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The Real Fiscal Responsibility Today Pilot Project

This pilot project and the radio/video shows it will produce and place on the web is for everyone tired of hearing economic commentary from those who got everything wrong. For decades, the doctrine of "Fiscal Responsibility" interpreted as long-term deficit reduction and Government austerity has had a secure place in American politics. This doctrine is the economic equivalent of the medieval notion that patients must be bled to cure them of disease. And this truth is reflected in the economic history of the United States at least since 1976, when we first began to practice ideology-based austerity in its modern form by planning for deficit reduction and balanced budgets in order to decrease the debt-to-GDP ratio.

Yes, there were short periods of expansive GDP growth during the Reagan and Clinton Administrations, but when one compares job creation and growth rates across the decades, one can see from Table One, that new job creation and GDP growth during the 70s, 80s, 90s, and the first 10 years of this century don't compare to the 40s, 50s, and 60s of the 20th century. By comparison we've been experiencing a stagnant economy in varying degrees for more than 40 years now. Read below the fold...

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Are We An Oligarchy Yet?

Matt Stoller believes that the recent pre-publication release of a study by Martin Gilens and Benjamin I. Page doesn't support the idea that the United States is an oligarchy yet. He says:

A lot of people are misreading this Princeton study on the political influence of the wealthy and business groups versus ordinary citizens. The study does not say that the US is an oligarchy, wherein the wealthy control politics with an iron fist. If it were, then things like Social Security, Medicare, food stamps, veterans programs, housing finance programs, etc wouldn’t exist.

What the study actually says is that American voters are disorganized and their individualized preferences don’t matter unless voters group themselves into mass membership organizations. Then, if people belong to mass membership organizations, their preferences do matter, but less so than business groups and the wealthy.

Well, it's true that Gilens and Page never say that United States is an oligarchy, and perhaps it's also true that they don't believe it. But they do say this: Read below the fold...

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Did Canada's Middle Class Just Get More Affluent Than the US's, or Did that Happen Long Ago?

The New York Times and Dave Leonhardt's Upshot section made a big splash a few days ago by reporting on a study showing that the Canadian middle class had caught the US middle class in median income and likely surpassed it since. The study is based on an effort to measure median income per capita after taxes, and its results are presented as something truly significant.

However, I think the study is biased in that in median income per capita after taxes, it selected the wrong measure. What is needed is a measure of income or affluence that takes account of the value of cross-national variations in Government benefits delivered to the middle classes. Since the United States has lower taxes than most comparable nations, but delivers much less in safety net and entitlement benefits, it's pretty clear that the measure used in the study reported on by The Times overestimates the real median income of the US middle class in comparison with the middle classes of other comparable nations and provides a misleading impression of the relative affluence of the American middle class. Read below the fold...

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Peterson/CBO Beat for Austerity Goes On!

Recently, I've been writing about oligarchs advocating for entitlement cuts and austerity. I've discussed attacks on entitlement benefits for the elderly from Abby Huntsman (of MSNBC's The Cycle) and Catherine Rampell (a Washington Post columnist), both the children of well-off individuals. These posts have come in the context of the English language release of Thomas Piketty's Capital in the Twenty-First Century, and the more recent pre-publication release of a study by Martin Gilens and Benjamin I. Page using quantitative methods and empirical data to explore the question of whether the US is an oligarchy or a majoritarian democracy. They conclude:

”What do our findings say about democracy in America? They certainly constitute troubling news for advocates of “populistic” democracy, who want governments to respond primarily or exclusively to the policy preferences of their citizens. In the United States, our findings indicate, the majority does not rule -- at least not in the causal sense of actually determining policy outcomes. When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the U.S. political system, even when fairly large majorities of Americans favor policy change, they generally do not get it.”

With this as a backdrop, today I want to de-construct a recent statement by Michael A. Peterson, President and COO, of one of the centers of American oligarchy, the Peter G. Peterson Foundation (PGPF), and the son of the multi-billionaire Peter G. Peterson, commenting on the CBO's Report earlier this month, on its updated budget projections for 2014 - 2024. Read below the fold...

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More Misdirection from Rampell in the Service of Generational War

In my last post, I took issue with a recent column by Catherine Rampell, who tries to make the case that seniors haven't paid for their Social Security and Medicare because they “generally receive” more in benefits out of these programs than they pay into them. Rampell relies on an Urban Institute study to make her case. Since that post, she's offered another that replies to some of the questions raised by commenters on her earlier effort. I'll reply to that new post shortly, but first I want to present key points emerging from my analysis of Federal monetary operations in my reply to her earlier post. See that post for the full argument.

First, once Congress mandates spending, there is no way that the Treasury can be forced into insolvency or an inability to pay its obligations as long as it is willing to make use of all the ways it can cause the Fed to create reserve credits in Treasury spending accounts which can then be used for its reserve keystroking into private sector account activities that today represent most of the reality of Federal spending. Read below the fold...

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Misdirection: Rampell Views Entitlements Through the Generational War Lens

Some of the favored children of the economic elite who have a public presence, work hard in their writing and speaking to divert attention from inequality and oligarchy issues by raising the issue of competition between seniors and millennials for “scarce” Federal funds. That's understandable. If millennials develop full consciousness of who, exactly, has been flushing their prospects for a decent life down the toilet, their anger and activism might bring down the system of wealth and economic and social privilege that benefits both their families and the favored themselves in the new America of oligarchy and plutocracy.

Here and here, I evaluated Abby Huntsman's arguments for entitlement “reform,” and, of course, Pete Peterson's son, Michael fights a continuing generational war against seniors in pushing the austerian line of the Peterson Foundation. Now comes Catherine Rampell, who, in a recent column, sets forth the position that seniors haven't paid for their Social Security and Medicare because they “generally receive” more in benefits out of these programs than they pay into them.

I'll reply to all of the main points in Rampell's argument, by quoting liberally and then replying to the points she makes in each quote. She says: Read below the fold...

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Is the MSM Blackout on Inequality, Plutocracy, and Oligarchy Ending?

All of a sudden MSNBC cable commentators are talking about plutocracy and oligarchy. Surprisingly, the first occurrence of this I'm aware of was Chuck Todd, reacting on his Daily Rundown show to the spectacle of Republican candidates traveling to Vegas to seek funding from Sheldon Adelson and his group of hugely wealthy Jewish Republican donors. Todd began to explore the implications of that event. He seemed exercised, and more than the slightest bit upset, about its meaning for Democracy and used the words plutocracy and oligarchy. Andrea Mitchell also discussed it later and she, too, registered apparent dismay, while using the “p” and “o” words.

Chris Hayes has been on leave during this period, so we haven't heard from him about this. But Chris Matthews, the “oh so very slightly left-of-center insider” has been making very unfriendly noises about Adelson, the Kochs, and the Supremes, culminating today (April 3rd) with nasty references to plutocrats, oligarchs, and candidates, kissing oligarchs somewhere or other, on both his program and Al Sharpton's. Read below the fold...

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The Village Still Ignores the Most Important Point

In recent posts I reviewed two commentaries by Abby Huntsman on Social Security and other entitlements, also noting points made in other critiques of her narratives. Abby's commentaries are here, and here, and my critiques are here and here. The most important point I emphasized in my two rebuttals is that there are no fiscal solvency or sustainability issues related to Social Security, or other parts of the safety net, but that the issues involve only the willingness of Congress to appropriate entitlement spending, and either the removal of current constraints on Treasury to spend appropriations such as the debt limit, or the willingness of the Executive Branch to use its current legislative authority either to a) generate sufficient seigniorage from platinum coins to spend such appropriations; or b) use a type of debt instrument, such as consols, which aren't counted toward the debt limit.

The day before I posted my second reply to Abby Huntsman, Richard J. Eskow and WeActRadio posted this video clip from Eskow's radio broadcast. In his critique, Richard shows that Abby Huntsman's treatment of Social Security and entitlements is full of misleading information and hews closely to the narrative offered by Alan Simpson, Pete Peterson, and organizations supported by Peterson funding, and he calls for the MSNBC producers of “The Cycle” to issue statements correcting the facts, and to give Abby's co-hosts on The Cycle a chance to reply to her about social security. Read below the fold...

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When You Really Look, Financial Quicksand Turns Into Oligarchical BS

Abby Huntsman's first rant about entitlements soliciting generational warfare got a lot of pushback from defenders. I reviewed the main points made in defense of entitlements, and then added “the most important point of all” as well. Abby made a second try, however, this time singling out Michael Hiltzik's reply to her to respond to and adding a few more points, while withdrawing a bit from her claim that life expectancy has changed very much for seniors since the New Deal period. Hiltzik took issue with that one too. Let's review Huntsman's reply to Hiltzik by analyzing the MSNBC transcript of her second rant against entitlements.

Abby Huntsman:

. . . the need for entitlement reform. there was a firestorm of reaction. an article in the " l.a. times" went as far as to say i want to lead my generation into poverty. come on, man. this isn't about me. it's about the major problem.

Read below the fold...
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Envy or Honest Outrage?

(Updated)

Catherine Rampell offered a theory the other day, in a piece entitled: “Income inequality isn’t about the rich — it’s about the rest of us.” She says:

People don’t hate you because you’re beautiful. People hate you because they are getting uglier. . . .

And then later, she says:

Yes, anti-inequality rhetoric has grown in recent years. But it’s not the growing wealth of the wealthy that Americans are angry about, at least not in isolation. It’s the growing wealth of the wealthy set against the stagnation or deterioration of living standards for everyone else. Polls show that Americans pretty much always want income to be distributed more equitably than it currently is, but they’re more willing to tolerate inequality if they are still plugging ahead. That is, they care less about Lloyd Blankfein's gigantic bonus if they got even a tiny raise this year.

She proceeds to review polling data to show that this is so, and then advises the 0.1% that if they want to be left alone then “they should probably support policies that “promote the upward mobility of other Americans. . . “ such as Pell Grants, higher minimum wages, and early chidhood education. Read below the fold...

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The Most Important Point of All Was Ignored

MSNBC's right wing representative on The Cycle, Abby Huntsman, got a lot of pushback from Social Security defenders after her rant last week. They made points similar to the following in countering Huntsman:

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An Open Letter to Don Beyer, VA – 8th Candidate for Congress

My Congressman, Jim Moran, is retiring this year and his seat is up for grabs in the VA – 8th Congressional District. This is a solidly blue district made even more solid by the Republican gerrymander following their win in the disastrous elections (for poor people, for women, for the middle class, and for minorities) of 2010 in Virginia. So, the question is, which of the eleven candidates who are running in the primary will win it, and become the heavy favorite to win the Congressional election in November.

The heavy primary favorite is Don Beyer, a noted auto dealer in Northern Virginia, who has served as Lieutenant Governor twice, and also as Ambassador to Switzerland. My impression of Ambassador Beyer has been favorable. I have a friend who bought cars from him over many years and who had his Volvos serviced at his dealership all the while, and he had nothing but good things to say about the integrity of the service he received.

That said, however, and personal characteristics aside, I'd like Beyer to clarify his positions on the issues. So, I'm addressing this open letter to him. Read below the fold...

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Still Not Over: CPC Update

The Congressional Progressive Caucus (CPC) recently issued its “Better Off Budget” document as an alternative to the White House/OMB document, and the coming House budget document, a Republican/conservative alternative. The “Better Off Budget” has received enthusiastic evaluations from writers affiliated with the DC progressive community. Richard Eskow's recent treatment is typical and provides other reviews that are laudatory. These “progressives” clearly see the CPC budget as anything but an austerity budget. But is it, or is it not? Read below the fold...

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Executive Orders: A Fair Ranking of Presidents from Least Active to Most Active

Lately, Republicans have been riding the hobby horse of charging the President with being a dictator. Well clearly he is not that, or he would have had them imprisoned, or worse, a long time ago. On the other hand, the President's hands are far from clean when it comes to activities like illegal surveillance of Americans, drone strikes without due process, collusion of the Government with local authorities to repress Occupy exercising its rights of free speech and assembly, and failure to enforce the law with reference to torture of prisoners, and control frauds in the FIRE sector.Have I covered everything, or did I forget something?

Regardless, everything I've covered are anti-democracy activities that Republicans, apparently, have no problem with. On the other hand they're mightily concerned about the what they think is the President's “extremism” in increasingly relying on Executive Orders to get some of his objectives accomplished. Their faux outrage over this, centers around the claim that the President has issued an unusual amount of Executive Orders during his time in the Presidency. Read below the fold...

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An Even Better Way to Get Money Out of Politics

A couple of weeks ago, I posted on a simple solution to the problem of getting money out of politics. I said then:

If the election you're voting in is virtually a two candidate contest, then vote for the candidate, who, in combination with her/his supporters spends the least amount of money. In a virtual multi-candidate contest, do the same thing.
That's the proposal, in its simplest form. Its objective is to reverse the current race to the bottom in buying elections by ensuring that there would be a powerful incentive to start a race to the top to raise and spend as little money as possible in campaigns. That incentive is that if you spend too much you lose, pure and simple.

The other rationale for the rule is that the person who raises and spends the least amount of money for a campaign, will generally be the person who is “less bought” by wealthy people, financial interests, and large corporations. Eventually, if the rule took hold it would no longer be said of the Congress that “the banks own the place.”

Read below the fold...

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