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By Harold Meyerson
Editor-at-Large, The American Prospect

A Mediterranean diet, the New England Journal of Medicine reported Monday, can lengthen one’s lifespan. So inhabitants of southern Europe can look forward to long lives — of anxiety and privation.

Already mired in a depression comparable to that of the 1930s, Spain, Greece and Portugal are going to see things grow worse this year, according to an annual economic forecast released by the European Commission on Friday. Unemployment rates in both Spain and Greece — where a quarter of the populations are unemployed and the share of jobless young people exceeds 50 percent — will rise to 27 percent.

At least the leaders in power in 1930 had an excuse when the economy began to collapse. Then, there was genuine bewilderment among economists and governmental chieftains across the political spectrum about how to induce a recovery. From British Laborite Ramsay MacDonald to the German centrist Heinrich Bruning to American conservative Herbert Hoover, leaders cut spending to bring their budgets into balance.

These austerity policies proved an unmitigated disaster. By reducing government spending while business and consumer spending were tanking, these heads of government constricted all economic activity. In turn, unemployment continued to soar. Frustrated with the inability of mainstream political parties to stop the collapse, voters in some nations turned to extremes — most notably, of course, in Germany.

Unlike their predecessors, today’s leaders have models on how to revive depressed economies. The example of Franklin Roosevelt, whose public investments in jobs and defense turned the U.S. economy around, and the writings of John Maynard Keynes, who demonstrated that the solution to depression is boosting demand, are plain for all to see. Seeing isn’t believing, however, when ideology dims the eye.

Today, in the spirit of the Bourbon kings who reclaimed power in post-Napoleonic France, having learned nothing during their years in exile, many European leaders are repeating the mistakes that their predecessors made in the ’30s: demanding that governments reduce spending even as their private-sector economies limp along. Only this time around, the miracle of the euro has greatly the reduced the autonomy of many continental nations while giving their creditor, Germany, control over their destinies. German Chancellor Angela Merkel is imposing austerity budgets on other nations, even Spain, which had a string of balanced budgets before the 2008 collapse. (more…)

Jack Metzgar
Emeritus Professor of Humanities at Roosevelt University in Chicago

What if I told you that there is a way to increase wages and profits at the same time without any need to raise prices?  Most people would, I think, say that’s impossible because increased wages must always be paid for either by increasing prices or by reducing profits or both.  They’re wrong.  Most economists (including conservative ones) would say that not only is it possible, it should just naturally occur.  Economists can show with mathematical certainty that productivity growth makes it possible for both wages and profits to increase while prices remain stable. But just because it’s possible doesn’t mean it’s inevitable. Turns out, the connection between productivity and higher wages isn’t natural.

It did seem that way for a while.  Productivity and wages grew in tandem in the U.S. for the 30 years after World War II.  But for the past four decades, wage increases have not kept pace with productivity growth.

We’ve had plenty of growth in productivity across the U.S. economy (it’s doubled since 1973), but only piddling increases in real wages and family incomes.    That is the single biggest reason for the growth of income inequality in the U.S. since the 1970s – not the Reagan and Bush II tax cuts for the wealthy.  New York Times labor reporter Steven Greenhouse calculates that if productivity sharing had continued the way it was in the three decades preceding 1973, each full-time worker would now be earning some $20,000 a year more.  The median annual wage would be about $60,000 instead of $40,000.

We need a law requiring employers to share the fruits of productivity growth with their workers.  Put aside, for the moment, that there is probably no chance of passing such a law in the next four years or longer.  Debate over a proposed law would generate the broad public discussion of productivity growth and productivity sharing that we need to make clear the causes and consequences of our growing inequality of income and to help us figure out how to reverse it.

Productivity growth is one of only a handful of ways to increase a nation’s wealth.  Historically, the other most important way is plunder – raise an army and take wealth from somebody else.  As Adam Smith argued in 1776, productivity growth is the key to peace and prosperity because it is a way to increase “the wealth of nations” without going to war.  Capitalism, the factory system with its division of labor, the industrial revolution, and steadily increasing technological change continuously improve productivity, which simultaneously increases total wealth and reduces the need for human toil.  But productivity growth only produces widespread economic benefit if the wealth is shared, and if that ever occurred “naturally,” it was because workers’ organizations – labor unions and political parties – functioned as “forces of nature” once upon a time. (more…)

Stewart Acuff
Chief of Staff and Assistant to the President, Utility Workers Union of America

Wednesday night I watched a recording of Lyndon Johnson making a speech for passage of the 1965 Voting Rights Act. Johnson’s statement in the course of the speech, “We Shall Overcome,” stills moves me.

The Supreme Court of a truly democratic nation would not even hear this case seeking to overturn the Voting Rights Act. My friend Rev. James Orange helped ogranize the Selma to Montgomery march. Every year he took me to the historical re-enactment. The amount of blood that the passage of the Voting Rights Act required is a stain on our nation. Its repeal by an un-elected rightwing Supreme Court would be a dishonor to our nation and a dishonor to all the sacrifice of all those who struggled for its passage

All the radical right wing efforts to frustrate voters of color this year is nauseating, as is so-called Justice Scalia saying there is “racial entitlement.” Our nation’s democracy is threatened continually by radical right wing Republicans who don’t want a real democracy, who try to buy elections, and who change voting rules to intimidate and frustrate voters.

The radical right wing Republicans would make a mockery of our martyrs and slowly but surely dismantle American Democracy.

Brothers and sisters, we will have to sacrifice to protect this democracy.

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By Dave Johnson
Fellow, Campaign for America's Future

There is no deficit problem. The deficit is down 50 percent as a share of gross domestic product just since President Bush’s fiscal year 2009 deficit and is falling at the fastest rate since the end of World War II. Yet the Washington debate is about how and where to cut us back into recession. Why?

Congress should just repeal the sequester – we don’t need it. We have 10 years to fix the long-term deficit situation. We should not be stampeded by deficit-scare propaganda and instead take the time to carefully consider the right approach. That way we won’t make the mistakes that Europe is making.

Deficit Falling

Here is a chart of the deficit as a percent of GDP: (Data sources below)

Once again, because it might be hard to register due to the drumbeat of deficit-scare propaganda, this is a fact: the deficit is falling at the fastest rate since the end of World War II. It is down 50 percent as a percent of GDP just since Bush’s huge $1.4 trillion fiscal 2009 deficit. And the deficit is projected to be stable for a decade.

All of that means that no, we do not have a “deficit emergency,” the deficit is not “out of control” and we have 10 years to decide how best to fix things.

So let’s stop listening to the drumbeat of “deficit shock” propaganda and not be rushed into doing any more stupid, destructive cuts in the things We, the People do to make our lives better.

Medicare Cost Growth Way Down, Too

You probably hear again and again that Medicare is the driver of future deficit trouble.

Here is something you probably didn’t know because of the drumbeat of deficit propaganda: Medicare cost growth is way down. From 2000 through 2009, Medicare spending climbed by an average of 9.7 percent a year. Now those increases are down to 1.9 percent and are still falling.

Take a look at this report from the U.S. Department of Health and Human Services, Growth In Medicare Spending Per Beneficiary Continues To Hit Historic Lows:

The very slow growth in Medicare spending in fiscal year 2012 follows slow growth in 2010 and 2011. In 2010, spending grew at only 1.8 percent per beneficiary, and in 2011 at 3.6 percent. Over the three year period from 2010-2012, Medicare spending per beneficiary grew an average of 1.9 percent annually, or more than 1 percentage point more slowly than the average annual growth of 3.2 percent in per capita GDP. (more…)

George Lakoff
Author, “The Political Mind,” “Moral Politics,” “Don’t Think of an Elephant!”

Paul Krugman, Joe Stiglitz, Robert Reich and other major economists have pointed out that the deficit is not an urgent economic problem and that, to the contrary, the economy would be helped by an increase in public investment and harmed by drastic cuts. The Sequester would hurt the economy, millions of people, and the country as a whole.

President Obama has detailed the vast range of harms that the sequester would bring. They are well-known. And they are not necessary. The president sees the sequester, if it happens, as an enormous self-inflicted wound, inflicted on America by a Republican-dominated House elected by Americans.

But pointing out Republican-caused harms to millions of people — many of them Republicans — does not sway the ultra-right. Why? Democratic pundits say that Republicans want to hurt the president, to show government doesn’t work by making it not work, and to protect “special interests” from higher taxes. All true. But there is an additional and deeper reason. Ultra-conservatives believe that the sequester is moral, that it is the right thing to do.

Progressives tend to believe that democracy is based on citizens caring for their fellow citizens through what the government provides for all citizens — public infrastructure, public safety, public education, public health, publicly-sponsored research, public forms of recreation and culture, publicly-guaranteed safety nets for those who need them, and so on. In short, progressives believe that the private depends on the public, that without those public provisions Americans cannot be free to live reasonable lives and to thrive in private business. They believe that those who make more from public provisions should pay more to maintain them.

Ultra-conservatives don’t believe this. They believe that Democracy gives them the liberty to seek their own self-interests by exercising personal responsibility, without having responsibility for anyone else or anyone else having responsibility for them. They take this as a matter of morality. They see the social responsibility to provide for the common good as an immoral imposition on their liberty. (more…)

By Bill Moyers
Author, Television Documentary Journalist

By Michael Winship
Senior Writer of Moyers & Company

To those who would argue that the notion of a perpetual motion machine is impossible, we give you the revolving door — that ever-spinning entrance and exit between public service in government and the hugely profitable private sector. It never stops.

Yes, we’ve talked about the revolving door until we’re red or blue in the face (the door is bipartisan and spins across party lines) but this mantra bears its own perpetual repetition, a powerful reason for our distrust of the people who make and enforce our laws and regulations.

Cathy Koch poses in the Russell Senate Office Building on Capitol Hill on April 3, 2009. (Photo By Bill Clark/Roll Call/Getty Images)

Jesse Eisinger, writing at The New York Times, reports that on January 25, Senate Majority leader Harry Reid announced the appointment of Cathy Koch as his chief advisor on tax and economic policy. According to the Times, “The news release lists Ms. Koch’s admirable and formidable experience in the public sector. ‘Prior to joining Senator Reid’s office,’ the release says, ‘Koch served as tax chief at the Senate Finance Committee.’”

But, Eisinger notes, the press statement fails to mention Ms. Koch’s actual last job — as a registered lobbyist for GE. “Yes, General Electric,” he writes, “the company that paid almost no taxes in 2010. Just as the tax reform debate is heating up, Mr. Reid has put in place a person who is extraordinarily positioned to torpedo any tax reform that might draw a dollar out of GE — and, by extension, any big corporation.”

One other example cited in the Times article: Julie Williams, chief counsel for the Office of the Comptroller of the Currency — “and a major friend of the banks for years” — has been forced out of the OCC by its new boss and is joining Promontory Financial Group, “a classic Washington creature that is a private sector mirror image of a regulatory body.”

Promontory plays both sides of the field, helping financial companies hack their way through the bogs of regulation while simultaneously “helping” the OCC review said regulations — like the just abandoned Independent Foreclosure Review that essentially let the banks hire outside “experts” to decide who had been victimized by the banks’ abuse of mortgages. Result: not a dime to affected homeowners but $1.5 billion in consulting fees to Promontory and other companies like it.

And get this: as Julie Williams exits OCC for Promontory, she will be succeeded as chief counsel by Amy Friend, former chief counsel of the Senate Banking Committee but currently a managing director at — wait for it — Promontory! (more…)

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By Dean Baker
Co-Director, Center for Economic and Policy Research, Author

In societies across the globe, men demonstrate their manhood in different ways. There are many wonderful tracts on the topic. However, in the culture of Washington, D.C., the best way to demonstrate your manhood is to express your willingness to cut Medicare and Social Security. There is no better way to be admitted into the club of the Very Serious People.

This is the reason that we saw White House spokesman Jay Carney tell a press conference last week that Barack Obama is a macho man. He told the reporters that President Obama is still willing to cut Social Security benefits by using the Chained CPI as the basis for the annual cost-of-living adjustment (COLA). This willingness to cut the benefits of retirees establishes President Obama as a serious person in elite Washington circles.

While most of the D.C. insiders probably don’t understand the Chained CPI, everyone else should recognize that this technical fix amounts to a serious cut in benefits. It reduces benefits compared with the current schedule by 0.3 percent annually. This adds up over time. After someone has been getting benefits for 10 years, the cut in annual benefits is 3 percent. After 20 years, people would be seeing a benefit that is 6 percent lower, and after 30 years their benefit would be reduced by 9 percent. (AARP has a nice calculator that shows how much retirees can expect to lose from the Chained CPI.)

We can debate whether the Chained CPI benefit cut should be viewed as “large,” but there is no debate that Chained CPI cut is a bigger hit to the typical retiree than the ending of the Bush tax cuts were to the typical high-end earner. Social Security provides more than half of the income for almost 70 percent of retirees. This means that the 3 percent cut in Social Security benefits amounts to a reduction in their income of more than 1.5 percent.

By contrast, if a wealthy couple has an income of $500,000 a year. As a result of President Obama’s tax increases, they would be paying an addition 3 percentage points in taxes, or $3,000, on the income above $400,000. That comes to just 0.6 percent of their income. (more…)

By Jim Hightower Author, Commentator, America’s Number One Populist

When President Obama called for raising America’s wage floor to nine bucks an hour, GOP House leader John Boehner attacked it like a gater on a poodle.

Incredibly, he claimed that raising the wages of our country’s most-poorly-paid workers would hurt – guess who? – America’s most-poorly-paid workers! This disingenuous pitting of poor people against themselves is derived from a corporate-manufactured myth that hiking the minimum forces small business owners to fire employees or even go bankrupt. “When you raise the price of employment,” he grumped, “guess what happens? You get less of it.”

Well guess again, John. That “job killer” fable has been debunked again and again by real world experience. The pay floor has constantly been elevated by Congress, states, and cities, causing little-to-zero negative impacts on job numbers, but very positive results for employee morale, productivity, and turnover. It also generates a spending boost for local economies (especially for – guess who? – small businesses). (more…)