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Elizabeth Warren: Better, But Not there Yet

letsgetitdone's picture

In her recent post-election piece “It's Time to Work on America's Agenda” Elizabeth Warren points out that the changes in Washington and in various States aren't changing the fact that

The stock market and gross domestic product keep going up, while families are getting squeezed hard by an economy that isn’t working for them.

Or to put it another way, it's not enough to have aggregate indicators going up. We also have to have shared gains and inequality going down, and given our current state of affairs, going down rapidly. She then says:

The solution to this isn’t a basket of quickly passed laws designed to prove Congress can do something — anything. The solution isn’t for the president to cut deals — any deals — just to show he can do business. The solution requires an honest recognition of the kind of changes needed if families are going to get a shot at building a secure future.

That's what happened in 2009 – 2010. Democrats structured legislation in a vain search for bipartisanship, and in doing so produced:

-- an inadequate stimulus bill that lowered unemployment only very slowly,

-- a Credit card Reform Bill that did not limit credit card interest rates to non-usurious levels,

-- a FINREG bill that still allows Systemically Dangerous Institutions (SDIs) to thrive and threaten the financial system, and that still allows trading in derivatives, and finally:

-- a “health care reform” bill that, four and a half years after its passage in early 2010, covers only 10 of the 45 – 55 million people without insurance, leaves us with 35,000 to 45,000 annual fatalities due to the absence of medical care, and still leaves millions of people who have insurance in danger of bankruptcy, due to overwhelming medical bills.

So, Warren is dead-on about this. We don't need compromise for its own sake, and legislation that creates the short-lived illusion that Congress is finally “doing something” about our problems. What we need, and have needed since the election of 2008 is that Congress actually legislate solutions to those problems, and end the kabuki theatre.

Warren thinks that people

“. . . see a government that bows and scrapes for big corporations, big banks, big oil companies and big political donors — and they know this government does not work for them.”

And again she's right, but then she goes on with distressing vagueness:

The American people want a fighting chance to build better lives for their families. They want a government that will stand up to the big banks when they break the law. A government that helps out students who are getting crushed by debt. A government that will protect and expand Social Security for our seniors and raise the minimum wage.

I think this under-estimates what people want. In my view, they want more than a fair chance at a better life. They want a good result. That is, they want a better life, period!

Also, they don't just want a Government that will “stand up” to the big banks. They want a Government that will enforce the law, and not make exceptions for big bankers, torturers, intelligence community members, defense contractors, and local police who violate constitutional rights and run civil asset forfeiture rackets using police state strategy and tactics. That means prosecutions, indictments, and convictions for big shots in each of these areas, because there has to be one law for all Americans, not different legal standards for big shots, the middle class, and the poor.

They also want more than a Government that will just help out students, but rather a Government that will forgive student debt, and, going forward, will provide free education for all Americans through College. They have it in Germany. Of course, we can afford it here too. Why isn't Warren, one of our two supposedly most progressive professional politicians, advocating that.

Further, I think people want more than a “. . . government that will protect and expand Social Security for our seniors and raise the minimum wage.” I think they want a Government that will increase SS benefits by 50% or more so seniors don't have to choose between food and medicine, and also a formula for increasing benefits annually that uses the CPI-e to determine benefit increases so that SS benefits will keep up with increases in medical costs. And in the are of the minimum wage, I think they want an increase high enough to make it a living wage.

And it can't be the same in all areas of the country. A living wage in Kansas is not the same as a living wage in new York City, so, unlike the current minimum wage, the Federal minimum wage has to be cost adjusted across areas of the country, so that each area has a true living, as well as minimum, wage.

Americans understand that building a prosperous future isn’t free. They want us to invest carefully and prudently, sharply aware that Congress spends the people’s money. They want us to make investments that will pay off in their lives, investments in the roads and power grids that make it easier for businesses to create good jobs here in America, investments in medical and scientific research that spur new discoveries and economic growth, and investments in educating our children so they can build a future for themselves and their children.

It's not free in real resources, including effort, innovation, and providing intelligent and ethical Administration of programs. And I also think that Warren also needs to find a way to incorporate three thoughts into what she says
:
-- First, Congress doesn't spend money. It appropriates money, and then its appropriations are implemented by the Executive Branch which actually spend the money;

-- Second, all high-powered money created by the Government including, coins, currency, and reserves, is the people's money in the sense that it is created under the people's authority which underlies the Constitution of the United States which authorizes the creation of USD by the Congress and its delegated authorities; but

-- Third, the money the Government spends is not the people's money in the sense that it is the tax revenue collected from the people that the Executive is actually spending. Instead, when the Executive spends money, that is money that is newly created and injected into the private sector by the Government including the Federal Reserve, the Treasury, and their interacting procedures and processes that produce Government spending. Modern Money Theory research has shown that this is true time and again for 20 years now. It is time politicians learned that lesson and began to talk it up and teach the public about it

It is not accurate, and not helpful, for Warren to say or imply that Government spending, whether deficit or otherwise, comes out of funds that have been taxed away or borrowed from the private sector. That's just not what happens, and when progressives reinforce that myth, what they are telling people is that what the Government can afford is limited to what it can tax and what it can borrow.

To reinforce that frame is to reinforce what Paul Ryan, Peter G. Peterson, and Barack Obama want to do, it is not to reinforce what progressives want to do to create full employment, a stronger safety net, Medicare for All, Environmental and climate security, reinventing energy foundations, infrastructure spending, educational enhancement for all levels of education, and all the rest of the unfinished business progressives would like to deal with.

Before leaders in Congress and the president get caught up in proving they can pass some new laws, everyone should take a skeptical look at whom those new laws will serve. . . .

Always a good rule of thumb. Follow the money!

But the lobbyists’ agenda is not America’s agenda. Americans are deeply suspicious of trade deals negotiated in secret, with chief executives invited into the room while the workers whose jobs are on the line are locked outside. They have been burned enough times on tax deals that carefully protect the tender fannies of billionaires and big oil and other big political donors, while working families just get hammered. They are appalled by Wall Street banks that got taxpayer bailouts and now whine that the laws are too tough, even as they rake in billions in profits. If cutting deals means helping big corporations, Wall Street banks and the already-powerful, that isn’t a victory for the American people — it’s just another round of the same old rigged game.

Eloquent and to the point. But those trade deals should have come in for more comment from her. Those things are more than trade deals. They are sellouts of the United States by people who wish to elevate international corporations above the laws of individual nations. Warren should be forever stating her plain opposition to Fast Track, to TPP, TAFTA, and to every so-called “free trade” deal concluded in the past, or now being proposed. Call them what they are: attacks on the sovereignty of the people of the United States and their representatives in Congress.

Yes, we need action. But action must be focused in the right place: on ending tax laws riddled with loopholes that favor giant corporations, on breaking up the financial institutions that continue to threaten our economy, and on giving people struggling with high-interest student loans the same chance to refinance their debt that every Wall Street corporation enjoys. There’s no shortage of work that Congress can do, but the agenda shouldn’t be drawn up by a bunch of corporate lobbyists and lawyers.

Hard to argue with, but again, the position on student debt, is a little too soft for my blood. Let's just get rid of that debt, so that it's not a burden on our future economy and on our best young people. Let's not just refinance. Let's just not have those debts. We can afford to pay them outright, now! They're only in US Dollars, an unlimited resource of the US Government, after all.

Finally, it's natural for progressives to respond to Senator Warren, she's got great rhetoric and seems to be on the side of the people. But we need to be skeptical about her and other candidates who claim to be with the 99% and who want to lead us. We need more than rhetoric from them. We need commitments to a specific agenda of legislation that will improve our lives, and remove the scourge of extreme inequality from our democracy.

There are, of course, no such things as absolute guarantees in politics, but I think it's the obligation of American citizens to get very specific promises from candidates, before we grant them our support and enthusiasm. We failed to get such commitments in 2008, and now we have endless debates about whether particular politicians misrepresented or lied about their positions and broke campaign promises.

We shouldn't make the mistake of not getting specific legislative commitments in the future, or engage in cults of personality again. Politics is transactional. We need to know what all our candidates will do for us, if they run for a particular office, in exquisite detail. If only to hold them fully accountable for their actions in the next election!

(Cross-posted from New Economic Perspectives.)

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joebhed's picture
Submitted by joebhed on

JF “”Third, the money the Government spends is not the people’s money in the sense that it is the tax revenue collected from the people that the Executive is actually spending.””

Yes, it is.

JF “”Instead, when the Executive spends money, that is money that is newly created and injected into the private sector by the Government including the Federal Reserve, the Treasury, and their interacting procedures and processes that produce Government spending.””

Sorry, there are no interactive processes and procedures between the federal reserve and Treasury that produce one newly created dollar in the national economy via government spending. Not one new dollar is created via government spending, which is, unfortunately, the same function by which all non-issuing governments secure public benefits, through use of their revenues.
Ours is a non-issuing federal government, Joe.
That’s why you need the Platinum Coin.

JF “”Modern Money Theory research has shown that this is true time and again for 20 years now. It is time politicians learned that lesson and began to talk it up and teach the public about it.””

If true, and in order to be believable by Ms. Warren, or anyone. why doesn’t Modern Monetary Theory produce a couple of MMT-minded public employees from the respective branches that can testify that this money-creation-by-spending is not a Mosler illusion. After 20 years, you should be able to find one.
(it's not true, Joe)
Thanks.

letsgetitdone's picture
Submitted by letsgetitdone on

Stephanie Bell Kelton proved it by detailed examination of Federal Finance procedures. Here's her article, so readers can decide for themselves. Just read it and transcend the BS.