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Robert Borosage

By Robert L. Borosage
Co-Director Campaign for America’s Future

Beware of conservatives bearing gifts. Today in the Washington Post, former Bush policy advisor Michael Gerson echoes a growing chorus of conservatiuve pundits offering up “Social Security reform” as “the answer to Obama’s problems.” The advice is illogical on its face, pernicious in its consequence, and poisoned from its source.

Gerson argues that Obama faces a major strategic decision in his coming State of the Union address, which must take the “first cut at the reelection message he carries to reelection or defeat.” Gerson helpfully offers a course virtually guaranteed to increase the chances of the latter.

He predicts the president will focus on a multi-year discretionary spending freeze, and on banning earmarks. But, in a classic Republican negotiating stance, he dismisses this embrace of conservative policies as meaningless, since Republicans will trump anything the president suggests on spending cuts.

So to gain agreement with Republicans, Gerson argues, the president will have to offer up more, choosing between tax reform and entlement reform. The former is dismissed as too hard. (And is dangerous for Republicans since it is hard to do tax reform without insisting that the wealthy no longer pay an effective tax rate that is lower than their secretaries).

On entitlement reform, Gerson repeats virtually word for word what has become beltway conventional wisdom among conservatives in both parties. The real force behind rising deficit and debt projections is our broken health care system, reflected in the federal budget through Medicare, Medicaid and the VA. But Gerson doesn’t even suggest continuing to challenge the drug, hospital and medical complexes that have succeeded in driving US costs per capita almost twice that of other industrial countries. He focuses instead simply on Medicare, but argues that “Medicare reform — the topic of intense, ideological debate — is a political nonstarter.” (more…)

Dave Johnson

By Dave Johnson
Fellow with Campaign for America’s Future

The terrible Gulf oil, West Virginia mining, Wall Street finance and government debt disasters all demonstrate the ongoing catastrophic and continuing results of conservative policies. Each of these is a direct consequence of letting corporate conservatives take over government and dismantle the regulatory and democratic protections that We, the People fought so hard for following the Great Depression — itself a previous demonstration of the failure of conservative policies.

How often have you had to hear that “the market” is the best way to run things? That is is “self-correcting?” That regulations are government “interference” or “meddling” in the market? That business/free markets/private sector always does things better or is more efficient than government? When you hear these you are experiencing the clash between a “one-dollar-one-vote” free market system — as we had before the Teddy Roosevelt progressive era and the Franklin Roosevelt New Deal — and “one-person-one-vote” democratic, We, the People system that brings the benefits of our economy and our country to the most people. But because of the power of money and marketing most people are hearing only one side of an ongoing argument between the wealthy few and the broad masses of working people.

For decades we have heard these pro-market, anti-government arguments repeated over and over and over and over and over and over. Big corporations have a lot of money to buy a big megaphone, so you hear that government is bad, business is good and the people ought to just keep their noses out of the marketplace and stop telling businesses how to do things. You hear that taxes are bad, “hurt the economy,” “cost jobs,” “take money out of the economy,” “just get passed through to customers anyway” and a million similar great-sounding slogans that fall down under minimal evaluation. They have been repeated over and over, until we forgot why we had fought so hard for strong government regulations and high taxes at the top.

After the disaster of Nixon the country learned about cracks in our democracy that let big money get their nose under the tent. But after Watergate we didn’t plug all of the leaks, and big money got into the tent anyway. They used their position to give themselves more power, and used that power to give themselves even more, etc. and now we have a system that is corrupted absolutely.

So with the conservative government of Reagan and then later under the all-out anti-government conservative administration of George W. Bush we have had the opportunity of seeing just what happens when these “free market” ideas are given free reign to replace democracy. Anti-government zealots were put into positions inside the government and used that power to take apart the protections that We, the People had painstakingly built.

Taxes were cut to “defund” government in order to “starve the beast.” The strategy was create huge deficits so the public would later demand cuts in government benefits. In the meantime the deficits would be used as an excuse to cut government oversight, inspections and enforcement of rules restricting the activities of big corporations. But all they did was create huge deficit that added up to massive debt.

Katrina was the first clear, public demonstration of the governing offered by conservatives. When they talked about replacing progressive ideas of “we’re in this together” and “watching out for each other” with “personal responsibility” they meant it. And the country saw what that meant to real people in real trouble.

More recently we have been hearing about disaster after disaster and catastrophe after catastrophe, all caused by businesses running out of control, aided by conservative government that relaxed or just stopped enforcing regulations and laws. Each catastrophe is beyond the scope or willingness of private businesses to repair, requiring public intervention, at great cost. (But never any suggestion of “clawback” — or getting back the profits that were made while creating the catastrophe.)

We all certainly know about the Wall Street financial crisis caused by the big banks and insurance giants. We heard about the SEC ignoring warnings about Bernie Madoff and Goldman Sachs and all the others. We’ve seen hearings about the things that WaMu was doing, and loans going to people who couldn’t read, and brokers making up incomes on “liar loans” and ratings agencies giving top ratings to “designed to fail” bond deals that investment banks and hedge funds had put together so they could make huge “swap” bets against them when the loans went under… The government, under control of “free market” conservatives looked the other way the whole time.

They brought down the economy of the whole world, requiring government bailouts that added up to more money that has been spent by our government in the history of the country. And now they are fighting tooth and nail to keep We, the People from passing financial reforms to bring Wall Street back under control.

Just recently there was the West Virginia mining disaster caused by deregulation, sweet deals between the company and regulators and lack of enforcement. The CEO of the Massey Energy had literally bought himself a judge, who then voted in favor of Massey Energy. Corrupted absolutely, 29 dead later.

And now, the huge, huge catastrophe in the Gulf.

This is the Reagan Revolution coming home to roost, and I will be writing about the terrible price we are paying and will be paying for a long time for the failed experiment in conservative ideology.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. Sign up here for the CAF daily summary.

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Johnson also is a fellow at the Commonweal Institute and a Senior Fellow at the Institute for the Renewal of the California Dream.

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Follow Dave Johnson on Twitter: www.twitter.com/dcjohnson

Robert Borosage

By Robert L. Borosage
Co-Director of the Campaign for America’s Future

Evan Bayh abruptly announced he was quitting the Senate days before the filing deadline for his Senate seat, without notice to his constituents, to his colleagues, to his party’s leaders or to the White House. He deprived the Democratic voters in Indiana who had voted him into office of the opportunity of choosing their own nominee. Nice work.

So naturally, the pundits are celebrating Bayh as a “good and thoughtful” person, a moderate appalled at the partisanship that has gridlocked the Senate. Perhaps, muses the Washington Post‘s Ruth Marcus, his departure will be the “wake-up call” the Senate needs to work together once more.
Who could argue with Bayh’s complaint? The Senate is dysfunctional. Bitter partisanship divides Washington. Politicians spend their lives raising money, as Bayh with some $13 million in his campaign account can attest.

But absent from this celebration of a departing hero is even a fleeting glance at substance. What has Evan Bayh been championing with his bipartisan common sense? Has he had any success?

The harsh reality is that Bayh has been wrong about virtually everything. And the country suffers not because partisanship blocked action, but because the establishment consensus got too much of his agenda enacted.

Bayh supported the catastrophic invasion of Iraq. He joined the bipartisan celebration of banking deregulation. He favors more military spending. He favored tax breaks for the wealthiest Americans in an age of Gilded Age inequality. He was an advocate of corporate free trade policies that encouraged multinationals to ship jobs to a mercantilist China willing to subsidize them. He’s a champion of bipartisanship — bipartisan folly.

Even in his departing, he got it wrong. Bayh announced on CBS’s Early Show that he was looking for a job in the private sector because “If I could create one job in the private sector by helping to grow a business, that would be one more than Congress has created in the last six months,” This echoes the Republican assault on the recovery plan as summarized by newly elected Senate Scott Brown of Massachusetts, that the stimulus plan “didn’t create one new job.”

Republican spinmeister Frank Luntz would be proud. These are great sound bites. They play to people’s anger about jobs, the economy, Wall Street, the bailout, the deficits. But they are both untrue and silly. There is no serious economist, right left or center, who does not accept that the recovery plan generated or saved nearly two million jobs – and forestalled what would have been a far worse downturn, if not a depression. As David Leonhardt summarizes in the New York Times today:

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

The reality — as Martin Wolf of the conservative Financial Times once more details, the recovery act was too small, not too large – and too laden with ineffective top end tax cuts, rather than public services jobs and infrastructure spending that would put people to work. This, of course, was a reflection of Evan Bayh’s bipartisan labors, as he joined with a couple Republicans and the sainted Ben Nelson to cut the size of the recovery bill that passed the House, adding top end tax cuts and cutting spending on school repairs and the like, making it far less effective than it might have been.

Since then Bayh has been echoing the growing establishment clamor about deficits and debt. He has championed the notion of a bipartisan commission to report to a lame duck Congress to vote up or down on a package that would surely include cuts in Social Security and Medicare and tax increases. This is a classic example of Naomi Klein’s Shock Doctrine, of conservatives using a crisis to enact measures that would otherwise be politically unacceptable – and that force working families to pay for the failures of the elite. (to follow this issue, go to ourfuture.org)

It’s worth repeating, as Martin Wolf summarizes: In sort term, we need more, not less of a boost to the economy; deficits should be higher not lower, as government spending steps in while consumers recover from the loss of over $10 trillion in assets.

Once the economy starts moving, growing employment produces rising tax revenues, and lower spending on supports like unemployment and food subsidies will erase much of that short-term borrowing. In the long term, our unsustainable deficit projections are driven almost entirely by our broken health care system. If the US had the German health care system — or spent the same percentage of GDP as they do on health — we’d have better health, and a surplus as far as the eye can see.

Bayh’s complaint about Washington gets some things right. Washington would be a better place were there more civility. The Senate would be functional if it would adopt majority rule. It would be far better if legislators would work together than try to do each other in. Money politics corrupts the Congress. But with all that, we should not forget about policy. The substance of Evan Bayh’s bipartisan policies that were enacted helped get us into the mess we are in, and are making it harder to get out of it.

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Robert Borosage and Campaign for America’s Future Co-Director Roger Hickey are co-editors of the book, The Next Agenda: Blueprint for a New Progressive Movement.

Dave Johnson

 By Dave Johnson
Fellow with Campaign for America’s Future 

Conservatives claim that President Obama “tripled the deficit” and point to the huge 2009 budget deficit as proof. The fiscal-year 2009 deficit, as reported in October was, indeed, about triple the prior year’s borrowing. But the 2009 budget was the last budget year of the prior, conservative administration. It is just one more demonstration of the failure of conservative policies.

Basic math: A budget year that ends 8 months into a president’s first year wasn’t that president’s budget.

Yet we hear, over and over, that “Obama tripled the deficit.” Recently, when President Obama spoke at the Republican caucus retreat, Rep. Jeb Hensarling of Texas said that Obama had “tripled the deficit.” A CNN fact check addresses this,

Obama was essentially correct when he said he inherited a budget deficit of $1.3 trillion. Though the budget deficit for 2008 was a then-record $458.6 billion, the CBO issued a projection in January 2009, just days before Obama took office that the budget deficit would reach $1.2 trillion that year, before the cost of any new stimulus plan or other legislation was taken into account.

Don’t believe me? See the conservative Cato Institute on this: Don’t Blame Obama for Bush’s 2009 Deficit | Cato @ Liberty,

Listening to a talk radio program yesterday, the host asserted that Obama tripled the budget deficit in his first year. This assertion is understandable, since the deficit jumped from about $450 billion in 2008 to $1.4 trillion in 2009. As this chart illustrates, with the Bush years in green, it appears as if Obama’s policies have led to an explosion of debt. [chart]. . . But there is one rather important detail that makes a big difference. The chart is based on the assumption that the current administration should be blamed for the 2009 fiscal year. While this makes sense to a casual observer, it is largely untrue. The 2009 fiscal year began October 1, 2008, nearly four months before Obama took office. The budget for the entire fiscal year was largely set in place while Bush was in the White House.[corrected chart]

Please click through to see the charts. And then look at Cato: Who’s To Blame for the Massive Deficit? for an even better explanation,

What about the so-called stimulus, they will ask, with its $787 billion price tag? Or the omnibus fiscal-year 2009 appropriations bill? And how about Cash for Clunkers and Obama’s expansion of the children’s health insurance program? Didn’t these all boost spending in 2009?The answer is yes. But these boondoggles amounted to just a tiny percentage of FY2009 spending — about $140 billion out of a $3.5 trillion budget — as the pie chart nearby illustrates.

Here are some examples of how this propaganda is applied. Keep in mind as you read these and look at the charts that the 2009 budget was Bush’s last budget, and began before Obama even took office.

Heritage Foundation: Bush Deficit vs. Obama Deficit in Pictures. Look at how the colors on the chart trick you into thinking that 2009 is an Obama budget year. This is just outright deceit.

Here is Heritage directly labeling the 2009 budget as Obama’s in a chart.

Here is a similar use of deception in charts, by right-wing blogs.

More examples: Federal budget triples under Obama – yes TRIPLES, and After Tripling The Deficit, Obama To Try And Create Jobs With More Government Spending, and Obamanomics: Deficit Tripled in One Year

Fox News: Obama Triples Budget Deficit to $1.4 Trillion Fox changed the headline but here is it as it appeared:

Here’s a good one, using a Heritage propaganda chart: Obama’s Tripling of the National Debt in Pictures

The right’s noise maching is good, though, there are 27,000 websites listed if you search for “obama tripled the deficit” in quotes.

Conservative policies since Reagan have led to massive debt. Don’t let them trick you by changing the colors on a chart.

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Johnson also is a fellow at the Commonweal Institute and a Senior Fellow at the Institute for the Renewal of the California Dream.

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Follow Dave Johnson on Twitter: www.twitter.com/dcjohnson

Robert Borosage

By Robert L. Borosage
Co-Director of the Campaign for America’s Future

President Obama is sensibly focused on jobs, unveiling a new initiative yesterday in the wake of the jobs summit. Elements included everything from new infrastructure spending to “cash for caulkers,” tax breaks for weatherizing homes, as well as aid to cities, states and the unemployed. The president suggested that the $200 billion recouped from the banks in the TARP program could be used to both to reduce the deficit and help finance the initiative.

The president’s speech was masterful. But what was left out of the speech was, in many ways, more telling that what was included.

1. Size Matters

The president made no mention of the size of his program. Reports range from some $70 billion to $200 billion. This leaves the House leadership with the responsibility to insure the program is big enough to do the job.

And they should think big. We’ve lost over 7 million jobs; 15 million are unemployed. States and localities are facing staggering deficits over the next year, with an estimated 900,000 jobs at risk. Foreclosures continue. Consumers and businesses are cutting back. In fact, for all the talk of deficits, the nation actually experienced no increase in total debt over the last year, as the rising federal deficit was more than matched by the reduced borrowing of consumers and businesses.

The first recovery plan staved off a far worse collapse. And the latest monthly report suggests that we’re finally hiring nearly as many people as we’re firing (due to rising public sector employment). But zero job growth is not a victory. It takes over 125,000 new jobs a month simply to keep up with population growth. Economist Jamie Galbraith notes that to return to the levels of employment needed to generate rising incomes, we’ll need 250,000 new jobs a month for five years.

So go big. $100 billion or more for states and localities; 100 billion for extending unemployment and food stamps for the victims, 50 billion a year for infrastructure projects, 40 billion a year to create a million public service jobs, plus opening up loans to small and medium sized businesses, plus the inevitable tax cuts and credits — to senior, for weatherization, for small businesses — Congress should be considering, as Paul Krugman suggests, a several hundred billion dollar program over two years.

This will elicit screeds about deficit spending, but the president has this right. If you want to get the deficit down, the first priority is to get people working, earning money, paying taxes, and not drawing on government aid. In his words:

Now, there are those who claim we have to choose between paying down our deficits on the one hand, and investing in job creation and economic growth on the other. This is a false choice. Ensuring that economic growth and job creation are strong and sustained is critical to ensuring that we are increasing revenues and decreasing spending on things like unemployment insurance so that our deficits will start coming down.

Once people are back to work and business is beginning to invest, we can deal with the remaining deficits. And most of the red ink projected over time is caused by our broken health care system and its soaring costs that must get fixed.

Size matters, but not to the party of no. Republicans will howl about deficits whether Democrats spend $7 million or $700 billion. People don’t like deficits, but ask them to choose — jobs programs or deficit reduction, and a large majority choose the former. The key is to put people to work. The last recovery program helped, but it was too small. And Democrats are paying a not undeserved price for an economic program that is producing million-dollar bonuses on Wall Street but too few jobs on Main Street. It is time to be bold, not cautious about jobs.

2. Why not public service?

Obama’s agenda included many of the items detailed by progressives with one glaring exception: there was no mention of direct public service jobs. No modern day WPA that Roosevelt created; no CETA employment project that the last liberal president, Richard Nixon, championed. With long term unemployment at record levels, and joblessness among young people in cities simply devastating, progressives in the Congress should push hard for direct public service jobs — both an expansion of existing programs like AmericaCorps, and the creation of a new Urban and Green Corps to put people directly to work on work that needs to be done. For example, legions could be gainfully employed in taking down or fixing up abandoned houses, turning empty lots into mini-parks, etc. They would gain the benefits of work, learn skills and the society would benefit. They could be paid at prevailing wage scales to avoid undermining current public workers.

3. Ideas Matter

In his speech, the president returned to his vital theme — that we can’t go back to the old economy that was based on booms and busts, finance capturing 40% of the profits, people and the nation living beyond their means, racking up more and more debt. He took a shot at Republicans who ran up deficits with wars abroad and top end tax cuts at home when the economy was growing and now object to them to help people survive after they drove us off the cliff. With Republicans trying to pin the economic mess on Obama, it is vital that the president take them on.

But here’s how the president described why we got in that fix:

In the end, the economic crisis of the past year was not just the result of weaknesses in our economy. It was also the result of weaknesses in our political system, because for decades, too many in Washington put off the hard decisions. For decades, we’ve watched as efforts to solve tough problems have fallen prey to the bitterness of partisanship, to prosaic concerns of politics, to ever-quickening news cycles, to endless campaigns focused on scoring points instead of meeting our common challenges.

Well. No doubt Washington is petty and partisan, with endless campaigns. But in fact, it wasn’t “putting off hard decisions” that drove us off the cliff. It was conservative ideology implemented into policy. George Bush got things done — they just turned out to be ruinous. Top end tax cuts squandered budget surpluses, and contributed to Gilded Age inequality. Scorn for regulation and government gave bankers multi-million dollar personal incentives to gamble recklessly, while gutting enforcement of everything from clean water to labor laws. “Free trade” policies — defined by multinational banks and corporations — shipped good jobs abroad, while providing cheap money to fuel the housing bubble. Under Bush, the special interests ruled, plundering taxpayers for subsidies — for big oil, for Phrma, for agribusiness. Privatization opened up new areas for plunder, with Halliburton providing the poster child. Fundamental challenges — like soaring health care costs, catastrophic climate change, a disintegrating infrastructure — were ignored in the confidence that the market would eventually work things out. It wasn’t gridlock that drove us off the cliff. It was, as Alan Greenspan admitted, an ideology that was simply wrong. It wasn’t inaction that brought us to grief. It was action going in the wrong direction.

This isn’t an academic exercise. Americans will be given a choice in the elections next year. Go back to the old policies that drove us into this mess, or stay on the course Obama has charted to dig out of it. Republicans, increasingly purged of any moderate voices, will blame the economy on Obama, and renew their old mantra of smaller government, lower taxes, less regulation. They won’t accuse Obama of inaction; they’ll accuse him of going the wrong way. Democrats will have to remind people of exactly what put us into this hole. It wasn’t gridlock. It was conservatives having their way and bringing us down. There is no person better able to make this argument than the president. And he should be pounding on it — just as he focuses on jobs — from this day forward.