nytimes.com — It’s that time again: the annual meeting of the American Economic Association and affiliates, a sort of medieval fair that serves as a marketplace for bodies (newly minted Ph.D.’s in search of jobs), books and ideas. And this year, as in past meetings, there is one theme dominating discussion: the ongoing economic crisis. This isn’t how things were supposed to be. If you had polled the economists attending this meeting three years ago, most of them would surely have predicted that by now we’d be talking about how the great slump ended, not why it still continues. So what went wrong? The answer, mainly, is the triumph of bad ideas.
commondreams.org — Three trillion dollars a year. That's how much the wealthiest Americans avoid through the system of subsidies and schemes and sweet deals that deprive middle-class workers of their earned benefits. That's three times more than the deficit. That's enough for a full-time job for every middle-class household in America. Here are the distressing details.
prospect.org — The budget deal that just averted the supposed fiscal cliff was only a warm up. The next fiscal cliff is the $110 billion in automatic budget cuts (sequesters) that last week’s budget deal deferred only until March. But, as long as we are using topographic metaphors, this is less a cliff than a bluff. On the Sunday talk shows, Republican leaders were full of bravado and swagger. Representative Matt Salmon of Arizona, on CBS “Face the Nation” said it was about time “for another government shutdown.” Senate Minority Leader Mitch McConnell, speaking with ABC’s George Stephanopoulos, ruled out any further tax increases, declaring that “the tax issue is finished, over, completed.” He insisted, “Now it’s time to pivot and turn to the real issue, which is our spending addiction.” But is spending really the problem?
prospect.org — Even for someone unmoved by hyper-ideological, right-wing rhetoric, Senator John Cornyn’s most recent op-ed for the Houston Chronicle is astounding in its mendacity and utter disregard for responsible governance. To wit, after engaging in a little bizarro history—where he blames the president for brinksmanship on the debt ceiling and the fiscal cliff, as if Obama has an obligation to implement the GOP agenda—the two-term Texas lawmaker presents a government shutdown as a responsible way to force spending cuts. Ignoring, for now, Cornyn’s assertion that the United States will end up like Greece—which, as I noted a few days ago, is ridiculous given our ability to print money—it’s worth elaborating on what Cornyn means when he says “shutdown.”
nytimes.com — The centrist fantasy of a Grand Bargain on the budget never had a chance. Even if some kind of bargain had supposedly been reached, key players would soon have reneged on the deal — probably the next time a Republican occupied the White House. For the reality is that our two major political parties are engaged in a fierce struggle over the future shape of American society. Democrats want to preserve the legacy of the New Deal and the Great Society — Social Security, Medicare and Medicaid — and add to them what every other advanced country has: a more or less universal guarantee of essential health care. Republicans want to roll all of that back, making room for drastically lower taxes on the wealthy. Yes, it’s essentially a class war. The fight over the fiscal cliff was just one battle in that war. It ended, arguably, in a tactical victory for Democrats. The question is whether it was a Pyrrhic victory that set the stage for a larger defeat.
policyshop.net — The new job numbers are out and, at first glance, there is nothing surprising here. But here's a statistic that jumped out at me: 89,000 public sector workers lost their jobs in October, November, and December—with most of those losses, 66,000, occurring in October. Large-scale layoffs of government workers continue across the United States. Such layoffs undermine local economies and stymie the recovery. For every five workers who were hired in the past three months, one was laid off by government. This doesn't make sense. Government may not always do such a great job of stimulating employment growth through fiscal and monetary policy, but it sure as heck can bolster the job market by continuing to employ those people who do have jobs. Instead, thanks to austerity policies, government has been doing the exact opposite.
robertreich.org — The news today from the Bureau of Labor Statistics is that the U.S. job market is treading water. The number of new jobs created in December (155,000), and percent unemployment (7.8), were the same as the revised numbers for November. Also, about the same number of people are looking for work (12.2 million), with additional millions too discouraged even to look. Put simply, we’re a very long way from the job growth we need to get out of the gravitational pull of the Great Recession. That would be at least 300,000 new jobs per month. All of which means job growth and wage growth should be the central focus of economic policy, not deficit reduction.
alternet.org — It's bizarre how people distinguish between serious and unserious proposals. With another debt-ceiling show-down looming, talk of the 'platinum coin option' – declared deeply unserious in 2011 – is once again gaining some traction. I say: do it, and let the chips fall where they may. Who knows where the courts land, or even if the GOP has the chutzpah to take the case to court at that point in the game? Courts certainly can and do rule on narrow technicalities, and the threat of a global economic meltdown is a pretty strong incentive. But it should also be on the table because there is nothing more ridiculous than a congressional minority threatening the economy by trying to extract unpopular concessions in exchange for paying the bills that Congress itself already ran up. Let's not pretend this is normal behavior we're dealing with. In fact, let's not pretend it's Constitutional.
cepr.net — Millions of people are rightly outraged to hear that Social Security is in the gun-sights of both Speaker Boehner and President Obama in their budget negotiations. There is no reason that our political leaders should be discussing cuts to the country’s most successful social program. While the promotion of budget hysteria is one of the largest industries in Washington, the most important and widely ignored fact about the budget situation is that we have large deficits today because the collapse of the housing bubble sank the economy. This is not a debatable point.