make these companies pressure their congressional minions to end it. Maybe some enterprising young journalist could do some digging and see how these companies are positioned economically and who they might be pressuring. It could be an informative story.

Read the whole piece to get a sense of just how huge these numbers involved are. These companies have a lot of influence. Oh, and by the way, the CEO of Lockheed made $20,538,981, in 2011. But let’s make sure we hit the 90 year olds up for their $1200.00 a month. They’re takers, you know, not makers. Of useless aircraft.

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Austeridad

by David Atkins

There’s a hero taking Spain by storm, and her name is Ada Colau.

Spanish media have described Colau, a spokeswoman for the Platform of Mortgage Victims, as “the best-known representative of popular indignation” in the country.

Her voice is heard on television or radio most days, and her ability to speak simply and engagingly about the complexities of mortgage finance has given her a loyal following, especially among younger Spaniards.

Supporters insist there is more to the platform (and its most prominent representative) than simple protest: The group has indeed emerged as an effective and influential political force, with the power to sway parliament and dominate headlines.

At the same time, the rise of grass-roots opposition movements such as the Platform is also seen by many as a symptom of Spain’s broader political malaise — exposing the failure of regular opposition parties such as the Socialist Workers’ Party to provide a serious counterweight to the government.

“The party system is completely discredited because the parties don’t respond to current reality,” says Colau.

She accuses both the ruling Popular Party and the Socialists of neglecting the plight of hundreds of thousands of Spaniards who are struggling to pay off their mortgages, and whose homes are now often worth less than their debts.

It is an acutely sensitive issue in Spain, made all the more emotional by an apparent series of suicides by heavily indebted homeowners facing eviction…

In an attempt to force parliament’s hand, the Platform collected more than 1.4 million signatures for a legislative initiative that calls for a deep overhaul of mortgage regulations and an end to Spain’s famously draconian approach to home buyers who fall behind on their payments.

The proposal would make it much harder for banks to evict troubled mortgage-holders. Crucially, it would also prevent banks from demanding full payment of the mortgage once a house was repossessed. This would, in effect, allow heavily indebted homebuyers simply to walk away from their property if they could no longer afford their mortgage.

“It cannot be that the most vulnerable people are made to live with the consequences of their actions until their death, while the big companies take no responsibility and are bailed out with public money,” says Colau.

Spain’s mortgage laws are even more abusive than ours, and the nation’s relationship with its banking industry is even more cozy and collegial, if possible. But one of Spain’s other big problems is that it set up a number of large community banks that took on much of Spain’s debt. It’s the one major country that does potentially need to fear its bond lords, as many of its bonds are held by its own banks.

So Spain is locking itself into an austerity death whorl because its politicians fear they have little other choice.

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Why austerity?

Yes, except that instead of inducing vomiting in themselves, the modern patricians are making the slaves throw up for them.

Farrell makes the point that while the Europeans have outdone themselves with this, its taken its toll here as well by keeping Barack Obama from enacting a second stimulus. I suppose that’s true.  But then we’re not done cutting yet are we?

Anyway, here’s a video with the author:

The Watson Institute presents Mark Blyth on Austerity from The Global Conversation on Vimeo.

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A friendly reminder for Ed Rendell and the boys

by digby

The Washington Post did an interesting thing: they compared life expectancies between two neighboring Florida counties. One, St. Johns, is a well-off coastal county and its neighbor next door Putnam is a more working class inland county. Guess what?

The widening gap in life expectancy between these two adjacent Florida counties reflects perhaps the starkest outcome of the nation’s growing economic inequality: Even as the nation’s life expectancy has marched steadily upward, reaching 78.5 years in 2009, a growing body of research shows that those gains are going mostly to those at the upper end of the income ladder.

The tightening economic connection to longevity has profound implications for the simmering debate about trimming the nation’s entitlement programs. Citing rising life expectancy, influential voices including the Simpson-Bowles deficit reduction commission, the Business Roundtable and lawmakers on both sides of the aisle have argued that it makes sense to raise the eligibility age for Social Security and Medicare.

But raising the eligibility ages — currently 65 for Medicare and moving toward 67 for full Social Security benefits — would mean fewer benefits for lower-income workers, who typically die younger than those who make more.

“People who are shorter-lived tend to make less, which means that if you raise the retirement age, low-income populations would be subsidizing the lives of higher-income people,” said Maya Rockeymoore, president and chief executive of Global Policy Solutions, a public policy consultancy. “Whenever I hear a policymaker say people are living longer as a justification for raising the retirement age, I immediately think they don’t understand the research or, worse, they are willfully ignoring what the data say.”

Well, not to worry. The consensus is that the Chained-CPI is the lesser of evils and that means that many of the poor people who will get screwed by that will already be dead too soon so that’s nice. And everybody says we don’t need to worry about the few who beat the odds and live long enough for the Chained-CPI to really bite because the government will surely come up with something to make sure they’re taken care of. The whole thing is sick, sick, sick.

Remember people, this is America. We’re not a poor country:

But we do have a problem:

And you are telling me that we have to cut the already meager incomes and benefits of old, disabled,sick and poor people even though we are, by far, the richest country in the world? Really? That’s the only thing we can do? As I said: sick.

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