Category Archives: Obama Administration

The Myth of the Greedy Geezer

Posted on September 28, 2011 by | 1 Comment

The following appeared today as an opinion piece on Al Jazeera English.

Old people are becoming everyone’s favourite scapegoat for America’s economic woes. Among the growing ranks of self-styled deficit hawks, Social Security and
Medicare are depicted as an intolerable burden to the nation’s already crippled
economy, which can only be saved through massive cuts to these so-called old-age entitlement programs. To advance this agenda, proponents of entitlement cuts have attacked not only the programs themselves, but the people who benefit from them – the selfish old folks like myself, who insist upon bankrupting the
country for the sake of their own costly health care and retirement income.

We in the over-65 set have become the present-day equivalent of Reagan’s notorious “welfare queens,” supposedly living high on the hog at the expense of the taxpayer. According to what I call the Myth of the Greedy Geezer, we lucky
oldsters spend our time lolling about in lush retirement villas, racing our golf
carts to under-priced early-bird dinner specials and toasting our good fortune
with cans of Ensure – all at the expense of struggling young people, who will
never enjoy such pleasures since the entitlement “Ponzi scheme” will collapse
long before they are old.

The fervour for entitlement-cutting remains strongest among conservatives, but these days, even President Obama is taking part, promoting the recommendations of his National Commission on Fiscal Responsibility and Reform, commonly known as the Deficit Commission (and to its opponents as the Cat food Commission, since that’s what old people will be eating when the Commission finishes its work).

The appointed chair of the Deficit Commission, Alan Simpson, is one of the primary promulgators of the Myth of the Greedy Geezer. A former Republican senator from Wyoming who is known for his colourful turns of phrase, Simpson insists that “This country is gonna go to the bow-wows unless we deal with entitlements, Social Security and Medicare.” The majority of the people opposed to such cuts, he claims, are “These old cats 70 and 80 years old who are not
affected in one whiff. People who live in gated communities and drive their
Lexus to the Perkins restaurant to get the AARP discount. This is madness.”…

Read the rest at Al Jazeera.

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Posted in age discrimination, Baby Boomers, budget / tax policy, Congress, corporations, death / end of life care and choices, drug industry, economy, financial crisis / recession, generations / intergenerational issues, health care, health insurance industry, media, Medicare, Obama Administration, older workers, poverty, right wing, Social Security, Wall Street / financial industry

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Obama, Can You Spare a Job?

Posted on August 11, 2011 by | 1 Comment

One of the latest attacks on Obama’s failed policies claims that his economic stimulus created few jobs at exorbitant cost to taxpayers: $278,000 per job, to be exact. Fuzzy math aside, what these attacks omit to mention is that the stimulus, like all else these days, operated under the conservative creed that everything has to be done through the private sector. This ethos, firmly embraced by Obama
himself, prevents the government from taking the far more efficient route of simply employing people, which might have created many more good jobs for the same price tag.

Had Obama had heeded FDR’s experience during the Great Depression, we could have put unemployed people to work rebuilding American infrastructure—bridges, tunnels, railroads, roads–not to mention restoring and shoring up wetlands and carrying out other environmental projects. That’s what Roosevelt
famously did with his Works Progress Administration and Civilian Conservation
Corps.

Such an initiative might conceivably have been possible, on some scale, prior to the midterm elections. But with the gridlock in Congress and diminishing confidence in the President and government, any such course now is hard to imagine. Instead, the austerity imposed by the debts deal will likely further impede any chance at real job growth–as Roosevelt himself found in 1937 when he briefly adopted austerity measures, only to see falling unemployment rates spike once again.

But even at this dismal stage, there are nonetheless a handful of realistic projects that ought to appeal to some fiscally minded conservatives as well as to Democrats.

Jonathan Alter, who is a historian of FDR’s New Deal as well as a journalist, has promoted an idea that involves allowing states to “convert their unemployment insurance payments from checks sent to the jobless into vouchers that can be used by companies to hire workers.” The amount of the unemployment checks would in effect become subsidies to the employers, so that “for instance, a position paying $40,000 might cost employers only $20,000, thereby encouraging them to hire…If a mere 10 percent of unemployed Americans persuaded employers to accept such vouchers, more than a million people would find work with no new spending beyond some administrative costs.”

Alter believes the plan, first suggested by Alan Khazei, a Democratic candidate for the Senate in Massachusetts, might appeal to “a Republican House  that loves the concept of voucher.” But so far there’s been no interest from either Congress or the Obama Administration.

Another option is the already much-discussed German experience with the short work week. As Kevin A. Hassett of the American Enterprise Institute explained this scheme back in 2009.

Firms that face a temporary decrease in demand avoid shedding employees by cutting hours instead. If hours and wages are reduced by 10 percent or more, the government pays workers 60 percent of their lost salary. This encourages firms to use across-the-board reductions of hours instead of layoffs. Here’s how the program works.

A firm facing the challenges of the recession cuts Angela’s hours from 35 to 25 per week, thus reducing her weekly salary to 714 euros from 1,000 euros. Angela does not work for the firm during those hours. As part of its short-work program, the government now pays Angela 171 euros–60 percent of her lost salary. Most important, she still has a job. Effectively, the government is giving her unemployment insurance for the 10 hours a week that she is not employed.

Senator Jack Reed and  Congresswoman Rosa DeLauro have put this program into legislation which so far has  gone nowhere, with only a handful of co-sponsors. This despite the fact that as Dean  Baker of the Center for Economic and Policy Research points out: “Twenty  one  states (including California and New  York) already have short-time compensation as an option under their
unemployment insurance system. In these states a governmental structure already  exists to support work sharing, although there would have to be changes to make  the system more user friendly so as to increase take-up rates.”

Steven Pearlstein in the Washington Post last week pointed to another way of immediately putting people to work, which harkens back to the idea of rebuilding the nation’s crumbling infrastructure:

Over the next decade, the federal government is slated to spend hundreds of billions of dollars building roads, schools, airports, trolley  lines and airport terminals, modernizing the air traffic control system, replacing computer systems and buying planes, ships, tanks, trucks and cars.  Moving up some of that spending from years 8, 9 and 10 to years 1, 2 and 3 won’t cost any more in the long run, or increase the long-term deficit any more, but could sure help put a floor under the economy in the short run. For those worried about pork, the actual spending decisions could be left to an independent Infrastructure Bank.

To spur private investment in equipment and research, the government could immediately allow companies of all sizes to deduct 100 percent of such expenses made in the next three years, rather than “depreciating” them over many years. That incentive to invest now will increase the deficit in the short run but have little or no impact on the long-term deficit.

As Suzy Khimm reports in the Washington Post, “The question of infrastructure funding will come up as soon as Congress returns from its August recess,” since “a bill reauthorizing  spending on surface transportation — which would help build roads, highways,  and the like — is set to expire in September. There’s a big gap between the House GOP proposal, which would slash federal spending to 35 percent less than Fiscal 2009 levels, and Democratic Sen. Barbara Boxer’s two-year plan to spend $55 billion a year. Boxer’s proposal would require revenue beyond what’s in the Highway Trust Fund, which receives money from the gas tax, promising yet another fight over which will be better for the economy — reducing the deficit or Keynesian spending on infrastructure.”

We all know how that fight is likely to turn out. And as Jonathan Alter points out, even these modest approaches to job creation call for an attitude of what Roosevelt called “bold, persistent experimentation” on the part of the government–and the leadership to back it up. And as we’ve seen all too clearly, Obama is no FDR.

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Posted in Congress, economy, financial crisis / recession, Great Depression, jobs / employment / unemployment, Obama Administration, right wing

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How to Put Wall Street CEOs in Jail

Posted on March 9, 2011 by | 1 Comment

“Forgive me,’’ director Charles Ferguson said in receiving an Academy Award for his documentary Inside Job, “I must start by pointing out that three years after a horrific financial crisis caused by fraud, not a single financial executive has gone to jail — and that’s wrong.”

In New York, Tuesday marked the beginning of the long awaited trial of hedge fund manager Raj Rajaratnam–who ran the $7 billion Galleon Group  and whose personal wealth is estimated at $1.3 billion. He is being prosecuted by the SEC for insider trade deals. Rajaratnam is said to have made $45 million in illegal profits. He has denied the charges and is free on $100 million bond. If he is convicted he could go to prison for as long as 20 years. The SEC historically has been such a handmaiden of the finance business that it’s hard to imagine anything serious coming out of its prosecutions, but one never knows.

Whatever happens to Rajaratnam, it  would be simple enough to prosecute many of the high rollers on first civil, then criminal charges, fining them millions of dollars and taking them out of circulation for up to 20 years.

“Contrary to prevailing propaganda, there is a fairly straightforward case that could be launched against the CEOs and CFOs of pretty much every US bank with major trading operation,” writes Yves Smith in her popular Naked Capitalism blog.  “I’ll call them ‘dealer banks’ or ‘Wall Street firms’ to distinguish them from very big but largely traditional commercial banks.’’ She proceeds to lay out the case, the key points of which I have excerpted below:

Since Sarbanes Oxley became law in 2002, Sections 302, 404, and 906 of that act have required these executives to establish and maintain adequate systems of internal control within their companies. In addition, they must regularly test such controls to see that they are adequate and report their findings to shareholders (through SEC reports on Form 10-Q and 10-K) and their independent accountants. “Knowingly” making false section 906 certifications is subject to fines of up to $1 million and imprisonment of up to ten years; “willful” violators face fines of up to $5 million and jail time of up to 20 years.

The responsible officers must certify that, among other things, they “are responsible for establishing and maintaining internal controls’” and making sure everyone concerned knows about them–and beyond that, for taking steps to have these controls evaluated and reported. Smith continues:

It’s almost certain that you can’t have an adequate system of internal controls if you all of a sudden drop multi-billion dollar loss bombs on investors out of nowhere. Banks are not supposed to gamble with depositors’ and investors’ money like an out-of-luck punter at a racetrack.

Readers may have better suggestions of where to start, but I’d target Lehman. First, it already has a smoking gun: a May 2008 letter written by former senior vice president Michael Lee to senior management, including the CFO Erin Callan. It describes numerous accounting shortcomings, none of which look to be new and many of which look to be Sarbanes Oxley violations. Second, its derivatives books were by all accounts an utter disaster at the time of its collapse: multiple non-intergrated systems, to the point where the bank did not even have a good tally of how many positions it had….

 Naked Capitalism concludes:

Will any of this happen? Of course not. The decision was made at the time of the TARP, and reaffirmed early in the Obama administration when there was serious talk of resolving Citigroup and Bank of America, that no one at the helm of the senior banks would be subject to serious scrutiny, much the less actually expected to be held accountable for actions that wrecked the economy and have imposed serious costs on ordinary Americans. The case we described above is relatively simple to explain to a jury and has the advantage of being the sort where the plaintiffs could build on their experience in one action in subsequent cases.

But that sort of truth, that most, probably all, of the major Wall Street banks were engaged in the same sort of misconduct and the violations extended to the very top of the firms, would expose numerous other parties as complicit. So we’ll permit the cancer in our society to metastasize rather than threaten the power structure. But at least we citizens can make it clear, even if we cannot change the outcome, that we are not buying the canard that nothing can be done to fight this disease.

In other words, the power structure forges ahead, while the poor and middle classes will pay for their own screwing with reduced social security, medical care, and social welfare services of all sorts. All this is being arranged by both Democrats and Republicans, in response to a recession that will only serve to deepen the already enormous divide between rich and poor in American society.

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Posted in budget / tax policy, Congress, economy, financial crisis / recession, Obama Administration, prisons / criminal justice, Social Security, Wall Street / financial industry

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Pay Back Time for Mubarak

Posted on February 6, 2011 by | Leave a comment

The details of Mubarak’s fortune are a bit muddy, but according to various press reports, the family’s total wealth runs well into the tens of billions of dollars.

In Asia Times Online, Pepe Escobar reports:

According to a mix of United States, Syrian and Algerian sources his personal fortune amounts to no less than US$40 billion – stolen from the public treasury in the form of “commissions”, on weapons sales, for instance. The Pharaoh controls loads of real estate, especially in the US; accounts in US, German, British and Swiss banks; and has “links” with corporations such as MacDonald’s, Vodafone, Hyundai and Hermes. Suzanne, the British-Irish Pharaoh’s wife, is worth at least $5 billion. And son Gamal – the one that may have fled to London, now stripped of his role as dynastic heir – also boasts a personal fortune of $17 billion. Or some $60 billion. Some speculate the fortune is around $70 billion.’

Should Mubarak skip the country, as Corey Pein points out in War Is Business, he might well do it in a  business jet provided free of charge by the US taxpayers. “Pentagon contracts show that the US government has spent at least $111,160,328 to purchase and maintain Mubarak’s fleet of nine Gulfstream business jets. (For those keeping score, Gulfstream is a subsidiary of General Dynamics.)” War Is Busines provides copies of the actual contracts. Here is one of them:

Gulfstream Aerospace Corp., Savannah, Ga., is being awarded a $19,825,221 firm fixed price contract modification to provide for the Foreign Military Sales Program in support of FMS Case Egyptian. The Air Force provides follow-on maintenance support for the Egyptian Government’s Presidential fleet of Gulfstream aircraft. The program will provide depot maintenance support, parts and material repair, and supply, field team, and Aircraft on Ground or urgent situation support. At this time, $14,825,221 of the funds has been obligated. Further funds will be obligated as individual delivery orders are issued. This work will be complete by November 2005. Solicitation began October 2003 and Negotiations were completed October 2003. The Headquarters Oklahoma City Air Logistics Center, Tinker Air Force Base, Okla., is the contracting activity (FA8106-04-C-0001).

It’s tit for tat with Egypt. Pein again:

When the two military leaders met in May 2009 to discuss “a wide range of security issues,” Egyptian Defence Minister Hussein Tantawi presented US Defense Secretary Robert Gates with a set of gifts. They included a shotgun (with five bullets), a decorative rug and a gilded photo album.With a confidence that, in retrospect, seems dubious, Gates said “he looks forward to expanding the two countries’ military-to-military relationships in ways that promote regional stability.’Five months after that meeting, the Pentagon announced it would sell a new batch of two dozen F-16 fighter aircraft to Egypt—a $3.2 billion deal that is among the most recent of a long string of arms deliveries from America to its North African ally. These F-16s, according to the Pentagon announcement (pdf) would support “Egypt’s legitimate need for its own self-defense.”

In her blog, Sibel Edmonds,the former FBI translator who exposed corruption and incompetence at the Bureau, writes:

This is where our government takes our dollars, gives it to dictator allies, and then asks them to turn around, give that money (minus the personal share for personal wealth) to our military industrial complex corporations. Then, we have those CEO’s with $$$$$$$ salaries, and $$$$$$$ to the lobbyists and $$$$$$ to our elected representatives, who then in turn, sanction giving more money, aid, tax payers’ dollars, to these dictators; and the cycle repeats, repeats, repeats…well, it’s been repeating nonstop for more than half a century.’

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Posted in Bush Administration, corporations, foreign policy, international, Obama Administration

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Egypt: Exchanging a Dictator for a Torturer

Posted on February 3, 2011 by | 5 Comments

As it now stands, the United States appears content to contemplate exchanging Hosni Mubarak for Egypt’s new Vice President, Omar Suleiman, the Egyptian spy master–that is, one dictator for another– to maintain the status quo. Of course, Israel must sign off on this deal, assuring the U.S. that Egypt can remain as its main base in the region, straddling as it does North Africa and the Middle East. Without it, the U.S. would most definitely have to rethink its entire neo-colonial policies  in the region.

As for Suleiman, he looks to be a  nasty piece of work.  Agence France Press has pulled together the basics:

For US intelligence officials, he has been a trusted partner willing to go after Islamist militants without hesitation, targeting homegrown radical groups Gamaa Islamiya and Jihad after they carried out a string of attacks on foreigners.A product of the US-Egyptian relationship, Suleiman underwent training in the 1980s at the John F. Kennedy Special Warfare School and Center at Fort Bragg in North Carolina….

After taking over as spy director, Suleiman oversaw an agreement with the United States in 1995 that allowed for suspected militants to be secretly transferred to Egypt for questioning, according to the book “Ghost Plane” by journalist Stephen Grey. ..

In the run-up to the US invasion of Iraq in 2003, the CIA relied on Suleiman to accept the transfer of a detainee known as Ibn Sheikh al-Libi, who US officials hoped could prove a link between Iraq’s Saddam Hussein and Al-Qaeda.The suspect was bound and blindfolded and flown to Cairo, where the CIA believed their longtime ally Suleiman would ensure a successful interrogation, according to “The One Percent Doctrine” by author Ron Suskind.A US Senate report in 2006 describes how the detainee was locked in a cage for hours and beaten, with Egyptian authorities pushing him to confirm alleged connections between Al-Qaeda and Saddam.Libi eventually told his interrogators that the then Iraqi regime was moving to provide Al-Qaeda with biological and chemical weapons.When the then US secretary of state Colin Powell made the case for war before the United Nations, he referred to details of Libi’s confession.The detainee eventually recanted his account.

Thus our loyal ally Egypt provided the fake information used by the United States to go to war in Iraq.

Stephen Soldz of the Boston Graduate School of Psychoanalysis and  co-founder of the Coalition for an Ethical Psychology  provided the following excerpts from authors who discussed Sulieman.

Jane Mayer, in The Dark Side, pointed to Suleiman’s role in the rendition program:

Each rendition was authorized at the very top levels of both governments….The long-serving chief of the Egyptian central intelligence agency, Omar Suleiman, negotiated directly with top Agency officials.  [Former U.S. Ambassador to Egypt] Walker described the Egyptian counterpart, Suleiman, as “very bright, very realistic,” adding that he was cognizant that there was a downside to “some of the negative things that the Egyptians engaged in, of torture and so on. But he was not squeamish, by the way” (pp. 113).

Stephen Grey, in Ghost Plane, his investigative work on the rendition program, also points to Suleiman as central to the program:

To negotiate these assurances [that the Egyptians wouldn't "torture" the prisoner delivered for torture] the CIA dealt principally in Egypt through Omar Suleiman, the chief of the Egyptian general intelligence service (EGIS) since 1993. It was he who arranged the meetings with the Egyptian interior ministry…. Suleiman, who understood English well, was an urbane and sophisticated man. Others told me that for years Suleiman was America’s chief interlocutor with the Egyptian regime — the main channel to President Hosni Mubarak himself, even on matters far removed from intelligence and security.

Suleiman’s role in the rendition program was also highlighted in a Wikileaks cable:

the context of the close and sustained cooperation between the USG and GOE on counterterrorism, Post believes that the written GOE assurances regarding the return of three Egyptians detained at Guantanamo (reftel) represent the firm commitment of the GOE to adhere to the requested principles. These assurances were passed directly from Egyptian General Intelligence Service (EGIS) Chief Soliman through liaison channels — the most effective communication path on this issue. General Soliman’s word is the GOE’s guarantee, and the GOE’s track record of cooperation on CT issues lends further support to this assessment. End summary.

“Shortly after 9/11, Australian citizen Mamdouh Habib was captured by Pakistani security forces and, under US pressure, torture by Pakistanis,” writes Soldz. “He was then rendered (with an Australian diplomat watching) by CIA operatives to Egypt, a not uncommon practice. In Egypt, Habib merited Suleiman’s personal attention. As related by Richard Neville, based on Habib’s memoir”:

Habib was interrogated by the country’s Intelligence Director, General Omar Suleiman…. Suleiman took a personal interest in anyone suspected of links with Al Qaeda. As Habib had visited Afghanistan shortly before  9/11, he was under suspicion. Habib was repeatedly zapped with high-voltage electricity, immersed in water up to his nostrils, beaten, his fingers were broken and he was hung from metal hooks. That treatment wasn’t enough for Suleiman, so:

To loosen Habib’s tongue, Suleiman ordered a guard to murder a gruesomely shackled Turkistan prisoner in front of Habib – and he did, with a vicious karate kick.

After Suleiman’s men extracted Habib’s confession, he was transferred back to US custody, where he eventually was imprisoned at Guantanamo. His “confession” was then used as evidence in his Guantanamo trial.

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Posted in international, Obama Administration

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In the Social Security Debate, Today’s Democrats Are Worse Than Yesterday’s Republicans

Posted on January 24, 2011 by | 4 Comments

Having “retooled’’ his Presidency for a more open accommodation of the center right, Obama will soon be overseeing the battle to launch a dismantling of the Social Security system.

His government has, from the start, been reminiscent of the Clinton years, so it’s safe to say that we can expect more triangulation. Clinton’s adoption of Republican tropes led him to fulfill some of the conservatives’ fondest dreams: His administration countenanced the demise of the banking regulations originally established by the Depression-era Glass Steagall Act, and the destruction of the welfare system established in the 1930s and expanded in the 1960s. Obama will provide much the same function on Social Security. Without entirely destroying the popular program, he will support cuts that go beyond anything that should rightly happen during a Democratic administration.

Of course, the Democrats will say that it isn’t their fault: It all happened because of that horrid Tea Party, dragging conservative Republicans even further to the right. This suggests that Democrats had no choice but to head them off at the rightward pass, as if standing and fighting simply wasn’t an option—and as if they didn’t still hold the Senate and the White House.  

What makes this especially disconcerting, for anyone who has lived long enough to remember earlier political eras, is how favorably the Republicans of the past compare to the Democrats of the present on many points.

Tracking back to the New Deal, one can find Senator Robert A. Taft of Ohio—the most prominent conservative Republican of his time, later identified by John F. Kennedy in Profiles in Courage as one of the five most important senators in history–registering his support for Social Security. A champion of private enterprise and enemy of labor unions, Taft bashed Roosevelt’s “socialistic” programs every which way, fighting to reduce runaway government and even opposing entry into World War II. But at the height of the Great Depression, he also supported the new Social Security program, as well as public housing and public education.

Taft embodied the tenets of Main Street middle western life before the Second World War. And he was not unreservedly laissez faire, nor was he anti-government. He believed in the intervention and utility of the federal government where he deemed it necessary, and that included providing an adequate, if not generous, public welfare system.

Taft ran for president three times and never made it. But Eisenhower, the war hero who became a popular Republican president, carried some of these same basic tenets into the postwar era. Eisenhower was not opposed to federal intervention in the economy and, for example, backed the creation of an interstate highway system, which became a vast public works program. And Eisenhower not only supported Social Security, but took steps to enlarge the program. According to the Eisenhower Memorial Commission:

Dwight Eisenhower was the principal force behind the greatest single expansion of Social Security beneficiaries in the history of the program. He led the legislative drive to add over ten million Americans to the system. Here’s how it developed.

When the Social Security Act became law in 1935 its purposes were primarily aimed at factory workers and other employees of business organizations. The legislative process leading to passage of the law was both lengthy and contentious. Large numbers of working American’s were left out of the original Old Age and Survivors Insurance coverage. No major changes in the Social Security law had been made since its initial passage.

During the presidential campaign of 1952, candidate Eisenhower made it clear that he believed the federal government played a rightful role in establishing the Social Security system, but he made no promises concerning its future. However, after the election it became clear that the Republicans would have control, by slim margins, of both the House of Representatives and the Senate. This changed the political and legislative landscape considerably.

Previously, expansion of the Social Security system or increasing the level of payments to retired Americans had been given no chance to succeed in the Congress because there were enough conservative Democrats (and the majority of Republicans) who would vote against such bills. With a Republican President it now appeared likely that the majority of congressional Republicans would honor their President and support his initiatives. Among the new legislative possibilities, action on Social Security now seemed possible.

Thirteen days after taking his oath of office, President Eisenhower delivered his first State of the Union message to Congress and, when discussing the need for greater effectiveness of government programs, he said, “The provisions of the old-age and survivors insurance law should promptly be extended to cover millions of citizens who have been left out of the social security system.”

The following week, during a White House meeting of the House and Senate Republican leadership, Eisenhower brought up the Social Security expansion proposal and asked America’s most famous living conservative, Senator Robert A. Taft, if he would support the initiative. When he received a positive reply he knew that the possible had just become the probable. Before the end of the month, Eisenhower appointed a presidential commission to study the Social Security system’s deficiencies and submit a detailed report on specific reform measures. In his public statement creating the commission, the President said, “It is a proper function of government to help build a sturdy floor over the pit of personal disaster, and to this objective we are all committed.”

Those opposed to the initiative stressed their belief that retirement income was the responsibility of every individual and the federal government should not be involved. One citizen should not have to pay for the old age necessities of another. President Eisenhower responded to this notion during his press conference on June 17, 1953 with these remarks: “A strict application, let us say, of economic theory, at least as taught by Adam Smith, would be, ‘Let these people take care of themselves; during their active life they are supposed to save enough to take care of themselves.’ In this modern industry, dependent as we are on mass production, and so on, we create conditions where that is no longer possible for everybody. So the active part of the population has to take care of all the population, and if they haven’t been able during the course of their active life to save up enough money, we have these systems.”

You know it’s a measure of how far this country has moved to the right that someone like myself could wax nostalgic for the likes of Dwight Eisenhower and Robert Taft. (Next stop: Remembrances of the Nixon years, when the richest Americans were taxed at a rate of 70 percent.) Yet now we see the historic approach of these two major Republicans figures—the icon of the Senate and the storied war hero—submerged beneath the threat of the Tea Party adherents. And it is all happening under the listless hand of Obama, while the Democratic mainstream sits passively back and watches the demise of the programs that made their party great.

In the end, history most likely will judge that the final blows against the New Deal came not from the Republicans, but from weak or opportunistic Democratic politicians–first Clinton, then Obama.

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Posted in budget / tax policy, Congress, Congressional Democrats, Congressional Republicans, economy, Great Depression, Obama Administration, right wing, Social Security

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Just a Nut Job

Posted on January 18, 2011 by | 2 Comments

You could almost hear the collective sigh of relief coming from the right when accused Tucson shooter Jared Lee Loughner was revealed to be just another disturbed young man, clearly suffering from untreated mental illness. After all, conservative commentators leaped to point out, if the guy is a nut job, then all the right-wing political attacks on Democratic party office holders and candidates for office didn’t have any or much effect on the shooting.

That interpretation of events seems to have taken hold in the public mind. Most people don’t think there is any connection between the Tuscon shooting and what the pollsters call “political discourse,” according to the new ABC-Washington Post poll released Tuesday morning.

The public overwhelmingly sees the country’s political discourse as negative in tone – 82 percent say so, including three in 10 who say it’s “angry.” Still there’s a division, 49-49 percent, on whether it’s created a climate that could encourage political violence.

On the Tucson shootings specifically, 54 percent of Americans do not think the political discourse contributed to the incident, while 40 percent think it did. Those who do see a connection divide on whether it was a strong factor, or not strong.

The survey more generally finds blame for the political tone spread across a variety of groups. Half the public says the Tea Party political movement and its supporters, as well as political commentators on both side of the ideological divide, have “crossed the line” in terms of attacking the other side. Forty-five percent say the Republican Party and its supporters have done the same; fewer, 39 percent, say so about the Democratic Party.

Now, this doesn’t make much sense to me. Jared Loughner may be mad, but there’s clearly a method to his madness. He may be psychotic, but his psychosis manifested itself in a particular way. After all, Loughner didn’t attack members of his family. He didn’t go postal at the workplace. He didn’t shoot up the military recruiters or the college that rejected him. No. When he picked up his legally obtained assault weapon, he chose to try and assasinate a member of the United States Congress. And not just any old member, but one who had been targeted, singled out for political attack, reviled by the right wing. And this amidst a call by several right-wing figures for their followers to become “armed and dangerous” to defend their liberties against such Democratic party usurpers as Gabrielle Giffords. How can you say this attack is unrelated to the current American political culture?

As Lynn Parramore, editor of the Roosevelt Institute’s blog New Deal 2.0, puts it, one must  ignore that political culture, right-wing ideology, and Sarah Palin. Otherwise, one  will be taking advantage of the botched murder, and thereby contributing to a witch hunt. To avoid such accusations, the majority of the populace are willing to deny the following facts, as outlined by Parramore:

  • That a disturbed young man allegedly went on a killing rampage. That his rage did not manifest in an attack on a neighbor. Or a family member. Or a police officer. It manifested in the attempt to assassinate a member of the United States Congress.
  • That the disturbed young man recorded his ramblings on YouTube prior to the rampage. That his disturbance did not take the form of claims that he was pursued by aliens. Or expressions of a belief that he was Messiah. His ravings concerned the illegitimacy of the U.S. government and its currency.
  • That obsessions with the legitimacy of the U.S. government and its currency are not associated at this moment in history with liberals. Or centrists. Or members of the Flat Earth Society. They are the pet concerns of right wing ideologues.
  • That the target of the assassination attempt, Congresswoman Giffords, had been the object of threats, violent rhetoric and the witness to alarming incidents in public venues, including the sight of a gun dropping out of the clothing of a man holding an anti-government placard at a recent gathering. That she publicly expressed her fear of the escalation by naming a public figure, whose use of violent imagery was directed at her. The person named was not Howard Dean. Or Mahmoud Ahmadinejad. Or President Obama. The person named was Sarah Palin.
  • That Sarah Palin, the person Giffords publicly named as a spreader of dangerous rhetoric, is a political figure. That she is not associated with progressives. Or centrists. Or moderate Republicans. She is associated with the Tea Party.
  • That over the last two years, the Tea Party has been associated with the expression of dissatisfaction towards the current state of the nation. That this dissatisfaction has not expressed itself in demands for a renewal of the brotherhood of mankind. Or a focus on peaceful protest. It has been expressed in slogans like “Don’t retreat, RELOAD” (Sarah Palin); a call for “Second Amendment remedies” (Nevada Tea Party Senate candidate); and “I want people in Minnesota armed and dangerous” (Congresswoman and Tea Partier Michelle Bachman).
  • That the very forces in our society that might have prevented the massacre — namely strong gun laws and adequate services for the mentally ill — are precisely the forces that a certain section of the American political spectrum seeks to undermine. That this section is not the far left. Or the U.S. Pacifist Party. Or the Green Party. Those that most loudly advocate weak gun laws and austerity measures that cut off health care are typically right wing conservatives.
  • That the person who has had the task of maintaining law and order in Tucson, Sheriff Clarence Dupnik, expressed his deep concern about the community just after the shooting. That the thing most troubling to him was not the real estate crisis in Tucson. Or unemployment. Or the need for looser gun laws. He specifically named violent political rhetoric as the thing that kept him up at night.

In the face of this preponderance of fact, the right has once again managed to snatch victory from the jaws of defeat and sieze hold of the political rhetoric. That they did so in the current circumstances–while a judge and a young child lie dead, and a member of Congress struggles to recover from bullet through her brain–seems nothing short of astonishing. But then, one has to remember how completely the right has ruled the political discourse in this country for at least 30 years. 

Since the birth of the New Right  back during Jimmy Carter’s presidency, the right has ceaselessly steeped its political program  in an  ideology of “principle,”  as opposed to wishy-washy Democratic pragmatism. Principle, drawn from the study of the literal Bible text and the Constitution, was to be the foundation of rightward change, from the Reagan Revolution through Bush II. The Democrats largely ignored the ideological attack, laughing it off as the work of a bunch of crackpots. They also offered no competing ideology, having denounced liberalism and abandoned traditional  Democratic principles. 

The result was the repeated loss of the presidency, of the Congress, of any control over the economy and of foreign policy. Through sheer ignorance and arrogance, plus a dose of ideological bankruptcy, the Democrats willed themselves out of power. And when they managed to get some back, with the election of Obama in 2008, they had nothing in their arsenal with which to meet the right-wing ideological onslaught that followed.

Beyond the mainstream tenets of conservative principal, the further shores of the right fired up a fresh hodgepodge of nativist politics that spurred on the revival of  new militant white power groups, the rise of the militia movement, then the Minutemen, and then the more militant members of the Tea Parties. These days, it’s hard to tell the fringe from the center right, and what we used to call “extremist” views are expressed on the campaign trail and sometimes on the floor of the Congress.

But none of this, of course, has anything to do with the shooting in Tucson.

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Posted in 2010 elections, Congress, media, Obama Administration, right wing

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Obama’s Tax Deal and the Future of Social Security

Posted on December 21, 2010 by | 1 Comment

It’s worth pointing out once again that  last week’s  tax deal is hardly the victory for the American people it is made out to be. One of the biggest chunks –thirteen percent of the total monies — come from Social Security and Medicare in the form of a one-year cut in payroll taxes. The government promises to pay back what it is taking from the Social Security trust fund by borrowing the money, then floating bonds to guarantee  repayment.

This one year abeyance might not seem like much. But with the coming of a right-wing  Republican House, under pressure from the further fringes in the Tea Party, it does not augur well for the future of the program. From its inception under FDR, the Republicans have dreamed of getting rid of Social Security, along with such other things as the Federal Reserve, the income tax, the Department of Education and the UN.

“Social Security’s dedicated funding base is jeopardized by this deal in an unprecedented way and there is a grave risk now that the retirement benefits of America’s workers will have to compete with our other priorities for a share of the general budget,” said Texas Congressman Loyd Doggett at a press conference cheld by the National Committee to preserve Social Security and Medicare. ”It would result in Social Security being as dependent on annual Congressional action as public television or our National parks.”

“If the recent debate on the Bush tax cuts has taught us anything, it is that taxes are easy to cut but hard to restore, said Florida Congressman Ted Deutch at the same press conference. “If this provision is made permanent, it will double Social Security’s long term funding gap and open a door that Democrats have long fought to keep closed – budgetary attacks on Social Security.’’ 

Cutting social welfare programs will be very much in vogue with the new Congress, especially as it ramps up for a showdown on raising debt limits this coming spring. Because the right wingers are out to get social programs and because all spending measures must start in the House, it is highly likely that Social Security and Medicare will occupy center stage in this debate, and that the proposals of various fiscal commissions will come into play. First, the suspension of a cost of living increase for Social Security recipients could well be extended. Second, the age at which one can begin to collect Social Security will most likely be raised from 67 to 69. And finally, the Bush tax cut deal digging into the Social Security trust fund certainly will be an opening for the right to further a  borrowing spree–ironically, all in the name of reducing the deficit.

However, there is a potential remedy. In 2012, the economy should be stronger than it is today, argues Robert Greenstein, executive director of the liberal Center on Budget and Policy Priorities. 

 In addition, Congress likely will have enacted some significant budget cuts, and the nation likely will be debating the sort of further cuts that various commissions have recently proposed, including cuts in Social Security and Medicare benefits for elderly widows and seriously disabled people with incomes as low as $20,000. At that point, the President will need to make clear that he will veto any legislation extending the high-end tax cuts or the weakening of the estate tax beyond its 2009 parameters, and he should use the bully pulpit to take this case to the country.

If only we could count on our president to do something like this at all, much less in an election year.

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Posted in 2010 elections, budget / tax policy, Congress, Medicare, Obama Administration, right wing, Social Security

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Obama’s Fiscal Commission Prepares to Carve Its Turkey

Posted on November 27, 2010 by | Leave a comment

The dread report of the White House’s National Commission on Fiscal Responsibility and Reform is due out this week.  One of the Commission’s co-chairs, the putative Democrat and consummate wheeler-dealer Erskine Bowles, has been up on the Hill flogging their plan to reduce the debt by cutting the country’s already skimpy programs for the old, the sick, and the poor. His partner, motor-mouth Republican Alan Simpson, continues his ranting and ravings against the greedy geezers who want to sink the entitlement-cutting ship before it’s launched. Both of them have taken to boo-hooing because no one appreciates all the work they are doing to save the nation from certain fiscal doom, and nobody is willing to pitch in to meet this noble goal.

Fiscal Commission's Plan: Starve the Old to Stuff the Rich

Personally, I’m still waiting to hear how Wall Street is going to pitch in and do its part–or the people with high six-figure incomes who claim they still aren’t rich enough to give up their tax cuts. Or, for that matter, Bowles and Simpson themselves, who retired on fat  pensions and don’t have a financial care in the world.  Since none of this is likely to happen any time soon, we’d better take a good hard look at what these sanctimonious old coots have come up with.

We already know a lot about what to expect from the Fiscal Commission Plan, since the co-chairs released their own preliminary proposals (as yet unapproved by the 18-member Commission) earlier this month. According to people with access to the Commission’s thinking, they seem to think their best bet is to achieve consensus on a proposal to change the way Social Security’s annual cost of living increases (COLAs) are calculated. What seems like a mere accounting adjustment would, in reality, severely affect benefits over time. The National Committee to Preserve Social Security and Medicare explains the impact of this scheme:

This proposal will affect current and future beneficiaries uniformly.  The impact would occur after benefits are initiated, with each COLA, as the yearly increase in benefits would be slightly lower than would have been the case without the change.  The impact would be greater with each successive COLA.  For example, the Social Security benefits paid to someone collecting benefits for 10 years would be about 3 percent lower, on average, if the chained-CPI was used for the COLA instead of the current CPI-W.  After 20 years this reduction would reach 6 percent and 9 percent after 30 years.

This is is bad enough–especially since old people’s cost of living increases faster than the national average because of exploding health care costs. But of course, there’s more, in the form of a plan that would raise the retirement age to 67 and eventually 69. Working until you drop dead or  literally are forced out of the labor market is utilitarian nineteenth-century thinking. But at that time, at least there was an expanding need for workers in a burgeoning industrial capitalist economy. The one big profitable industry surviving in America today is so-called financial services, which consists of a small number of overpaid people passing money back and forth amongst themselves. They certainly don’t need any more workers, and if they do, they’ll get them in India. Vermont Senator Bernie Sanders said of the idea that it was not only “reprehensible,” but “also totally impractical. As they compete for jobs with 25-year-olds, many older workers will go unemployed and have virtually no income.”

There was no such ringing takedown of the plan, of course, from Senate Majority Leader Harry Reid, whose mealy-mouthed statement tells us what we can expect from our Democratic Senate. “I thank the leaders of the bipartisan debt commission for their work,” Reid said. “While I don’t agree with every one of their recommendations, what they have provided is a starting point for this important discussion. I look forward to the full commission’s recommendations and to working with my colleagues on both sides of the aisle to address this important issue.”

Nancy Pelosi had somewhat stronger words, calling the preliminary proposals “simply unacceptable”–but then, she’s nothing but the soon-to-be-ex-Speaker of the House. In fact, co-chair Simpson has been predicting, with something close to glee, the “bloodbath” that’s likely to ensue next spring, when the new Republican House refuses to extend the debt limit and threatens to send the nation into default “unless we give ‘em a piece of meat, real meat, off of this package.”

When all is said and done, there’s pretty much no way this so-called debate will end up without most of us, old and young alike, getting screwed. An already stingy program that ought to be expanded to cover elders as their numbers grow instead  is going  to be reduced, and the only question is how and by how much. It makes no sense, but it may well have political traction because the pols can sell it as an attack on rich grannies–”the greediest generation” as Simpson calls the old–while the young are hoodwinked into thinking it’s good for them. And since its full effect will take  years to be felt, the current crop of opportunistic politicians will be long gone into splendid retirement by the time these young people realize how wrong they are. Alan Simpson was frank about this fact in the Washington Post on Friday, using another one of his nauseatingly folksy metaphors:

 It takes six to eight years to pass a major piece of legislation. . . . On a piece of legislation that you know is going to go somewhere someday, you want to get a horse on the track. That might be not much. Then the next session you want to put a blanket on the horse. Nobody’s paying attention then. Then you put some silks on the horse. Then you clean the outfield and the infield. And then you put a jockey on the horse in the sixth year, and you can win it. Because the toughest part is to do the initial thing, and so it’s usually so watered down, it’s just gum, you could gum it. Then you begin to build it the next year, the next year and then you get it done. That’s what I see.

And just in case you thought it couldn’t get any worse, consider this warning from Allan Sloan, Fortune’s senior editor, who wrote an op-ed in the the Washington Post on Thanksgiving day:

[P]rivatizing Social Security, slaughtered when George W. Bush proposed it five years ago, seems about to rear its foul head again. You’d think that the stock market’s stomach-churning gyrations – two 50 percent-plus drops in just over a decade – would have shown conclusively the folly of retirees’ having to bet their eating money on the market. But you’d be wrong. Stocks have been rising the past 18 months, and you can bet that we’ll see a privatization push from newly elected congressmen and senators who made it a campaign issue.

Why is privatizing Social Security such a turkey? Because retirees shouldn’t have to depend on the market’s vagaries for survival money. More than half of married couples older than 65 and 72 percent of singles get more than half of their income from Social Security, according to the Social Security Administration. For 20 percent of 65-and-older couples and 41 percent of singles, Social Security is 90 percent or more of their income. That isn’t projected to change.

Arrayed against these grim prospects are a small group in Congress, led in the Senate by Bernie Sanders and Sheldon Whitehouse of Rhode Island, and in the House by Jan Schakowsky of Illinois. Says Shakowsky: 

Social Security has nothing to do with the deficit. Addressing the Social Security issue as part of the deficit question is like attacking Iraq to retaliate for the 9/11 attacks – there is simply no relationship between the two and attempting to conflate them does a grave disservice to America’s seniors. Taking money from Social Security retirees whose average total income is $18,000 per year and average benefit is $14,000 ($12,000 for women) is simply wrong. It places them at fiscal risk and hurts the economy because they will be unable to purchase the goods they need.  Americans in poll after poll have indicated their opposition to benefit cuts – particularly at a time when Wall Street bankers are making record bonuses.’

Schakwosky has her own plan, which will be an antidote to whatever the Fiscal Commission comes up with. But her ideas are unlikely to make any headway in the lame duck Congress or with the Democratic leadership, as they wait, already on bended knee, for the coming of the Republicans.

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Posted in Baby Boomers, budget / tax policy, Congress, Congressional Democrats, Congressional Republicans, economy, financial crisis / recession, generations / intergenerational issues, Obama Administration, older workers, poverty, Social Security, Wall Street / financial industry

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Behind the Battle Over Social Security

Posted on October 18, 2010 by | 2 Comments

As the midterm elections near, the future of the Social Security system has become a hot-button issue–and a confusing one. A number of Republican politicians have hit on it as yet another way to undermine Obama and the Democratic leadership, by criticizing their supposed fiscal irresponsibility. Some must also see victory at hand in the conservatives’ longstanding battle to destroy one of the most hated remnants of the New Deal. These include the GOP’s chief architect of change Paul Ryan,who wants to turn Medicare into a voucher program and privatize Social Security. He is backed up by House minority leader John Boehner, who, if the Republicans take the House, could become the next speaker. 

Some Democrats have risen to defend the best–and most solvent–anti-poverty program the nation has ever known. But for other Democrats–including those in the White House–the response is more triangulation. It was Obama who set in motion the Fiscal Commission, supposedly to study the deficit but in fact, as just about everyone in Washington knows, to pare entitlements, cutting Medicare and Social Security. Originally, this commission was thought ready to propose lifting the limit at which one could draw Social Security from 62 to 67. Now scuttlebutt  is that the entry age should be 70. Our supposedly “socialist” president has placed the country’s premier social program in the hands of Alan Simpson, a Republican crank who views old people as the new welfare queens. 

It’s not surprising, then, that a lot of older voters don’t know what to make of it. A piece in Sunday’s New York Times reported on “tales of political burnout and withdrawal among older voters” in one swing county in Colorado. Many in this consituency, which can usually be counted upon to vote in large numbers, seemed to be withdrawing altogether from the fray. Others were preparing to shoot themselves in the foot:

Bill Benton, 79, a lifelong Colorado resident who described himself as an Eisenhower Republican, supports Mr. Buck and believes that his comments suggesting that the private sector could perhaps do a better job with Social Security were “just talk.” Mr. Buck has said that despite his comments, he would not support privatizing the retirement program. “I like him, but he says some dumb things,” Mr. Benton said.

With all the rhetoric flying out of Washington, it’s likely that some older people have come to view the whole topic of Social Security as the centerpiece in a Washington charade of boasts and lies, another turn in the game of smoke and mirrors, much in the manner of the shouting match over health care. It turns the stomach, feeds the hate against Washington, and sends people fleeing to escape a nightmare they can’t understand–sometimes, it appears, right into the arms of the Tea Party.

And in fact, people who suspect a smoke-and-mirrors game are pretty much on the money. Social Security’s elevation to a central political debate is tied to another hot-button issue: The future of the Bush tax cuts. Those tax cuts, which benefit the very rich—the people who pump cash into a candidate’s campaign—are set to expire next year. “In 2010, when all the Bush tax cuts are finally phased in, a staggering 52.5 percent of the benefits will go to the richest 5 percent of taxpayers,” according to Citizens for Tax Justice, the Washington-based  public interest group that follows and analyzes tax policy.

The impact of these cuts on the national treasury–and the deficit–cannot be overestimated: “The tax legislation enacted under President George W. Bush from 2001 through 2006 will cost $2.48 trillion over the 2001-2010 period,” Citizens for Tax Justice reports. “This includes the revenue loss of $2.11 trillion that resultsdirectly from the Bush tax cuts as well as the $379 billion in additional interest.’’

Obama has declared his opposition to extending the tax cuts for the highest income brackets. But some conservative Democrats will have other ideas. And if the White House’s resolve fails, as it often does, there’s another deficit-cutting alternative at hand in Medicare and Social Security. It’s a lot easier for politicians to talk about paring down entitlements than it is to attack the rich on whose largesse they depend.

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Posted in 2010 elections, budget / tax policy, Bush Administration, Congressional Democrats, Congressional Republicans, Medicare, Obama Administration, right wing, Social Security

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