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Give The People What They'll Like, Already: Not “Stupid Hooverism”

letsgetitdone's picture
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For the Democrats in Congress, winning in November isn't rocket science; it's about having the will to pursue survival ruthlessly. The key to winning is giving the American people what they'll like, and not allowing any of the normal Washington obstacles to stand in the way. But, for Dems to act that way depends on them changing both their beliefs and their behavior. Let's start with the beliefs.

The first belief that has to change is the idea that deficits are a problem for the Federal Government, that Democrats have to minimize to show that they are responsible. This is a myth, a lie, a scare, or a fraud. Deficits are only a problem when inflation begins to appear. If there is no inflation, Democrats should not even give lip service to the idea that deficits are important.

The reasons why deficits are not a problem are the following. First, the Government of the United States can never go broke, because it has unlimited authority to create money to use for whatever purposes it cares to. It cannot run out of money. It can never become insolvent, or fail to pay its debts, so long as it chooses to create more money. Second, the Government doesn't have to borrow money to repay its debts, or to spend more than it does now. If it does borrow money that is its choice dictated by false ideas, not dictated by real need. Nor does the Government have to increase taxes to collect money to pay for its spending. It doesn't need accumulated tax revenues to pay for what it spends unless it it needs to withdraw money from the economy to reduce inflation. As long as there's no inflation, without needing to resort to either taxation or increased taxation to reduce it, there is no Governmental need for the tax money.

The belief that the Federal Government can't, or should not run, a deficit, is just a mistaken belief, a hangover from the days of the gold standard, that prevents Democrats from acting in ways that people will like and that will get them votes. It prevents them from advocating for enhanced Medicare for All and making it effective within a year. It prevents them legislating an effective jobs program that will work quickly and end the recession before the elections in the Fall. It prevents them from moving quickly to fund a rapid transformation to an economy based on alternative energy sources. It prevents them from rapidly improving our educational system or rapidly repairing our deteriorating infrastructure. It prevents them from spending the money needed in order to reconstruct our mass transportation system. In short, the belief that deficits are important and that we really have to worry about them, and take care not to spend too much money, is a major obstacle in the way of creating an effective Government and implementing real change. It is a needless obstacle, and its acceptance and advocacy amounts to progressives tying their hands behind their backs during the heavy lifting required for real change. This mistaken belief is at the heart of both progressive and Democratic failures over the past 35 years or so, because it has limited their willingness to advocate for Government-facilitated social change over this long period of time.

The second belief that Democratic Senators have to change is the idea that the filibuster is good for them, and that they need to retain it against the Day when the Republicans will regain power. The filibuster is not good for them, however, because in making it difficult for Democrats to pass legislation that will actually solve problems, it destroys their legislative performance and they become targets for the broader failure of their Party. A case in point is Senator Barbara Boxer (D-CA). Senator Boxer entered the Senate with a pronounced anti-filibuster attitude, but over the years, she became convinced of its usefulness in preventing Republicans from working their will when the Democrats were in the minority. However, perceived Democratic failures on the stimulus package and health care are now imperiling Senator Boxer's re-election in 2010. A national wave for the Republicans could well sweep her aside. And what is creating that national wave? It is the failure of Democrats to effectively fulfill their promises and deliver change people can believe in. And that failure is due, in part, to the presence and influence of the filibuster in the Senate. Democrats need to recognize that the filibuster as an institution discriminates against Democrats, because they are the activist Party. So, the vast majority of the time, they, and not the Republicans are having their objectives, and also the needs of the majority of people thwarted by it.

Democratic Senators continued belief in the usefulness of the filibuster is about these Senators retaining individual prerogatives and power. It's not about increasing the effectiveness of the Senate, or increasing both the power and the accountability of the Party in the Senate. But what we need now is both increased power for the political party that wins an election, and also increased accountability for that political party which comes with unambiguous authority to pass legislation. It is only with increased power and accountability that even a significant part of the enormous legislative agenda facing the Democrats can be passed by election time this Fall.

There are other ways of attempting to legislate the Democratic agenda. Some suggest that Senators be required, once again, to implement physical filibusters, thinking it likely that those filibustering will get tired and key bills will be brought to a vote. Others, advocate reconciliation, or reconciliation sidecars, to short-circuit the filibuster. I think it's plausible that using these methods may succeed in passing a bill or two, but I also think that it's too late in the game for Democrats to rely on them. The truth is that the first year of the Obama Administration has produced very little popular legislation for the Party to run on in the Fall. The year has been wasted from that point of view. Now the Democrats need a second round of legislation that is likely to be both effective and popular. And they have very little time to produce that legislation. There's no time to fool around with filibusters, reconciliation, and a fruitless quest for bi-partisanship. There is only time for crafting bills that people will like and passing them.

The time urgency has become even more serious since the recent Supreme Court decision removing funding limits on what corporations and other aggregate social constructs can spend directly on campaigns in support of one or another candidate. If the Democrats don't pass legislation neutralizing the effects of this Supreme Court decision in the next couple of months, they will face a flood of corporate spending designed to block their legislative agenda that may well sweep them out of office in the 2010 elections.

Once the Democrats change these critical beliefs, here's what they need to do avoid a blood bath in 2010, and perhaps even win the election.

-- Don't do anything to cut back on projected deficits, and block all initiatives to do so. If you don't, any reductions in deficits that result will only introduce further drag on the economy. The News is breaking this evening that the President is planning to call for a spending freeze in “discretionary spending” beginning in fiscal 2010 in order to save $250 Billion. In light of what I said at the beginning of this Diary, it should be clear that this is a monumentally stupid move. It is the kind of mistake that FDR made in 1937 which halted the recovery and intensified the Great Depression. Obama has been warned against it time and again. Unemployment is still 10%. It is likely that it will still be 10% in the Fall. Freezing spending, means withdrawing money from the economy, which is bound to cost jobs. If the Democrats in Congress allow the President to to push through this freeze and other moves toward budget balancing, it is they who will pay the price in both 2010, and also, along with Obama, in 2012, because the effects of this freeze will echo through both elections in higher unemployment rates than would otherwise be the case.

Congressional Democrats: don't listen to balancing budget and deficit fairy tales and fables any longer! With no inflation deficits aren't important. What is important is slack demand and a deteriorating economy that is losing real wealth and ruining American lives every day. The deficit in economic activity is the real issue. Not the paper deficit, nor the usual tall tales about how going further into debt to the Chinese, or incurring debts that our grandchildren will to have pay, will ruin America, unless we tighten our belts, starve our economy, and further increase the gap between the rich and everyone else.

-- For God's sake, exercise the nuclear option, and get rid of the filibuster, once and for all. Make the Democratic Party as a whole stronger in the Congress, so that it has both the unambiguous power to pass its agenda, and also the responsibility if it fails to do so, or if it passes bad legislation.

-- Next, enforce Party discipline in both Houses of Congress. Make it clear that all Democrats will either vote with the leadership of the House and Senate on key bills, or will lose all Seniority and Committee Chairmanships. No exceptions. No Joe Liebermans, no Mary Landrieus, no Blanche Lincoln, playing their little games without consequences. The Leadership has to make it clear that if they break Party discipline, they go to the bottom of the heap. Who knows? If Harry Reid showed guts like that maybe he'd have a chance at re-election.

-- Develop and pass bills in both Houses to counteract the Supreme Court's recent decision. The best approach to this may be a variation of a proposal by prometheus6 to pass a Federal Law that changes the definition of a legal person to specify that it is an economic unit constituted by contract with the right to itself enter into legal contracts, and other rights necessary to secure the right to enter into contracts. Also, other rights may be granted to legal persons or classes of legal persons, but in no case will rights granted to legal persons be:

interpreted such that they supersede, impede or obstruct the constitutional rights of citizens and legal residents of the United States of America, its territories, and possessions.

-- develop and pass a new jobs bill with 51 votes that makes the Federal Government the employer of last resort. Use New Deal programs as models. It doesn't matter how much it costs. Get it done so that people can go back to work in the next 9 months. Sure people will be worried about the deficit. But educate them about that. Don't keep reinforcing the old false memes about balanced budgets, and the national debt, and ruinous deficits, and debts to the Chinese, and our Grandchildren, as the President just did this evening with his announcement of a “spending freeze.”. Stop talking and practicing Hooverism. Stop pandering to Judd Gregg and Evan Bayh, and teach people that in the present fiat money system, the United States cannot go broke because it lacks money. It can always create that. Instead, it can only go broke if it curtails economic activity, because it's afraid to use its ability to make money, lest someone charge it with “big spending.”

-- Next, pass a new health care reform bill. And if you really want to win the election in 2010, don't even worry about what the Insurance companies and Pharma want. Also, don't pass any bills that will create new and complex Government-run entities, or private sector organizations whose ability to compete with insurance companies is dubious, at best. Rather, just expand Medicare and Medicaid as much as you can, consistent with the ability to get a majority in both Houses. At a minimum, expand Medicare to those over 45, and under 18, and Medicaid to people whose income is up to 200% of the poverty level. Also, make people automatically eligible for Medicaid as soon as their share of medical costs incurred while ensured privately, exceeds 10% of their income. In addition, allow Medicare and Medicaid to negotiate drug prices with Pharma, and close the Medicare donut hole.

-- Once that health care reform bill is passed, pass another health insurance industry regulatory bill, constraining annual price increases to the general rate of inflation in the United States, prohibiting denial of coverage due to preconditions, prohibiting rescissions, outlawing discriminatory pricing based on age, gender, preconditions, or past illnesses, and waiving ERISA restrictions enabling States to implement single-payer health insurance programs, if they are so inclined. And when you pass this bill make it clear to people that the War between the American people and the insurance industry is nearly over, and that the people are winning. Either the insurance companies can sue for peace, or the next step, next year, will be enhanced Medicare for All.

-- Next, pass true financial reform. Make the banks recognize their toxic assets, by requiring mark-to-market evaluations again. Take banks that are insolvent into resolution, and after cleaning up their balance sheets, lending money to businesses needing credit, and breaking them up, then spinning them off to private ownership Prevent banks other than investment banks from gambling in using the newer financial instruments that proved so devastating in the recent crisis. Also, establish regulations requiring new inventions in financial instruments to go through an exacting risk assessment by regulatory agencies before permission is granted to investment banks to trade in them. Finally, break up the big banks and regulate them so that they can never get too big to fail again.

-- Go back to credit reform reform. Limit interest rates on consumer credit cards to 5 percent above the prime rate, beginning two months after enactment.

Other bills, such as Educational Reform, A Carbon Tax, and Energy legislation come next, if there's time before the Congressional election. But even if there's not, passage of the bills I listed will prove to the country that the old Democratic Party legislating on behalf of the people is back. The people will like the various measures I listed above, because they provide benefits for people and not for corporations. They are examples of legislation that people will like. Sure, the bills will cost the Government a lot of money and the Republican and blue dogs will scream about the deficit. But, remember, that it's only money which the Government can create at any time. Remember also, that the Republicans won't be attacking the Democrats as the Wall Street Party anymore. They won't be claiming that they, themselves, are the Main Street Party anymore. And the people are not about to vote against Democrats in 2010, because, at long last, they would have passed legislation that benefits people and the economy so substantially.

By 2012, the additional stimulus provided by the jobs bill, health care reforms, the lowering of credit card interest rates, and the freeing up of lending to business, will create a renewed economy, which will begin to reduce the deficit naturally as growth, and an approach to full employment increase tax revenues. As inflation begins to become a danger, the Government can short-circuit it by raising taxes on the wealthy, which will begin to restore the progressive tax structure that will increase social and economic equality over time, once again. As time goes by, the pressure from the deficit hawks will ease. And, if the Democrats take care to drive home the lesson that deficits are not important during slack demand and are only something to be concerned about when inflation becomes a factor, then perhaps the ubiquity of Pete Peterson can finally be laid to rest, along with the deficit hawkism that never fails to threaten the hopes and dreams of regular people whenever anyone even senses there is a possibility of emerging from a recession.

Finally, after writing this, I can just hear the critics now, telling me how unrealistic this all is. How the Democrats will never do anything like this because they're bought and paid for. How there's not even a majority in the House to do what I'm suggesting, and their certainly aren't 51 votes in the Senate to pass a substantial expansion of Medicare. In addition, there's no way the Democrats will have the guts to regulate corporate personhood, or to pass real financial reform that takes the big banks off their pedestals, and makes them act like real banks rather than gamblers playing in that great international casino in the sky. All this may be true, I may be totally unrealistic in providing this unsolicited advice to Democrats, especially in the face of Obama's announced move right this evening into blatant Hooverism. So, perhaps there's no way they can move to implement what I've suggested before this coming Fall.

However, I believe strongly that if the Democrats fail to do something like this, to pass a raft of legislation that really benefits people, and does not benefit big corporations, then there is no way that they can avoid a major Republican sweep this Fall. That sweep will occur not because people turn to the Republicans out of hope, or because they really think that the Republicans can help them solve their problems. But, instead, they will turn to the Republicans and/or to third Parties out of anger and hate, and out of a desire to punish, because they will have decided that the Democratic Party is a Party of liars, cheats, and frauds who say that they represent the people, but who never do anything except to tighten the bonds of Wall Street over Main Street, the chains of corporatism binding individual liberty. It is time for the Democrats, and for the President, to stop talking out of both sides of their mouths. It is time for them to decide. Is it to be Wall Street or Main Street? Is it to be Corporatism or Freedom? Is it to be the People, or the Plutocrats? There really is no choice for them, because if they don't choose Main Street, Freedom, and the People, then come Fall and 2012 thereafter, no one will care if they continue to exist or not. They will be a dying or dead political Party. Ready to go the way of the Whigs and the Federalists into oblivion.

(Also posted at firedoglake.com and the Alllifeisproblemsolving blogwhere there may be more comments)

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Submitted by libbyliberal on

I think of RFK who said some ask why, I ask WHY NOT!!!

WHY NOT!!!

Someone I was reading on the net this week asked if this state and time of the country didn't inspire what you are talking about, WHEN??? The time is right. We all are heeding the wake up call. This is the time to rise to statesmanship status and come together to help people. Both Repubs and Dem players are doing all they can to "con" their constuencies. It is heartbreaking and infuriating at the same time. Lost to kabuki, self-aggrandizement, bubble group think, reactionary not proactive assertiveness. Ridiculous evil media hovering. And the crony corporate capitalism!! gggrrrrrrrrr.

Talk about your do nothing parties, but not do nothing.... do evil for your corporate puppeteers.

The People or the Plutocrats. There it is.

John Edwards called them out on the two Americas. He may be gone from the stage, but the two Americas are polarizing even further.

I think we should really push hard as khin said for HR676. That would revolutionize the Dem party. That would make the Dem party a real party of the people. But it is not of the people. It is the elite class of economists. And people who treat war like a game. They have betrayed the working and even middle class. And they don't even get it. DUH! And the Repubs are such hypocrits acting like the Bush years never happened.

Elizabeth Warren, Sheila Barr, Brooksley Born .... they know what needs to be done and they have integrity ... and there are people, non-Friedman people ...plenty out there. They got treated shabbily... Sheila and Brooksley... and they were fighting for doing the right thing!!!

I was listening to an interview and they were saying how much Obama is against the Glass Steagal act. WTF is wrong with him????

I skimmed this wonderful post and intend to reread tomorrow more slowly and thoughtfully but wanted to respond tonight.

Best, lib

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Submitted by letsgetitdone on

and thanks for the enthusiasm. To answer your question. I don't know WTF is wrong with him. I look at the things he does and I ask myself is he nuts? Dos he really expect us to sit still for spending money on those two wars and freezing all "discretionary" domestic programs? We need to end those wars, and us the money here.

Submitted by libbyliberal on

Before I quote Rogers... re Obama... does he simply morph into what is expected by those around him? Was he simply playing 80 million people as his own idea? Does he have no capacity to see the forest now he is among the group think and the amoral Washington machinery? No moral imagination and the political imagination is pretty narrow ... he was determined to be the bipartisan community organizer miracle worker of Washington DC. Barack, as who was it said, "They are just not that into you!" No matter what you give away ----- stop giving it all away ---- they will not be a touchy feely epiphany with those who are telling us all they won't cooperate.

The secret is not in winning, it is in not playing!!!! But his focus is on the nay-sayers and he lets them frame it all. Codependency ... this cronyism with the gamesman and with the monster addict Repubs, though I am seeing.... how great a diff is there with the Blue Dogs, aw hell, most of the Dems it seems. Dodd and Dorgan getting out of Dodge. Yeah, guys. Now that democracy is circling ever deeper down the bowl... don't inconvenience yourselves with truth and justice and trying to help us fight on!!! CYA!!! God forbid anyone risk anything, like an election. Play it safe and don't offend any of the fellow koolaid drinkers. I think Teddy Kennedy got a little too adept with the cronyism. His enemies appreciated his sociability ... but at what cost was that?

No accountability cuz the Dems and the Repubs have a lot of dirty secrets and is Obama buying their lukewarm tolerance with his non-accountability policy.

Seeing him resort to campaign mode... God... like Bush stumping for his spin. Tell the truth Obama. Do the right thing for God's and our sake!

Anyway, here is Will Rogers:

~ Will Rogers ~

I belong to no organized party. I am a Democrat.

Democrats never agree on anything, that's why they're Democrats. If they agreed with each other, they would be Republicans.

Politics has become so expensive that it takes a lot of money even to be defeated.

The nineteen twenty eight Republican Convention opened with a prayer. If the Lord can see His way clear to bless the Republican Party the way it's been carrying on, then the rest of us ought to get it without even asking.

letsgetitdone's picture
Submitted by letsgetitdone on

about Obama, is that he doesn't learn. Does he really think he's doing a good job as President? Can't he see that he's losing it all. Why in hell does he think that "freezing spending" will actually help him? Can't he see that the jobs that will cost will do more political damage then the gain he'll get by trying to appear "fiscally responsible."

madamab's picture
Submitted by madamab on

and then ask yourself those questions again.

Versailles is all too happy to give him that B+, and the financial sector is giving out millions in bonuses again. The people who bought him are more than happy with his work.

Valhalla's picture
Submitted by Valhalla on

I'm sort of amazed that people are still amazed that Obama doesn't seem to learn. It's not about an inability to learn. Obama's actions are the feature, not the bugs. All that's changed is his level of success at camoflage.

I think the only way to still be amazed is to believe that Obama genuinely cares about good outcomes for others than himself. And there's no evidence to back that up, with a lot of evidence, ie who's been taken care of, that speaks to the contrary.

Strategically (and tactically) almost everything Obama IS doing now, has worked for him in the past, so why would he change? During the primaries, he could have stood at a podium and drooled for half an hour, and still his fans would be fainting and crying like Elvis had come back to life and the media-creative-class-progressives-whatevers would still be writing paeans to the best drooling evah! for years hence. Fooling around at the edges, a bunch of half-assed proposals, everyone else around him having to drag him across the finish line -- he's never had to do anything more than that before and he's always been rewarded.

It's actually not all that illogical to continue to act according to a mostly successful past strategy. From his point of view, he's suffered maybe one defeat (and that was all that b*tch Coakley's fault anyway, nothing to do with him). It'll probably take quite a few more 'blows' for him to change strategy. And that's assuming these 'defeats' matter to him. He's already President and he already won the Nobel Peace prize; he's never really cared about the Democratic brand as a whole so doesn't care about its ruin; the worst thing that will come out of his lack of action is status quo, which he shows no sign of being unhappy with.

Ugh, sorry to go on and on. Anyway, madamab, I agree!

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Submitted by letsgetitdone on

It's a good argument, Val. We'll just have to see if he's that kind of SOB, or has at least some pride. I'm hoping for the pride.

letsgetitdone's picture
Submitted by letsgetitdone on

constituents only if he's willing to lose in 2012. If he wants to win he still needs votes, and that means they to fool people who know too many people who don't have jobs, who have lost their homes and who have health care disasters. Reality is not infinitely malleable, even by the marketing "geniuses" whose services the corporate money buys. Eventually reality bites. It's already biting, and there's every chance that if Obama doesn't restore consumer demand sufficiently to create optimism about the economy again that he will be gone.

madamab's picture
Submitted by madamab on

I guess we'll have to see if Obama cares about being re-elected or not.

I'm betting not.

letsgetitdone's picture
Submitted by letsgetitdone on

You really think a guy with his ego would really be happy to be a one-term President? I don't believe it, and since he's lied to us about so much else, why should we take him at his word here?

madamab's picture
Submitted by madamab on

has done a lot more good for the poor in Africa and all over the world, than Oprah could ever do for anyone. And let's not forget who freed the two journalists in North Korea. It wasn't a talk-show host. Was it?

No, Bill Clinton is not the next Oprah. Pardon me, but that's ridiculous.

As for Obama, he's never going to approach Oprah's level of generosity. I agree with Lambert - he's auditioning for a role on the world stage. This is just a tick on his resume.

letsgetitdone's picture
Submitted by letsgetitdone on

I guess we'll have to watch and see what Obama becomes later.

Submitted by libbyliberal on

Robert Reich:

Like Clinton’s, Obama’s package of middle class benefits is small potatoes. They’re worthwhile but they pale relative to the size and scale of the challenge America’s middle class is now facing. Obama can no longer afford to come up with lists of nice things to do. At the least, he’s got to do two very big and important things: (1) Enact a second stimulus. It should mainly focus on bailing out state and local governments that are now cutting services and raising taxes, and squeezing the middle class. This would be the best way to reinvigorate the economy quickly. (2) Help distressed homeowners by allowing them to include their mortgage debt in personal bankruptcy — which will give them far more bargaining leverage with morgage lenders. (Wall Street hates this.)

Yet instead of moving in this direction, Obama is moving in the opposite one. His three-year freeze on a large portion of discretionary spending will make it impossible for him to do much of anything for the middle class that’s important. Chalk up another win for Wall Street, another loss for Main.

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Submitted by letsgetitdone on

Reich has been on the right side of these fights most of the time. Thanks for quoting him, lib.

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Submitted by letsgetitdone on

I don't believe that Dennis Kucinich was worried about deficits either.

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Submitted by vastleft on

Is there any reason to believe that, unencumbered by the filibuster, Dems are motivated to, say, put health insurers out of business? Or to nationalize the banks? To stop the wars? Or any other real change that's needed?

Sure, it would make them more popular with the voters, but it would ruin them in the Old Boys' Club.

madamab's picture
Submitted by madamab on

I think, letsgetitdone, that these recommendations are excellent in the main and would lead to the revitalization of the Democratic Party and a return to its roots.

I do not quite understand why you think deficit hawkism and the filibuster are preventing the Dems from doing as you suggest. I think it is far more credible that they are using those two hoary constructs as excuses not to do as you suggest.

As a woman, I am no longer under the illusion that the Democrats give a shit about its base. You can only be unterbussen for so long before you finally accept that if it's up to the Dems, you're never coming out.

The Democrats hate you, let's, and furthermore, they don't think they need you to win. I would say it's my opinion, but Donna Brazile and David Plouffe said as much during the primaries...and guess who's now in charge of the 2010 elections? David Plouffe. His real strategy is posted at The Widdershins today.

The current Dem Party is too venal, corrupt and cowardly to do any of what you're saying. Once you stop expecting them to be different, you have a lot more alternatives for activism, I believe.

letsgetitdone's picture
Submitted by letsgetitdone on

Hi madamab, I agree with the substance of what you're saying, but I also think that we have to keep asking Democrats to act like Democrats, if only to highlight that they are no longer real Democrats. Obama's apparent move toward deficit hawkism gives us an opening on the left to form a new political party if he continues with it. But the success of such a Party will depend, in part, on a continuing critrique of the Dems from the point of view of their failure to uphold Democratic ideals then feeding into the narrative, that the New Party, whatever its name (and I'm partial to The Justice Party), is the real Democratic Party, and that Democratic voters ought to be shifting their votes.

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Submitted by letsgetitdone on

One more thing, madamab, You said:

"I do not quite understand why you think deficit hawkism and the filibuster are preventing the Dems from doing as you suggest. I think it is far more credible that they are using those two hoary constructs as excuses not to do as you suggest."

I think there's a tendency to rely too much on the "excuse" meme in looking at reality. For some the filibuster and deficit hawkism are excuses. For others, not so much. They really believe that deficits are somethingto worry about and that there is a good side to the filibuster. These things are complicated and everything is caught up in a web of social feedback and appearances masking reality.

If I advocate that the Dems remove the filibuster and stop using deficit hawkism to justify not doing what they promised, I am saying to those using them as an excuse, "don't talk to me about these things they are really not part of the discussion, and YOU are responsible for keeping your promises, since you can remove the filibuster forever, and also reject myths like deficit hawkism for good." I am also saying to those who view these factors as real, that feigned "powerlessness" with respect to them is unacceptable because both beliefs are false and it is possible to remove both factors, and that I expect them to do that.

In other words, I don't think it matters much whether these are considered real factors by people or just excuses. Either way, Im telling them get rid of that crap, quit esposing these beliefs and do what you promised you would do. In the end what do I really care whether the Dems are really benevolent or malevolent. Either way, I will hold them responsible for what they do or fail to do, and not for how they feel about it.

madamab's picture
Submitted by madamab on

because if they're malevolent, I would use different tactics to get their attention than if they're benevolent.

Also, I assume they're malevolent because it helps break me out of my partisan framework. I used to be as die-hard Dem as they come, believe it or not. Smelling exhaust for more than two years broke me out of my stupor.

Nonetheless, I appreciate your energy and your ideas, even if we don't always agree on exactly what needs to be done.

letsgetitdone's picture
Submitted by letsgetitdone on

I think some Dems want different outcomes and some Dems don't. The blue dogs are probably pretty happy with Obama and his outcomes right now. But, I think many other Democratic Congresspeople and Senators are not, and would prefer outcomes like those I sketched out.

Having said that, I do still think that most Dems, with the exception of a very few, preferring high paying jobs in lobbying to what they're doing now, do want to keep their jobs. Among those, even the ones who prefer the kinds of outcomes so far, know that the public doesn't like these outcomes and that if they want to keep their jobs and/or their committee chairmanships, it would be a good idea to create a real case for their claims that they are legislating in the people's interest.

In any case, I think that during the period of incubation of a thrid party we need to feed the fire by continuously asking the Democrats to do the right things, so that when they don't do it, people can contrast what they've been doing with what they've been asked to do. In other words, posts of this kind are an implicit critique of Democrats provided they give them short shrift, and if they don't and are actually moved left, then that's all to the good, isn't it.

In other words, we still need to treat the Democratic Party as though it were the Party of the people from a normative point of view, even if we believe that it is no longer that Party.

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Submitted by beowulf on

Good stuff. I had my epiphany about Obama last night. he's a "progressive" careerist who's simplyreached the pinnacle of his career. Now he's free to be his own conservative self. Sort of like a bizarro Justice Souter.

On another note, I absolutely agree with your neo-cartalist monetary comments. Its curious that modern monetary theory really is ideological neutral (or rather nonpartisan) in the sense that either party could jump on it with both feet without crossing any existing special interest... I take that back, there is one group that would fight it hammer and tongs-- the Rubinites that control Democratic economic policy with their deficit fetish-- spending cuts and tax increases are their solution to everything (classic example, the first step of their universal healthcare plan-- cut Medicare spending and tax insurance plans!). They make the Republican plutocrats seem benign in comparison. GOP money guys just want their taxes cut, give them that and they'll probably sign off on expanding low income tax credits too.

Finally, Ellen Brown wrote a column the other day on how Canada initially funded its single payer system with low interest loans from the Bank of Canada, and proposed we do likewise w/ Fed loans. On her comments page, I took a stab at combining MMT and single payer funding. Its rather long and I don't want to blow out your comment page, so I'll just link instead of repeating. :o)
http://webofdebt.wordpress.com/2010/01/2...

letsgetitdone's picture
Submitted by letsgetitdone on

Thanks beowulf. I hadn't thought of Souter in reverse; but it's an interesting point. Btw, the most liberal member of the present Court is probablt John Paul Stevens, and he, if I remember correctly, was Republican appointed by Jerry Ford to the Presidency, and was not expected to be liberal at all. I've been holding my breath on Sotomayor, and so far am pleased that she voted against the corporatists in the campaign financing in the Citizens United case. You said:

"On another note, I absolutely agree with your neo-cartalist monetary comments. Its curious that modern monetary theory really is ideological neutral (or rather nonpartisan) in the sense that either party could jump on it with both feet without crossing any existing special interest... I take that back, there is one group that would fight it hammer and tongs-- the Rubinites that control Democratic economic policy with their deficit fetish-- spending cuts and tax increases are their solution to everything (classic example, the first step of their universal healthcare plan-- cut Medicare spending and tax insurance plans!). They make the Republican plutocrats seem benign in comparison. GOP money guys just want their taxes cut, give them that and they'll probably sign off on expanding low income tax credits too."

I agree that neo-Chartalism or "value economics" as I like to call it, is neutral between the two parties, but I think your reference to Rubinites suggests that it is not neutral with respect to globalism. Since its remedies are based on the monopoly of legitimate physical coercion held by national Governments, and the associated power of national Governments to issue unlimited legal tender, it allows Government to inititally lessen the value of foreign holdings in one's currency. For example, if the United States creates 3 T in new currency, that lessens the value of the 2 T or so that the Chinese hold in US currency.

Of course, in the long run if that 2T strengthens the US economy and we become mroe wealthy, then US currency may appreciate over time, increasing the value of Chinese holdings. However, political decision makers have rarely set much store by long-run effects, so I think they would tend to look at other Governments creating more money to fund internal activity as opposed to their interests when they are holding the currencies of the nations involved.

I really liked your comments on Ellen Brown's post on funding Medicare for All, and think we should really push the idea to this foplish Administration. I also think you should turn the comments into a post here.

Submitted by lambert on

... for two reasons:

1. It immediately relegates all other theories to second-class status, because it's always good to be modern, and adapt to current conditions;

2. It's precise enough; it's clearly got something to do with money, unlike "value economics," which could be about anything. And it's not too precise, like "chartalism," which is incomprehensible.

OK, one more:

3. It's got a good acronym (MMT) suitable for use in subject lines and content.

So, not to toot my own horn here [lambert blushes modestly] but please take the advice of a seasoned and successful meme propagator: Go with Modern Monetary Theory (MMT).

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Submitted by letsgetitdone on

lambert, I have another reason for liking "value economics." I want to connect up to evaluating outcomes of economic policy in human terms. I don't think MMT connotes that. I also want to make a connection witn Amartya Sen's work and with sustainability economics.

Submitted by lambert on

... doesn't do that. (The play on "value" was not evident to me, at least.)

And propagating the idea and the term to people who've read Amartya Sen is probably the least of our worries.

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Submitted by letsgetitdone on

to some people I know. Anyway I can use both till we know more about what will take off.

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Submitted by a little night ... on

he most liberal member of the present Court is probablt John Paul Stevens, and he, if I remember correctly, was Republican appointed by Jerry Ford to the Presidency, and was not expected to be liberal at all.

Yes, Ford appointee.

And another, earlier example: Earl Warren, of the notoriously pro-civil-rights Warren Court. He was appointed by Eisenhower and generally expected to be conservative. (via Wikipedia, the line I recall from my youth:

President Eisenhower is said to have remarked that nominating Warren for the Chief Justice seat was "the biggest damned-fool mistake I ever made."

Nevertheless, I want to point out that both Ford and Eisenhower were, in different ways, far away from being what you might call Doctrinaire Republicans. Maybe there's a lesson there, maybe not.

And I'm still holding my breath on Sotomayor...

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Submitted by beowulf on

Interesting point about reducing the value of foreign holdings, I'll have to think about that one.

Sorry I didn't respond sooner, I do hate it when work gets in the way of life. :o)

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Submitted by letsgetitdone on

Last few weeks work has been interfering too much with political life.

Submitted by [Please enter a... (not verified) on

the Government of the United States can never go broke, because it has unlimited authority to create money to use for whatever purposes it cares to. It cannot run out of money. It can never become insolvent, or fail to pay its debts, so long as it chooses to create more money.

Holy shit. *shoots himself in the head* You're right. The government can print up as much money as it wants. That doesn't mean it's a good thing. You might want to do a google search on "hyperinflation historical examples" to get a bit of context in here.

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Submitted by letsgetitdone on

Hyper-inflation has never occurred when there is an over-supply of goods and services and a lack of demand. That's our situation now. When the situation turns around then we can worry about withdrawing money from the economy. Right now demand is the problem, and jobs are the answer. Government can supply the jobs, where the private sector can't do so. It should do that directly, and stop tolerating 10% unemployment.

Submitted by [Please enter a... (not verified) on

"Lack of demand." What does that phrase mean? There's not a "lack of demand." There's a lack of demand to buy something at a certain price.

So, essentially what you hope to do is... inflate the monetary supply so it will be ...easier to buy things?

That's not how it works. If you inflate the monetary supply (which we've already done by the way, and we've found out that the monetary tail doesn't wag the economic dog), it simply means your money will be worth less. That's inflation.

It's not like producers won't respond to that. If they see that dollars are worth less, they raise the price of their product in dollars. It's a dynamic system. You simply can't pump money (or try to pump money) into the economy and assume that prices won't respond.

I'm sorry to break it to you, but this is also exactly what the government has already done. We've seen that 1. It doesn't even necessarily get into the economy the way that we've lent it out, 2. It effects the dollar in currency markets. No one wants to buy our treasuries anymore. That's why we have Quantitative Easing.

Luckily, other countries have been just as stupid as we have and we haven't been as hard hit as we could have been, but if you keep printing up money, people will lose confidence.

Don't you think that this idea would occur to every country on earth, and they'd simply keep their printing presses on all night to cover their debts? There has to be something backing the currency.

Now, you could say to my "1." point that I made earlier, well, the reason it doesn't get into the economy is because we gave the "stimulus" to banks and not to the people. You'd be right. In fact, I believe Germany did something similar to that and they had much better effects with their stimulus.

That, however, doesn't change the fact that a "stimulus" is a temporary solution, and should only be done as a last alternative. If you stimulate and have no genuine productive activity or true wealth generated by the stimulus, you're left right where you started but with more debt.

The true problem is that the government allows monopolies and fascistic giveaways. This prevents competition which decreases the total number of jobs and increases prices.

If you break those up, it will allow for competition, and genuine competition will actually LOWER PRICES. That is the other way that the standard of living rises. It's not simply that wages rise. It's that prices come down.

So, I'm not sure if I've summarized everything adequately, but the point is that there are real economic problems with this country, and it just can't be wallpapered over with dollar bills.

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Submitted by letsgetitdone on

Of course, I'm not just talking about inflating the money supply, but using the money to provide jobs for people so they can produce valued goods and services. What they're hired for and what they produce is of paramount importance. So, I think your argument below is a caricature of my arument in the post. In any event, I think the disagreements we're having in the present discussion have now migrated over to here, where similar issues are being discussed.