I wrote my initial post in such a hot rage over the proposal to cut Social Security and Medicare benefits that I didn’t take the time to edit my blog post (sorry about those strange sentence structures), or take the time to look at the details of the proposal. So now that I have calmly taken some time to do that, I have to admit that I was wrong: this thing is even worse than I originally thought, and I way understated the problems with it. The co-chairs and staff found every conceivable way to screw the middle class in ways big (very big) and small, but barely nicked the bankers who caused the meltdown of the economy, or the wealthy whose massive tax cuts ended the big budget surpluses as far as the eye could see coming out of the Clinton years. Look at some of the different ways middle class and poor people will be gauged by this proposal (and I am probably missing some):
Raises the retirement age for Social Security and Medicare to 69.
Cuts Social Security benefits.
Ends the mortgage tax deduction.
Ends the tax deduction for workers’ health benefits.
Freezes salaries for federal workers for 3 years.
Establishes co-pays for veterans at VA health services.
Raises fees to visit the national parks and the Smithsonian.
Merges the Small Business Administration into an agency (Commerce) that has always prioritized helping bigger businesses, and cuts their budget.
Eliminates the Office of Safe and Drug Free Schools. (more…)
Have conservatives learned anything from that experience? Apparently not.
The conservative movement’s intellectual leaders at The Heritage Foundation are attacking the Obama administration for … no, I’m not kidding … using FEMA too much.
In the continuing (over)reaction to the failures of Hurricane Katrina five years ago, the Federal Emergency Management Agency (FEMA) once again “leaned forward” in anticipation of a hurricane…
…Since his inauguration, President Barack Obama has issued 195 FEMA declarations despite the fact that not a single hurricane has hit the United States in that time span and only one minor earthquake has occurred. In less than two years, FEMA under President Obama has issued more declarations than the Eisenhower (106), Kennedy (52), Johnson (93), Ford (101), Carter (176), and H.W. Bush (174) Administrations and only slightly fewer than the Nixon (212) and Reagan (225) Administrations did throughout their entire presidencies…
…As we have long argued, this country needs to get FEMA out of the routine natural disaster business and reserve its capabilities for catastrophic events.
There’s a lot of nonsense there to break down. (more…)
Deepak Bhargava
Executive Director of the Center for Community Change
The debate in Washington about deficits has lost touch with reality. The emerging conventional wisdom inside the beltway has taken aggressive job creation strategies off the table because of the deficit crisis. This “eat your spinach” approach is bad politics and disastrous economics guaranteed to produce not only a longer, deeper period of economic hardship but also, ironically, higher deficits. The Great Depression and John Maynard Keynes taught us a fundamental lesson: when you’re in a deep economic tailspin, the private sector won’t get the economy moving, only aggressive and sustained action by government can turn things around. The solution to the unemployment crisis and the deficit crisis is one and the same: a much greater investment by the federal government in creating jobs and helping struggling families. So why isn’t Washington listening? Republicans are playing politics and too many Democrats are running for cover.
For eight years during the Bush Administration, we’ve seen out of control spending that swung our $236 billion surplus to a $2.5 trillion deficit. Conservatives were nowhere to be found on the deficit issue when it came to tax cuts for the wealthy, George Bush’s bailout of Wall Street or the Iraq war. Check out this chart that shows that the recovery act is a tiny part of the deficit puzzle.
Source: CBPP analysis based on Congressional Budget Office estimates via newsreview.com.
The lion’s share of the blame goes to Republican policies of tax cuts and wars, together with the effect on revenue of the recession that was itself caused by deregulation and the casino economy. The Republicans of today remind me of Captain Renault in Casablanca who said he was “shocked, shocked!” to find that gambling was going on in Rick’s Cafe Americain right before receiving his winnings. (more…)
By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist
As the planet’s economy keeps stumbling, the phrase “worst recession since the Great Depression” has become the new “global war on terror” – a term whose overuse has rendered it both meaningless and acronym-worthy. And just like that previously ubiquitous phrase, references to the WRSTGD are almost always followed by flimsy and contradictory explanations.
Republicans, who ran up enormous deficits, say the recession comes from overspending. Democrats, who gutted the job market with free trade policies, nonetheless insist it’s all George W. Bush’s fault. Meanwhile, pundits who cheered both sides now offer non-sequiturs, blaming excessive partisanship for our problems.
But as history (and Freakonomics) teaches, such oversimplified memes tend to obscure the counterintuitive notions that often hold the most profound truths. And in the case of the WRSTGD, the most important of these is the idea that we are in economic dire straits because tax rates are too low. This is the provocative argument first floated by former New York Gov. Eliot Spitzer in a Slate magazine article evaluating 80 years of economic data.
“During the period 1951-63, when marginal rates were at their peak – 91 percent or 92 percent – the American economy boomed, growing at an average annual rate of 3.71 percent,” he wrote in February. “The fact that the marginal rates were what would today be viewed as essentially confiscatory did not cause economic cataclysm – just the opposite. And during the past seven years, during which we reduced the top marginal rate to 35 percent, average growth was a more meager 1.71 percent.”
Months later, with USA Today reporting that tax rates are at a 60-year nadir, Secretary of State Hillary Clinton told a Brookings Institution audience that “the rich are not paying their fair share in any nation that is facing (major) employment issues … whether it is individual, corporate, whatever the taxation forms are.” (more…)
Trade is good. Honest, free and fair trade brings prosperity to everyone involved. Unfortunately the kind of one-sided, exploitative trade deals that have been negotiated in the past might have made a few elites very rich in the short term but threaten to impoverish everyone else. The trick is negotiating better “We, the People” outcomes rather than “shut up and take it or we’ll move your job out of the country” outcomes that allow the wealthy elite to set working people here against working people there.
President Obama is spot on when he says we need to balance our trade to help get the country back on a sound financial footing. Of course one key to this is breaking our oil-import addiction. Another is how we resond to the mercantilist nations of Asia.
Which brings us to KORUS, the Korea-US Free Trade Agreement. As negotiated by Bush, it is typically one-sided and doesn’t sufficiently protect American workers or companies. When the AFL-CIO and Ford Motor Company want some work done on a treaty, some work needs to be done on the treaty.
The political pendulum of time was swinging more to the right when we ended up with George W. Bush as President. After that we got a person that was supposed to be for workers and came as a Democrat but a moderate (Blue Dog Democrat). He was none other than William Jefferson Clinton. He changed the face of the Democratic Party, which was a party that represented the working class. He made such statements as “The era of big government was over.” That’s when I knew things were really going to the radical right wing.
I always felt government was good as long as they counteracted the power of the corporate interests in favor of the consumers and workers. Clinton brought us NAFTA and other free trade deals, and we really started losing our manufacturing base. They opened the door for those countries to flood us with foreign products, thus creating a huge trade imbalance.
Incidentally, most of the countries to which American corporations moved were paying less than subsistence wages, had no unions, no consumer rights, etc. So free trade did not lift those people out of their desperate economic and social conditions.
One good thing about Clinton, though, was he did leave a surplus on the books. After his administration, we had ended up with the most Radical Right Wing Government ever under George Bush#2. They created a policy of deregulating all business. After eight years of Bush and Carl Rove, the country was bankrupt with a huge deficit! We all know the economic collapse that Bush left – a near worldwide depression which we still are suffering from.
Michael Cmero Sr. Carmel, N.Y. Retired Railroad Worker
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By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist
After Japan’s 1941 attack on Pearl Harbor, Franklin Roosevelt delivered a national address making eight references to the “sacrifice” that would be needed in the impending war and three mentions of the “self-denial” we would have to endure.
“Every single person in the United States is going to be affected,” Roosevelt said. “(Business) profits are going to be cut down to a reasonably low level by taxation … (Americans) will have to forgo higher wages … All of us are used to spending money for things that we want, things, however, which are not absolutely essential. We will all have to forgo that kind of spending.”
For its honesty and purpose, the speech remains the shining example of leadership. For its bravery in telling painful truths the country needed to hear and for Americans’ subsequent rise to the challenge, the address today stands as a sad commemoration of a tragically lost ethos.
That is the only conclusion to draw when comparing Roosevelt’s clarion call to those following the last decade’s Pearl Harbor-like calamities. Rather than being encouraged to sacrifice or accept self-denial in the face of emergency, we are now instructed to simply embrace our inner hedonist.
That’s no exaggeration. After the 9/11 attacks, President Bush told us not to prepare for austerity measures in the name of the common good. Instead, he exhorted citizens to “do your business around the country, fly and enjoy America’s great destination spots — go down to Disney World in Florida, take your families and enjoy life the way we want it to be enjoyed.” Then he gave us tax cuts and wars whose costs were rung up on the national credit card and passed on to future generations.
The same aversion to sacrifice now defines the response to the ecological Pearl Harbor on America’s Gulf Coast. In his first press conference since the oil spill, President Obama only briefly noted that the drilling at the center of the disaster highlights “the urgent need for this nation to develop clean, renewable sources of energy” and get off petroleum. But he avoided suggesting that this need requires any collective effort, abstinence or forfeiture.
“Americans can help,” he said, “by continuing to visit the communities and beaches of the Gulf Coast.”
Put in bumper-sticker terms, FDR’s “Profits are Going to Be Cut” and “Forgo Higher Wages” have become Bush’s “Go Shopping” and Obama’s “Go Sunbathing” — and the question is why?
One obvious answer is presidential shortsightedness.
Bush characteristically refused to believe sacrifice is ever necessary, even during war. Obama, meanwhile, surely knows the Gulf disaster warrants sacrifice, but he cravenly refuses to discuss that fact for fear of being lampooned as a sweater-clad Jimmy Carter.
But, then, let’s be honest — when it comes to difficult lifestyle changes that Pearl Harbor-sized crises demand, many of us are as willfully ignorant and plagued by denial as Dubya. And truth be told, had Obama asked us to do something — anything! — more than have fun in the sun, many Americans wouldn’t have praised him as a new FDR; many indeed would have berated him as Carter incarnate.
Thus, as easy as it is to blame two flawed presidents for eschewing FDR-style leadership, we haven’t seen that leadership, in part, because we don’t seem to want it. And we don’t want it because we’ve stopped valuing the concept of shared sacrifice.
That’s the true change since the original Pearl Harbor attack — and it’s a crying shame because while trips to Disney World or the beach are certainly fun, history suggests that genuine sacrifice will be the only way to solve our most pressing problems.
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David Sirota is the bestselling author of the books “Hostile Takeover” (2006) and “The Uprising” (2008). E-mail him at ds@davidsirota.com or follow him on Twitter @davidsirota. This is his latest column for Creators Syndicate.
Cognitive dissonance in the Republican Party is evident in the way they appear to believe that benefits or actions they would deny to other people are perfectly all right when only Republicans receive them. An excellent example will be found HERE. Two Republicans, Mark Sanford and Andre Bauer currently serve as Governor and Lt. Governor of South Carolina. We are all well aware of Mark Sanford’s notorious shenanigans, but Andre Bauer has been eclipsed by the Governor, as is often the case with lieutenant governors. (Quickly: do you know who is the lieutenant governor of your state?)
So Andre Bauer, who was himself a recipient of free lunches, would deny them to other people’s children. He blamed his speech on his grandmother who he claimed taught him that selfishness was a virtue. Isn’t that a little like, “the devil made me do it?” And he was reportedly twice stopped for speeding, once for driving over 100 mph in a 70 mph zone. He said he didn’t realize how fast he was going! That is reckless and irresponsible behavior. It is a driver’s duty to know how fast the car is going. Mindless control of one’s car is akin to mindless control of one’s mouth and mindless performance of duties in political office.
Once again we are reminded of Colin Powell’s expressed regret that we lack a sense of shame. Regardless of which political party we belong to, we need to resolve that the candidates we nominate to run and the leaders we elect will exemplify the highest virtues in their personal and public conduct; that is what leadership should be. How can we expect our children to grow up respecting the law when they see that disrespect for the law and for the rights of others and for personal discipline apparently leads to some measure of “success?” And let us never forget that we are known by the company we keep. That is why I left the Republican Party, because I didn’t wish to be identified with the likes of Richard Nixon, Spiro Agnew, George W. Bush, Dick Cheney and other lawbreakers.
In all honesty, I supported Richard Nixon in his first run for the presidency, believing him to be an exponent of Quaker values. But I have long admitted that was my error, and I have since learned to be more selective. I just wish that everyone else would be as diligent in their appraisal of political candidates.
Leo Toribio
Pittsburgh, Pa.
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They came first for the Communists, And I didn’t speak up because I wasn’t a Communist. Then they came for the Jews, And I didn’t speak up because I wasn’t a Jew. Then they came for the trade unionists, And I didn’t speak up because I wasn’t a trade unionist. Then they came for the Catholics, And I didn’t speak up because I was Protestant. Then they came for me, And by that time no one was left to speak up.
–Martin Niemoeller
China is attacking the U.S. with a stealth weapon of mass economic destruction – unfair trade. U.S. corporations – and China – that profiteer from it prefer to label this “free trade.”
Butindustrial carnage is the only way to describe the devastation done to the U.S. economy by an accumulatedtrillion dollar trade deficit with China, the destruction of U.S. jobs by off-shoring them to China, and the disintegration of the U.S. industrial sector that is foreclosing America’s ability to support itself or to manufacture weapons to defend itself.
The United Steelworkers union is challenging China and the profiteers. It has demanded imposition of duties and tariffs on imported Chinese products – not because the U.S. can’t compete but because China cheats.
We’ve watched our members lose their jobs as steel mills idled, paper plants closed, and tire factories shuttered. In this war, China came for our jobs. Virtually no one spoke up for displaced blue collar workers. Perhaps you don’t wear a blue collar. A white one will prove no special shield. The Chinese will come for your job too.
In this struggle, it is crucial to understand that so-called free trade isn’t some lofty capitalist ideal. The U.S. engages in “free trade” with the Chinese because they hold $1 trillion in debt over our heads, an obligation they know we can’t pay. We shrink in fear of them. They’re world class bullies. They can do whatever they please. And they do. They violate international trade laws by which we abide. That’s why their stuff is so cheap. The one factor on which the price difference always is blamed – labor costs – is only the tiniest fraction of it.
Labor violations are part of the cheating. The National Labor Committee and others, including reporters from the New York Times, have documented exploitation of Chinese workers that can only be described as modern slavery. We stand in solidarity with these workers and condemn these atrocities that include very young teenagers kept in locked buildings with caged windows where they are forced to labor 14-hour shifts under grueling conditions, but find it impossible to make money or to amass the “exit fee” required to leave. They include children, women, and occasionally men kidnapped and forced to work in brick kilns, coal mines, and sweatshops in the Chinese hinterlands, with no payment other than gruel and a sleeping mat. When Chinese companies treat humans this way, they realize a competitive advantage over American firms that routinely obey humanitarian laws.
China is also one of the most dangerous places in the world to work and live because corporations fail to provide safety equipment for workers, such as dust control devices, and refuse to protect the environment with pollution control equipment. Both practices are profitable for Chinese corporations, particularly when competing with U.S. firms, which must abide by environmental and worker health and safety regulations.
Much more significant, however, are other deliberate Chinese interventions in the market, such as the undervaluation of its currency, subsidization of its manufacturing, counterfeiting, forced transfer of American technology, and refusal to give American companies access to Chinese markets with licensing restrictions, complex regulations and local content rules.
China gives breaks to manufacturers on land, rent, energy and water. Manufacturers may receive bank “loans” they know they’re not required to repay. China also exempts certain industries from income taxes and gives tax rebates on exports.
China’s deliberate currency undervaluation works as a subsidy as well. The U.S.-China Economic and Security Review Commission explains it this way: “China’s undervalued currency encourages undervalued Chinese exports to the U.S. and discourages U.S. exports because U.S. exports are artificially overvalued. As a result, undervalued Chinese exports have been highly disruptive to the U.S.”
China cheats. Free trade is a myth. The American worker doesn’t need special treatment. We’re the most productive in the world. We just seek fair competition. We want fair trade. The USW wants trade rules enforced.
So the union demands it. Repeatedly, we’ve won cases seeking imposition of anti-dumping and anti-subsidy duties on unfairly traded imports from China to protect our members. There was the glossy paper case in 2007 and the lightweight thermal paper case in 2008. The USW and four U.S. stainless pipe producers won a final order from the U.S. International Trade Commission in February on dumped Chinese welded austenitic stainless steel pressure pipe. Just two months later, the USW joined seven U.S. companies in seeking duties on imported Chinese welded and stainless steel pipes used in oil and gas extraction because of massive Chinese government subsidies.
But it’s the tire case that’s causing the commotion. That’s because the USW filed it under “Section 421,” which is supposed to allow the U.S. to combat unfair and damaging surges of particular Chinese imports. China agreed to abide by Section 421 until 2013 in exchange for support from the U.S. when it sought to join the World Trade Organization in 2001.The advantage of Section 421 is that the process is quicker that a typical trade case.
U.S. companies won four Section 421 cases previously, including the McWane Inc. ductile iron waterworks fittings case in 2003, in which the USW testified. The International Trade Commission recommended in the McWane case and the three others that former President George W. Bush penalize Chinese imports. He did nothing – refusing to protect U.S. industry.
But it’s a new day, with a new president. Thus the ruckus. If President Barack Obama adopts the recommendations of the International Trade Commission to use Section 421 to shield American tire manufacturers from unfair trade and preserve American jobs, more cases will quickly follow. That is what China and the corporate profiteers fear.
The USW filed the Section 421 tire case to defend the 15,000 rubber workers who we represented across North America. And we stood alone. No one spoke up for the tire workers. These U.S. workers watched during the past five years as Chinese tire imports increased 215 percent, making China the single largest source of consumer tire imports in the U.S. In that time, 5,000 U.S. rubber workers lost their jobs. Another 3,000 know they’ll get the boot by year’s end.
America’s increased trade deficits with China since it entered the World Trade Organization have cost 2.3 million workers their jobs or job displacements, according to The China Trade Toll by Robert E. Scott of the Economic Policy Institute.
Most were manufacturing jobs, but, among them, Scott reports, were 127,710 professional, scientific and technical services workers. There were 66,986 managers of companies and enterprises. They even included 13,141 arts, entertainment and recreation workers.
Author of “The Uprising: An Unauthorized Tour of the Populists Revolt”
When they write their retrospectives about the era that ended with the 2008 election, economic historians will undoubtedly credit George W. Bush with almost single-handedly moving the country to embrace extremist conservatism. It’s a simple storyline: Cowboy president drives bewildered American herd over laissez-faire cliff. What such reductionism will ignore, though, is what we must remember now: namely, that Congress also played a decisive role in the stampede.
As former House Republican leader Tom DeLay said, he and his colleagues deliberately started “every policy initiative from as far to the political right” as possible, so as to shift “the center farther to the right.” The formula emulated Franklin D. Roosevelt’s fabled admonishment to allies: “I agree with you, I want to do it, now make me do it.”
With Bush, congressional Republicans knew they had an ideological comrade in the White House. But they also knew he was confined by the (minimally) moderating desire for re-election and the (even more minimally) moderating limits of his national office. So, to reach their goals, conservatives had to compel their presidential friend to do what they wanted – and compel him they did. When Bush’s tax cuts and deregulatory schemes hit the Capitol, Republicans inevitably expanded them to fully achieve the right’s objectives.
Of course, that triumph was the country’s loss, as Republican policies thrust the political center off a conservative precipice and America into an economic freefall. And as we plummet, we are desperately groping for a lifeline.
If we are lucky and we end up snagging one that saves us – a huge if – it will be one that is strong enough to snap the center back from the conservative brink. This super-durable bungee cord must have the force of law, meaning it will be woven by Democratic legislators now exerting as much pressure on President Obama’s left as congressional Republicans focused on President Bush’s right.
When, for instance, Obama hedged on his promise to revoke $226 billion worth of Bush’s upper-income tax cuts, House Speaker Nancy Pelosi, D-San Francisco, pushed him to fulfill the pledge and put the money into programs that better guarantee job creation.
When Obama initially offered up a stimulus bill filled with discredited business tax breaks, Democratic senators forced him to back off. Reps. David Obey, D-Wis., and Jim Oberstar, D-Minn., then argued that the president’s proposed infrastructure investments were too small to boost the economy. That led House Democrats to increase Obama’s spending targets.
As stimulus negotiations continued, Rep. John Conyers, D-Mich., tried to add provisions letting courts renegotiate banks’ primary-residence mortgages so as to prevent more foreclosures. It’s a commonsense proposal: Judges already have the power to renegotiate vacation-home mortgages, and the New York Federal Reserve Bank says existing bankruptcy laws are exacerbating the foreclosure crisis. While Obama opposed the initiative out of fear that banking industry opposition might slow the underlying stimulus bill, Conyers’ effort ultimately made the president commit to supporting the reforms in future legislation.
Then there was the progressive reaction to Obama’s demand for more financial bailout money. Turning a routine committee hearing into a modern-day incarnation of the Great Depression’s Pecora Commission, Rep. Alan Grayson, D-Fla., upbraided a Federal Reserve official for refusing to disclose which banks are receiving taxpayer dollars. The spectacle was one of many that whipped the House into passing a bill attaching strings to the funds. Obama responded by committing to enact some of the restrictions by fiat.
At once complementary and adversarial, this intragovernmental squabbling probably makes the conflict-averse Obama uncomfortable. But the “make him do it” dynamic could finally bring the center of Washington’s political debate closer to the progressive center of American public opinion. Even more important, it is precisely what will help the new president avert an economic disaster.
David Sirota is the best-selling author of the books “Hostile Takeover” (2006) and “The Uprising” (2008).
