deregulation

Are Republicans 'Crazy?' Not If You Follow the Money

Richard Eskow — Thu, 30 Aug 2012 11:17:37 -0400

Their opponents shouldn't be too quick to call Republicans "crazy." It makes more sense to employ that time-honored investigative principle: Follow the money. Sure, they've said crazy things -- in their speeches and in their official platform. But crazy?

Like a fox.

Take that "we built it" theme. Sure, they're lying about a selectively-edited phrase for political advantage. But why this particular phrase? Because the President was defending government's role in building America's infrastructure, educating its children, and improving its technology.

They don't want those things anymore. The argument fell on deaf ears because GOP isn't really the "party of business." It's the the party of mega-business, of globalized multinational corporations. Those corporations don't need America any more. They don't need its roads, they don't need its technology, and they certainly don't need its educated middle-class workforce.

(See "An Old Industrial Era": GOP Platform Mocks Blue-Collar America, Declares It Dead.)

It's time to follow the money.

Money Source: Bankers

The rapid rise in the abuse of (c)(4) organization has allowed corporations and the mega-wealthy to inject hundreds of millions of dollars into election campaigns without revealing their identity. The Romney campaign has refused to follow Obama's lead by revealing the names of its "bundlers." But thanks to the efforts of the Sunlight Foundation, USA Today and others we know that 25 percent of them are Wall Street types who include:

Steve Schwarzman, who notoriously compared taxing bilionaire hedge funders like himself the same way we tax teachers or firefighters to Hitler's invasion of Poland -- an invasion which resulted in the deaths of men, women and children in concentration camps;

Daniel Loeb, the self-entitled whiner we called the "Robespierre of the hedge fund revolution" after he issued an "investor letter" in which he described hedge fund billionaires as exploited "labor," a persecuted minority, and the victims of socialist-style wealth distribution -- which, as he fails to mentioned, somehow resulted in increased wealth inequity;

Bill Harrison, who engineered the creation of too-big-to-fail JPMorgan Chase and recently made an inept attempt to defend megabanks like his own Frankensteinian creation;

Executives from repeat corporate lawbreakers like JPMorgan Chase and Goldman Sachs, along with representatives from morally compromised and scandal-ridden accounting firms. (See When Accountants Go Bad: Scandal-Plagued Firms Turn Out For Romney); and,

An executive from Barclays, the bank which has now admitted to illegal rate-fixing in the LIBOR scandal.

Their Money's Worth: The Bankers

Are these bankers and their fellow-travelers getting their money's worth?

A Republican President appointed Republican economist Ben Bernanke to run the Federal Reserve, only to have the Fed double down on policy that makes the rich richer at everyone else's expense. (Yes, Obama reappointed Bernanke. We'll get to that during their convention.)

The "financial sector" -- that is, Wall Street -- had a great recovery from the Great Recession, thanks to the American people, while the rest of the country remains mired in an ongoing depression which Wall Street created. And it's once again capturing a greater share of this nation's profits, squeezing out productive businesses that create jobs:

(via Business Insider)

Looks like something's working. Bankers contribute to both parties, but lately most of their love is going one way: to the GOP.

Money Source: Billionaires

Non-banking billionaires contributed to the war-chest too.New GOP-backed bills -- and more importantly, GOP-appointed judges - have allowed billionaires to keep on giving enormous sums of money to their cause once they've reached the official limit for campaign contributions. So far SuperPACs have raised nearly a quarter of a billion dollars from wealthy individuals for this year's election. And nearly 60 percent of that money came from just 47 people.

It's the finest election money can buy.

Big billionaire donors include Sheldon Adelson, Bob Perry, the Crow brothers, and assorted members of the Marriott family.

And for those of you who were worried that the bankers and billionaires might have been inconvenienced by God's wrath toward the GOP convention, you'll be relieved to know that the bundlers all got together for a nice yacht party.

Like they say down South: They're just folks.

Their Money's Worth: Billionaires

Are they getting their money's worth? Take a look at this table from William Domhoff:

The richest Americans have most of their wealth in business assets, financial securities, trusts, stocks and mutual funds, and non-home real estate. The vast majority of the population has its assets in bank accounts, home value, and pension accounts.

This table shows clearly that the Republican Party (along with a number of Democrats) is pushng policies that increase the assets of the wealthy, while at the same time fighting laws or regulations that protect everyone else's. They're fighting to keep capital gains taxes low and reduce even them further when it's now been proven that these cuts don't create jobs.

In any given year the country's 400 highest-income households earn between four and nine times as much of their income from capital gains as they do from salaries. They, along with other wealthy GOP backers, are benefiting from tax policies on everything from inherited wealth to unearned income.

And all those "hawkish" cuts avoid harming the business interests that make the wealthy even wealthier. They're targeted toward Medicare, assistance for low-income households, and anything else that can lighten the 1 percent's tax load without cutting into its profits.

Money Source: Big Corporations

In addition, every big corporation in the country has one, as do most corporate special interests, and SuperPACs collect from a variety of high-income sources.

High-dollar bankrollers for the GOP include the defense industry (surprisingly exempt from its supposed "hawkish" anti-spending stance), drug companies, and outsourcing corporations.

Then there's the US Chamber of Commerce, which receives preferential (c)(6) tax treatment while boasting that it provides political cover to unpopular corporate causes. The ugly causes it supports include bribery (through its attacks on the Foreign Corrupt Practices Act), child labor (through its promotion of Uzbek cotton sales and other goods), totalitarian Communist workforces (through its Shanghai and other chapters), and environmental destruction (through its defense against the authority of Ecuadorian courts).

If Evil ever forms its own corporation, it will know where to go for lobbying.

The Chamber overwhelmingly supports Republicans. (It endorsed only one Democrat in 2010, and didn't give him any money.) The New York Times reports that it spent nearly $90 million on lobbying, employing 98 internal lobbyists and 90 others through outside firms. It's also closely allied with the anti-democratic, anti-union organization known as "ALEC." The Chamber gets most of its funding from a few sources, and overwhelmingly from large corporations. Its positions on a variety of issues are routinely described as "extremist" -- and it has enormous influence on the GOP.

This year outside sources have already been responsible for $167.5 million in campaign spending, as of last report, of which $12.7 million was "secret" or "dark" money that can't be traced to its source.

(No wonder Republicans killed a law that would have required more transparency in campaign finance.)

Their Money's Worth: Corporations

The GOP is the ultra-large-business party. It uses rhetoric about "small entrepreneurs" and "individual initiative" to disguise the fact that is policies support the giant corporations which are crushing individual entrepreneurs, Mom and Pop operations, and start-up companies.

In fact, when President Obama offered to cut $28 million from the Small Business Administration (wrongly, in our opinion) that wasn't enough for the GOP. House Speaker John Boehner immediately demanded another $100 billion in cuts.

The big-corporation bias explains language which says that "regulation should be a helpful guide, not a punitive threat." That'll stop the outlaws! There's even stranger language which speaks of "lawmaking agencies," the "overcriminalization of behavior," and the "Federalization of offenses."

Translation: They want the Federal government stripped of its ability to regulate business or punish rogue corporations. They want to roll back the Administrative Procedure Act of 1946 which gave modern agencies their powers, leaving the Federal government powerless to protect us from the depredations of the GOP's corporate sponsors.

Romney's proposed oil and gas policies are following the money from that industry, too.

Meanwhile, new loopholes and tax breaks are leaving corporations paying less of their fair share than at any time in modern memory:

You can call all of this disgusting, or venal, or corrupt. But crazy? Not on your life. Critics should stop describing it that way and start calling it what it really is: the prostitution of democracy to the highest bidder.

The Rich Keep Getting Richer: Pro-Occupy TV Appearance (Alonya Show)

Richard Eskow — Thu, 27 Oct 2011 16:32:14 -0400

Here's the clip of a conversation we had yesterday on The Alonya Show about the new CBO report, which provides even more data on the explosion of wealth at the very top of the scale, the injustices driving Occupy Wall Street, and where we go from here.

After Alonya sets up the discussion by providing the figures, we start talking at about 1:00 minutes in (if it's not displaying properly below you can see it here):

OK, Sen. Shelby: Let's Tell the Truth About Jobs and Regulations

Richard Eskow — Mon, 26 Sep 2011 23:01:06 -0400

The Republicans have opened another front in their neverending war against regulations, those tools that help government protect us from greedy corporations. Leading the charge once again is Sen. Richard Shelby, the willing servant of Wall Street who weakened the regulations in Dodd/Frank during negotiations with Sen. Dodd ... and then refused to vote for it anyway.

After that little bit of procedural treachery, Sen. Shelby attacked the Consumer Financial Protection Bureau (Protect consumers? How dare they?) with outright falsehoods about the extent of that organization's power.

Now Shelby's fighting urgently-needed regulations by proposing something called the "Financial Regulatory Responsibility Act." It would, according to the Senator, "determine the economic impacts of proposed rulemakings, including their effects on growth and net job creation."

Sen. Shelby added: "My colleagues and I are simply proposing that each financial regulator determine whether the economic cost of a new regulation exceeds its economic benefit. If it does, then the regulation should not be implemented."

Here's where you're probably expecting a hostile comment about the Senator's proposal. Forget it. I think it's a great idea ... one one condition: The bill should be revised so that every politician who proposes de-regulating an industry, and every regulator who fails to use their powers properly, must be held to the same standard. They must first "determine the economic impact of the proposed deregulation, including its effects on growth and net job creation."

How have the deregulators performed so far? Let's look at the record:

The Republicans, aided by business-friendly Democrats, deregulated Wall Street in the nineties. Their actions in overturning Glass-Steagall and removing other protections led directly to the financial collapse of 2008. How did that affect growth and jobs?

* 20 million jobs lost worldwide
* 8 million jobs lost in the United States
* $100,000 in lost asset value for the typical American household

The GOP's right to emphasize jobs. They're our most urgent priority right now, thanks to the crisis caused by deregulation. (They're also a key topic in next week's Take Back the American Dream conference.)

But the Republicans who are now fighting to overturn Dodd/Frank should be required to honestly estimate the cost in jobs and growth if they're successful in their efforts. Republicans and Democrats who are resisting the breakup of too-big-to-fail banks or the full enactment of the Volcker rule should also be required to estimate the potential costs of their actions.

And the financial sector isn't the only industry they've been deregulating. How have they done in energy, for example? Lousiana Governor Bobby Jindal likes to say that the partial moratorium on deep-water drilling could cost his state 20,000 jobs. Oil companies like BP were allowed to "self-regulate" - which is to say, they were unregulated - based on arguments like Gov. Jindal's.

How much has the oil industry's "self-regulated" deepwater drilling cost the Gulf? BP alone is likely to spend more than $40 billion in claims, fines, and other expenses. Local businesses have lost anywhere from $4 billion to $12 billion in lost income. 29% of people with plans to visit Louisiana cancelled them after the spill, according to the Natural Resources Defense Council.

The NRDC added that "the Gulf of Mexico saw a 39 percent decline in commercial fishing landings overall between 2009 and 2010. This represents a $62 million loss in dockside sales." According to the NRDC, "The Gulf Coast Claims Facility paid 174,172 claims to individuals and businesses who have suffered damages and costs related to the spill."

Anybody who proposes deregulation in the future (sorry, I meant "self-regulation") should be required to let the public know just how much money it could cost, how many jobs might be lost, and how much of our nation's beauty and other priceless treasures might scarred or destroyed.

To be fair and balanced, let's look at the upside of deregulation. Has it created any jobs to make up for the millions it destroyed, as its supporters have promised? The Bush Administration aggressively cut regulations and appointed regulators who were industry-friendly and lax on enforcement. The result? Even before the deregulation-caused crisis, the Bush years were the worst extended period of job growth in this country since World War II. They also marked the first decline in median household incomes since the Census Bureau began tracking that information in 1967.

So a fair and balanced version of the Shelby bill would have warned the public that the last ten years of deregulation were going to cost millions of jobs and trillions in wealth. And in return, deregulation was going to produce ... well, nothing.

Yep. The more I think about Sen. Shelby's idea, the more I like it - with this little modification, of course. An honest assessment of the way that regulation affects jobs and growth, compared with the effects of deregulation, will conclusively prove that the only way to put America back to work is by putting regulations back to work for us.

The only problem is the name of the bill. The old one, the "Financial Regulatory Responsibility Act," just doesn't fit anymore. Maybe we could call it the "Deregulatory Responsibility Act." Or the "Deregulatory Irresponsibility Act." Or the "Think Before Your Act Act."

But whatever we call it, politicos like Richard Shelby should be forced to tell the truth the next time they claim they have an idea that will "protect jobs." And if the real motivation for a bill like this one is just to make it harder to protect the American people .... well, they should be forced to disclose that, too.

Why Conservatives Punish Their Victims: A Lesson From Arizona

Richard Eskow — Mon, 20 Jun 2011 22:40:53 -0400

So far from God, so close to the Republican National Committee

When some Simpsons characters took refuge in the local church after a hurricane, the church marquee read "God welcomes his victims." With that invitation, Reverend Lovejoy (an underrated Simpsons character second only to Apu on my favorites list) was alluding to that thorniest of theological questions: If the Almighty loves us, why does He subject us to so many disasters?

Modern conservatives don't need to wrestle with that kind of moral dilemma. Today's Right hates its victims, and its leaders do everything in their power to make their suffering even worse. Arizona's Republican legislators, most of them self-professed Christians, aren't singing from God's hymnal. Instead they're channeling Lyle Lovett's memorably bitter and resentful song, "God Will," as they survey the people who have been trapped in the economic wreckage of their ideology:

"God may love you but I don't/God will but I won't/and that's the difference between God and me."

Kicking 'em while they’re down

Arizona's conservatives have committed an extraordinarily mean and petty act, even by the low standards of today's Right. They've refused to change one word in a state law - a change that would have let at least 15,000 people keep receiving unemployment benefits. And they've done it even though it wouldn't have cost their state a penny.

Even Republican Gov. Jan Brewer, the guiding force behind last year's draconian anti-immigrant law (and at times so cartoonishly mean that she could be a Simpsons character herself), tried to get them to change their minds. Their response was, in effect, "You didn't ask us nicely enough." As Business Week reports, they were really holding this money hostage to push their usual corporate and rich-person menu of tax cuts and deregulation.

These Republicans used the usual right-wing euphemisms for their fealty to the rich and powerful, of course, by deploying the tired and discredited argument which Business Week summarized as "taking action on long-term measures such as business tax cuts and regulatory changes to spur the economy." Translation: They wanted more giveaways for their wealthy campaign donors.

A double dose of poison

What's happened to unemployment in Arizona?

A recession caused by deregulation nearly doubled Arizona's unemployment rate, and that's not even counting discouraged workers or the underemployed. Once their jobs were destroyed by deregulation, tax cuts failed to create any new ones. What are these Republicans pushing now? More deregulation and more tax cuts, of course. And the they're willing to sacrifice the people they've hurt to make it happen.

That's like forcing poisoning victims to drink a second helping.

Of course, these Arizona Republicans aren't just pushing financial deregulation. They're also pushing other kinds of deregulation, the kinds that will pollute the air and water, poison our kids, and endanger the safety of the fortunate few who actually have jobs.

But it's this act of gratuitous cruelty toward the unemployed that demands our attention. How can anybody live with themselves when they do something like this? Maybe every one of these Cruel Conservatives has his or her own motivation. Perhaps, like snowflakes, no two are alike.

One of them was from Snowflake, as a matter of fact – Snowflake, Arizona. State Sen. Sylvia Allen claims that she wouldn’t vote for the one-word change because it would just be a “Band Aid” for a much deeper problem, one that can only be solved by – you guessed it – deregulation and tax cuts.

Blaming the Victims

But that doesn't answer the basic question: Why? Why attack people whose lives have been shattered by conservative policies? One answer is: Because their lives have been shattered by conservative policies. Once you accept the fact that the misfortune of the unemployed isn't of their own making, then you have to ask what caused it. And since that leads to an indictment of the right-wing agenda, these conservatives can't let that happen.

Which isn't to say that there aren't people who do believe the unemployed created their own problems, despite all evidence and logic to the contrary. Undoubtedly some conservatives are sincere in their loathing for jobless people, although that calls for a nearly sociopathic lack of empathy. But then, it's easier to develop that lack of empathy when entire cable networks and news organizations are dedicated to promoting it.

Other right-wingers may be acting from a more nakedly cynical calculus. But whatever their motivation, they're all arguing that unemployment benefits encourage people not to look for work. They're saying the unemployed don't want to work. But look at the graph again: They wanted to work in 2006, but they don't want to work now?

Of course, they'll say. The Democrats have created a welfare mentality. Sure. Everybody knows you can live like a king or queen on $240 a week, which is Arizona's maximum unemployment benefit. (It has the second-lowest unemployment benefit rates in the nation.)

Conservative Freeloaders

From Business Week:

"Eventually we have to quit paying unemployment benefits," said Republican Sen. Ron Gould of Lake Havasu City. "And when does it stop being unemployment benefits and begin just being cash assistance?"

The last time a study was conducted, Arizona was a "freeloader state" state that took in $1.30 in Federal money for every $1.00 it contributed in Federal taxes. Which raises the question: At what point does that 30-cent giveaway to bolster the prosperity of Sen. Gould's constituents stop being a case of one group of Americans helping another, and start "just being cash assistance?"

At last, after attending all those ribbon-cuttings for stimulus programs they opposed, these hypocritical conservatives have finally turned down some Federal money. They won't turn down money that boosts Arizona businesses, of course, but they'll happily refuse money that gives the unemployed the support most Americans know they deserve.

God may welcome his victims, but the Right doesn't.

Pardon my language

Somewhere there's a different United States, a nation that existed in the past - or perhaps just in the imagination. In that United States, conservatives are sincere and well-meaning individuals who merely have a different view of the world. That United States is invigorated and strengthened by an honest exchange of ideas between these conservatives and people of the moderate Left. Through high-mind debate they eventually agree on wise and judicious policies.

That's not the country we live in today. People like these Arizona legislators aren't high minded or well-meaning. That's why I'm not a big fan of bipartisanship - or what's called "moderation" nowadays, but is really just appeasement of a radical fringe.

Hey, I try to be thoughtful, considerate, well-spoken. I try to respect all points of view. It would feel good to adopt that lofty, "above the left and right" posture that makes a person look judicious and even-tempered in Washington nowadays. I've even been trying to clean up my language. But you know what? To me, Sen. Ron Gould of Lake Havasu City just seems like a dick.

I'm sure the Senators from Snowflake and Lake Havasu City are nice and decent enough as individuals. But politically they're neither. The pain they're inflicting is too brutal, too senseless, too pointless, to warrant "civil discourse." The kindest thing to be said right now about these Arizona conservatives and all those who support them is this: God may love Sen. Sylvia Allen, but I don't. God may forgive Sen. Gould, but I don't.

I guess that's the difference between God and me.

Crony Capitalism: Wall Street's Favorite Politicians

Zach Carter — Tue, 28 Sep 2010 17:02:59 -0400

A full 90 members of Congress who voted to bailout Wall Street in 2008 failed to support financial reform reining in the banks that drove our economy off a cliff. But when you examine campaign contribution data, it's really no surprise that these particular lawmakers voted to mortgage our economic future to Big Finance: This election cycle, they've raked in over $48.8 million from the financial establishment. Over the course of their Congressional careers, the figure swells to a massive $176.9 million.

The complete list of these Crony Capitalists is below, along with the money they pulled in from Big Finance, according to data compiled by the Center for Responsive Politics (opensecrets.org). The career data goes back to 1989. Of the 69 House members who voted with Wall Street on both the bailout and financial reform, 60 are Republicans, while nine are Democrats. All 21 Senators who voted with Wall Street on both issues are Republicans, and Republicans raked in over 90 percent of the total campaign contributions. Here's a chart showing Wall Street's total contributions to this crowd for the 2010 cycle, by political party:

And here's one showing total Wall Street contributions over the course of their careers:

These aren't the only politicians carrying water for Wall Street—only the most flagrant. Some of the bank lobby's savviest servants on Capitol Hill do their dirty work early in the legislative process. They push through technical amendments and deploy complex procedural tricks to defang a bill, but when the final vote comes, they can still create the appearance of taking a stand against Wall Street's interests. Rep. Melissa Bean, D-Ill., is a master of this technique, and Tea Party favorite Sen. Scott Brown, R-Mass., was able to claim credit for voting in favor of reform after demanding—and receiving—a host of big bank giveaways in return for his vote.

Nor are Republicans the only recipients of Wall Street largesse. Bean, for instance, has pulled in over $773,000 from Wall Street in the 2010 cycle alone, while working overtime to carve loopholes into new consumer protections (she's scored $2.4 million over the course of her Congressional career). And the Democratic leadership has received millions as well.

When it comes to dealing out economic damage, no special interest group has been able to wreak more havoc that Big Finance. After inflating an $8 trillion housing bubble and sparking a recession that has cost the economy over 8 million jobs, public pressure to crack down on Wall Street was intense. And the public is still clamoring for Wall Street accountability—after two years in office, the Wall Street reform bill remains the most popular legislative effort championed by President Barack Obama, and getting tough on Big Finance has been a reliable re-election strategy for embattled incumbents.

But harnessing the Wall Street beast proved a tortuously long and difficult process, taking nearly two years despite its economic urgency. And while the bill that Congress approved this year has plenty of virtues, many of the most critical reforms were simply not addressed by the legislation. The too-big-to-fail financial behemoths that taxpayers bailed out in 2008 are even bigger today, banks can still gamble with taxpayer money, and the foreclosure crisis continues to ravage neighborhoods across the country. Until these issues are addressed, the U.S. economy will remain beholden to Wall Street's bonus-crazed whims.

But if you follow the money, it's obvious why so much work remains to be done on financial reform. This year alone, Wall Street spent a staggering $251 million fighting financial reform. According to a separate analysis of campaign contributions performed by Public Citizen, lawmakers who voted with Wall Street on both the bailout and reform received nearly triple the campaign cash of those who opposed Wall Street (figures in the Public Citizen study don't correspond to those I've compiled, as Public Citizen examined contributions from 2007 through July of 2010).

Despite the popularity of Wall Street reform, 90 members of Congress didn't even want to publicly pretend to support reining in almost universally reviled banks. When you're trying to decide which bums to throw out in November, here's one place to start. These members of Congress are okay with setting up economic calamities, and they don't mind paying for them with your tax dollars.

Here's how Wall Street's contributions break down among Wall Street's 21 Senate Cronies. For 2010:

For their careers:

And here are all of the Cronies, along with their Wall Street hauls:

Senator	2010 Wall Street Cash	Career Wall Street Cash
Sen. Lamar Alexander (R-TN)	$1,600,000	$4,900,000
Sen. Robert Bennett (R-UT)	$1,500,000	$2,600,000
Sen. Kit Bond (R-MO)	$333,600	$3,300,000
Sen. Richard Burr (R-NC)	$1,500,000	$3,300,000
Sen. Saxby Chambliss (R-GA)	$2,500,000	$3,500,000
Sen. Tom Coburn (R-OK)	$451,700	$1,200,000
Sen. Bob Corker (R-TN)	$3,100,000	$3,300,000
Sen. John Cornyn (R-TX)	$3,200,000	$4,700,000
Sen. John Ensign (R-NV)	$1,300,000	$2,600,000
Sen. Lindsey Graham (R-SC)	$1,100,000	$2,000,000
Sen. Judd Gregg (R-NH)	$233,200	$1,100,000
Sen. Orrin Hatch (R-UT)	$1,400,000	$2,600,000
Sen. Kay Bailey Hutchison (R-TX)	$1,400,000	$4,700,000
Sen. Johnny Isakson (R-GA)	$1,500,000	$4,200,000
Sen. John Kyl (R-AZ)	$2,800,000	$3,800,000
Sen. Dick Lugar (R-IN)	$412,200	$2,500,000
Sen. John McCain (R-AZ)	$947,600	$34,000,000
Sen. Mitch McConnell (R-KY)	$4,300,000	$5,300,000
Sen. Lisa Murkowski (R-AK)	$268,200	$909,700
Sen. John Thune (R-SD)	$1,600,000	$3,900,000
Sen. George Voinovich (R-OH)	$435,200	$2,800,000
21 Republicans
0 Democrats
Senate Total	$31,881,700	97,209,700

House Member	2010 Wall Street Cash	Career Wall Street Cash
Rep. Rodney Alexander, R-La.	$106,500	$422,300
Rep. Spencer Bachus, R-Ala.	$611,600	$4,400,000
Rep. Gresham Barrett, R-S.C.	$20,400	$806,700
Rep. Marion Berry, D-Ark.	$24,900	$663,700
Rep. Judy Biggert, R-Ill.	$395,000	$1,900,000
Rep. Roy Blunt, R-Mo.	$1,200,000	$3,800,000
Rep. John Boehner, R-Ohio	$1,300,000	$3,700,000
Rep. Jo Bonner, R-Ala.	$90,400	$702,200
Rep. Mary Bono Mack, R-Calif.	$190,000	$733,400
Rep. John Boozman, R-Ark.	$257,700	$491,000
Rep. Dan Boren, D-Okla.	$123,100	$722,200
Rep. Rick Boucher, D-Va.	$92,700	$1,400,000
Rep. Charles Boustany Jr, R-La.	$226,300	$934,600
Rep. Kevin Brady, R-Texas	$157,000	$840,500
Rep. Henry Brown, R-S.C.	$35,700	$494,000
Rep. Vernon Buchanan, R-Fla.	$336,800	$1,400,000
Rep. Ken Calvert, R-Calif.	$180,300	$940,300
Rep. Dave Camp, R-Mich.	$588,000	$1,700,000
Rep. John Campbell, R-Calif.	$413,400	$1,200,000
Rep. Eric Cantor, R-Va.	$2,100,000	$4,400,000
Rep. Mike Castle, R-Del.	$749,100	$3,200,000
Rep. Howard Coble, R-N.C.	$23,400	$502,500
Rep. Tom Cole, R-Okla.	$110,000	$686,000
Rep. Mike Conaway, R-Texas	$161,500	$711,800
Rep. Ander Crenshaw, R-Fla.	$86,100	$717,000
Rep. Henry Cuellar, D-Texas	$90,600	$606,900
Rep. Charlie Dent, R-Pa.	$177,900	$881,000
Rep. Chet Edwards, D-Texas	$324,200	$1,900,000
Rep.Vernon Ehlers, R-Mich.	$8,500	$292,200
Rep. Jo Ann Emerson, R-Mo.	$143,900	$904,400
Rep. Mary Fallin, R-Okla	($1,000)	$340,700
Rep. Rodney Frelinghuysen, R-N.J.	$86,200	$840,300
Rep. Jim Gerlach, R-Pa.	$251,600	$1,800,000
Rep. Kay Granger, R-Texas	$140,000	$1,100,000
Rep. Wally Herger, R-Calif.	$171,500	$1,100,000
Rep. Peter Hoekstra, R-Mich.	($1,000)	$300,600
Rep. Bob Inglis, R-S.C.	0	$572,800
Rep. Peter King, R-N.Y.	$173,900	$1,600,000
Rep. Mark Kirk, R-Ill.	$1,900,000	$4,200,000
Rep. John Kline, R-Minn	$170,900	$989,100
Rep. Jerry Lewis, R-Calif.	$31,800	$748,000
Rep. Daniel E. Lungren, R-Calif.	$147,700	$622,500
Rep. Howard McKeon, R-Calif.	$132,100	$1,100,000
Rep. Gary Miller, R-Calif.	$144,500	$902,000
Rep. Harry Mitchell, D-Ariz.	$130,900	$558,000
Rep. Sue Myrick, R-S.C.	$93,600	$1,200,000
Rep. Soloman Ortiz, D-Texas	$40,200	$381,700
Rep. George Radanovich, R-Calif.	$24,900	$462,000
Rep. Mike Rogers, R-Ala.	$128,200	$1,000,000
Rep. Hal Rogers, R-Ky.	$50,200	$468,000
Rep. Ileana Ros-Lehtinen, R-Fla.	$127,000	$986,000
Rep. Paul Ryan, R-Wis.	$531,500	$1,900,000
Rep. Jean Schmidt, R-Ohio	$121,900	$519,700
Rep. John Shadegg, R-Ariz.	$39,700	$1,200,000
Rep. Bill Shuster, R-Pa.	$30,700	$403,600
Rep. Mike Simpson, R-Ind.	$20,500	$266,900
Rep. Ike Skelton, D-Mo.	$112,500	$524,200
Rep. Lamar Smith, R-Texas	$258,900	$1,300,000
Rep. Mark Souder, R-Ind.	$40,500	$405,800
Rep. Zack Space, D-Ohio	$169,300	$476,300
Rep. John Sullivan, R-Okla.	$79,200	$494,800
Rep. Lee Terry, R-Neb.	$202,600	$1,400,000
Rep. Mac Thornberry, R-Texas	$42,500	$603,400
Rep. Patrick Tiberi, R-Ohio	$555,500	$2,800,000
Rep. Fred Upton, R-Mich.	$81,700	$929,400
Rep. Greg Walden, R-Ore.	$180,700	$732,400
Rep. Zach Wamp, R-Tenn.	0	$715,700
Rep. Joe Wilson, R-S.C.	$155,500	$580,200
Rep. Frank Wolf, R-Va.	$90,400	$1,100,000
60 Republicans	$15,873,400	$72,443,800
9 Democrats	$1,108,400	$7,233,000
House Total	$16,981,800	$79,676,800

GOP's "Pledge" to Rob the Middle Class: No Jobs, No Health Care, No Security

Richard Eskow — Thu, 23 Sep 2010 15:18:43 -0400

Congressional Republicans released their "Pledge for America" today with a press event at a Virginia hardware store, and a hardware store was definitely the right choice: If these policies ever take effect you're going to get screwed.

It was slightly amusing to see these wealthy tribunes in their pricey business-casual clothing, dressed to look the way they must imagine "real people" do. But other than providing some revenue for Dockers pants and Johnston & Murphy shoes, what were the economic implications of the GOP's Pledge?

Once you strip away the rhetoric, the answer is simple: Off the top, their plan is a trillion-dollar giveaway to the rich - at everybody else's expense. Their "pledge" would slash needed spending, kill jobs and end any hope of growing the economy. It declares open season on the public's health and safety with a deregulation agenda that would unleash BP, Goldman Sachs, and every other corporation whose risky behavior endangers us. It would lead to even more financial crashes and environmental disasters. Firefighters, cops,and teachers would be laid off in droves. The deficit would soar. We'd face a permanently stagnating economy. The middle class would wither away.

That's the future they're offering. It's Bush on steroids, fattened up and ready to feast on ... you. If you like today's economy, you'll love the one these guys are cooking up.

If this document wasn't written by lobbyists then it was certainly submitted for their review and approval. And there's a lot for them to love. Here's what the Republicans propose.

The $4 trillion hole

First and foremost, they would make the Bush tax cuts permanent - not just for the middle class, as the Democrats propose, but for the wealthiest Americans, too. The total ten-year cost of their tax proposal alone is $4 trillion, of which $1 trillion would go to this high-earning, Republican demographic. What will they do to offset this giveaway for the rich? They say they'll "roll back government spending to pre-stimulus, pre-bailout levels, saving us at least $100 billion in the first year alone."

So, let's see: $100 billion in supposed savings in that first year, versus $400 billion in tax cuts. In the fuzzy math of the GOP, that's called deficit reduction. Their policies would benefit the wealthiest households in the country, with special attention lavished on inherited wealth (call it the "Paris Hilton handout") and hedge fund managers (the "hedge fund handout"). Consider this: The 25 top hedge fund managers earn at least $1 billion a year, and are taxed at 15% (those soon-to-be-unemployed police officers and teachers pay more). By extending those cuts, the GOP plan would cost the rest of us at least $62 billion over ten years, putting it in the billionaires' pockets instead.

The Pledge quotes the adage, "to whom much is given, much is expected." But since they're giving even more to those to whom much has been given, the "much is expected" part must be an unsubtle hint to the ultra-rich to keep those contributions coming.

Where would they cut, exactly? They don't say. David Frum, a former speechwriter for George Bush, explains why: "Here is the GOP cruising to a handsome election victory. Did you seriously imagine that they would jeopardize the prospect of victory and chairmanships by issuing big, bold promises to do deadly unpopular things?"

Deadly unpopular things. At least Frum is honest enough to say out loud what other Republicans won't: They're going to subsidize their tax breaks for the wealthy by doing things the American people will hate. They won't just cut the everyday functions of government that make our lives better. Returning government spending to "pre-stimulus, pre-bailout levels" also means ending the repair work that's currently being done to fix what their policies have broken. That includes getting people back to work, providing loans for small businesses, and cleaning up the Gulf of Mexico.

Fire a cop, buy a banker

But even though they slither past the specifics, the GOP leaders left some broad hints about their defunding priorities. In a graph that lists government spending, for example, the categories aren't listed by size, or alphabetically. The ones at the top are the targets, and which figure prominently? The Departments of Health and Human Services, Agriculture, Education, Justice ... you see where this is going, don't you? (Yes, the Justice Department's on the list. Law enforcement isn't always a convenient thing in their America.)

Their list of 2,050 different assistance programs singles out Federal funding to the states—states that are in desperate need of federal support to keep people working in the fiscal aftermath of GOP policies. They need Federal aid to avoid the kind of cuts they'll be forced to make otherwise: laying off cops and teachers, slashing Medicaid, letting roads crumble, and shutting down emergency services, just to name a few.

Why not rename this pledge the "fire a cop, buy a banker his own private island plan"?

This proposal adds to the clamor of Washington voices calling to slash Social Security. In order to pay for their tax break—a giant handout to the wealthiest among us—they'll need to welsh on the loan the American middle class gave to the government through its payments to the Social Security Trust Fund. That lack of specifics is probably why Rep. Paul Ryan, R-Wis., who wrote a much more specific plan, was notably absent from today's event. Ryan's plan included deep cuts in Social Security benefits and a privatization plan that puts Wall Street gamble with our retirement security.

Ryan also provided the specifics on health care that these guys won't: He wants to convert Medicare into a voucher system, leaving individual seniors to cope with buying health insurance. He'd raise the eligibility age for Medicare, as well as for Social Security, and would raise premiums while cutting benefits. The Ryan plan would eventually cut Medicare by 76%. The GOP would roll back the new coverage provided by this year's health law while adding many seniors to the ranks of the uninsured. And some estimates suggest that half of all seniors would live in poverty under the Ryan plan.

Ryan, like Frum, committed the crime of honesty. Remember: Deadly unpopular things. Ryan's presence would have reminded the public of what they actually intend to do, instead of hiding behind Pledge's weasel words: "We will (require) a full accounting of Social Security, Medicare, and Medicaid ... preventing the expansion of unfunded liabilities ..."

But wait, as the old commercials used to say. There's more.

Not-so-small business

The Pledge also promises to give "small businesses" a tax deduction equal to "20 percent of their business income" - but, as Rachel Maddow and others have observed, their definition of "small business" includes giant corporations like Bechtel and PriceWaterhouseCoopers. That would mean another multibillion-dollar tax break for the wealthiest among us.

This "deficit-conscious" plan wants to expand the "military/industrial welfare state," too. "We are a nation at war," it says, calling to "fully fund" a missile defense system that's already plagued with persistent test failures, laden with cost overruns, and which most experts don't think is needed or can ever wok. What it can do, however, is transfer a lot of middle-class income to Boeing and Northrop Grumman. We've already spent more than $60 billion on the "Star Wars" missile program in the last eight years, in fact. Why, that's nearly as much as the GOP intends to give to the top 25 billion-dollar-a-year hedge fund managers!

They dress their plan up with the usual mumbo-jumbo about government spending that's "crowding out the private economy." That may sound good, Tea Partiers, but think about: How does it do that, exactly? Every government employee buys things from private companies—from supermarkets, pharmacies, auto dealers, and yes, hardware stores. Makes no sense when you think about it.

And while their rhetoric's pretty polished, they tried a little too hard to channel the Founding Fathers with lines like this one: "Whenever the agenda of government becomes destructive of these ends, it is the right of the people to institute a new governing agenda and set a different course." (Note for whichever lobbyist wrote that: "Agenda" is a business word, not an inspirational one. It doesn't fit. It's like writing "When in the course of human events we are called upon to write a Mission Statement ...")

Here's the bottom line: They'll raid your money to make their rich patrons even richer. The middle class will continue to wither away, and those manage to hold on will be worse off than ever. More and more people will slip into permanent unemployment, poverty, and penurious old age. More roads will crumble. More aging pipelines will explode in towns like San Bruno, Calif. This "pledge" is the oldest kind of promise in the world: the promise than con men make to their victims.

Remember, the Republicans made a lot of promises the last time they took control of the Congress. They promised to create more jobs, and their policies led to record unemployment. They promised to limit their own terms, then settled in for a long comfy stay in Washington. They promised that businesses would regulate themselves, and both the Gulf Coast and the Main Street economy were ruined.

It brings to mind the words of Chief Joseph of the Nez Perce: "They made us many promises, more than I can remember, but they never kept but one: they promised to take our land and they took it." Substitute "our wallets" for "our land," and that's what we'll get with the Pledge to America. What they're really promising is this: No jobs, no health care, no security, no future.

___________________________

This post was produced as part of the Curbing Wall Street and Strengthen Social Security projects.

Wall Street Wrecked The Economy, Not Big Government

Zach Carter — Tue, 21 Sep 2010 10:02:18 -0400

Over at bloggingheads, my CAF colleague Bill Scher discusses the new international banking standards with Conn Carroll, a conservative blogger for The Heritage Foundation. Carroll actually agrees with a lot of what I have to say about Basel III, but I he draws conclusions from my post that overemphasize the role of regulation and ignore the insane lobbying and outright fraud that Wall Street deployed to create a crisis.

The fact that Carroll and I can agree on this stuff (to an extent) shouldn't come as a terrible shock—Wall Street reform is about the basic functioning of the economy—it's not an issue that needs to ignite ideological conflict. Here are his key comments:

"I like the acknowledgement that the problem of this last financial crisis had to do with a problem of regulation."

Nothing wrong there. You'd have to be insane to believe that financial regulations—or the regulators who implemented them—were up to snuff. But here's where I part ways with Carroll:

"When this economy started melting down and the financial crisis happened . . . the reason is regulation. It wasn't because of the free market, it was because of Basel II with their regulations saying that AAA-securities were an asset that qualified created a huge demand for all of these mortgage-backed securities."

Basel II was indeed terrible, and the credit rating agencies were totally corrupt (quite possibly fraudulent) operations. But you can't blame Basel II and the rating agencies for all of the Wall Street excess that created the crisis. Basel II didn't force banks to buy up lousy mortgage-backed securities that rating agencies had evaluated improperly. Nobody required banks to rely on bad ratings alone. Bankers and traders were paid very well to find assets that would enrich their firms. They got it completely wrong, destroyed their companies and nearly destroyed the global economy. The fact that rating agencies also got it completely wrong doesn't excuse this behavior, nor does the fact that regulators also relied on rating agencies. Bankers found loopholes, exploited them and wrecked the economy.

In other words, the financial crisis is a story about regulation allowing reckless behavior, not a story about regulation encouraging reckless behavior. Bad regulations let the free market to run amok—they did not tie the market's hands and require market actors to do reckless things they really didn't want to do.

Plenty of people at major Wall Street banks knew that they were courting disaster, but went ahead in the quest for bigger bonuses. Everybody on Wall Street who packaged mortgage-backed securities and collateralized debt obligations knew the rating agencies were meaningless, because they had to work with those same rating agencies in concocting their own toxic securities.

What's more, plenty of people on Wall Street knowingly bought the toxic securities that they themselves created. ProPublica has documented the most damning case of this practice, a situation in which banks sold crappy CDOs to investors, but actually purchased risky parts of the CDO themselves in order to establish fake demand for the entire product. Merrill Lynch was the most frequent offender in this respect, but Citigroup and Goldman Sachs adopted the same scheme.

Rating agencies and Basel II didn't force Goldman to concoct a "shitty deals" and brag about them over email, and they didn't force Lehman Brothers or Bank of America to adopt Enron-style schemes to conceal debt from investors.

The lousy financial regulations that lead up to the crisis were not written by wild-eyed consumer advocates unaware of the potential consequences. They were written by policymakers who were extremely sympathetic to the global financial elite, and in many cases, by policymakers who were members of the global financial elite. They knew these rules wouldn't do much to affect banker behavior, which is why they pursued them.

That point applies to just about every faulty regulatory maneuver preceding the crisis. In the U.S. alone, policymakers lifted leverage caps on Wall Street investment banks, deregulated the derivatives market, repealed Glass-Steagall and refused to regulate the mortgage market. That was because regulators had been corrupted by the financial establishment, not because it's just impossible for regulators to figure out how to write decent financial rules.

None of this, of course, implies that international regulators should continue to rely on rating agencies or exclusively rely on any risk-weighted capital requirements. On this, Carroll and I agree. Whatever the criteria for risk-weighting, Wall Street will come up with some way to game those rules. When they do, we'll all wish Basel III had imposed a meaningful, hard leverage cap as a back-up.

The Many Sins of Deregulation

Isaiah J. Poole — Thu, 26 Aug 2010 15:18:10 -0400

Wells Fargo Overdraft Scam Makes Elizabeth Warren More Important Than Ever

Zach Carter — Thu, 12 Aug 2010 15:47:09 -0400

A landmark court ruling on Wells Fargo's outrageous overdraft scam has the potential to return hundreds of millions of dollars in stolen funds to consumers all over the country. But like many of the banking scandals from the past decade, there's more to the story than simple bank predation. When banks devised this new program to swindle their own customers, bank regulators did not merely look the other way, they actively encouraged the behavior by writing a new rule approving a practice that courts now believe to be unfair and deceptive. The Wells Fargo case should be viewed as a clear example of why Elizabeth Warren ought to head the new Consumer Financial Protection Bureau.

The overdraft scam that Judge William Alsup slapped down yesterday is not unique to Wells Fargo-- every big bank in the country has been doing it for years, and if it's never happened to you, it's probably happened to your friends or family. Banks make a lot of money from overdraft fees-- $38 billion last year, compared to a combined industry profit of just $12.5 billion. They don't make that money by accident. Internal company emails and memos from the Wells Fargo case show bankers spending a lot of time figuring out how to maximize the number of overdraft charges they can hit their checking customers with.

One way is by changing the order in which your transactions are processed. Most people think that their checks and debit card purchases are processed in the order that they make them. But that's not how banks actually do it. Instead, they wait for you to make several purchases, and then process the most expensive purchases first. This method pushes a customer's balance to zero faster than the honest way that actually reflects buying habits. And the sooner your balance goes to zero, the more overdraft fees the bank can hit you with.

Say you've got $80 in your checking account, and you decide to pay some bills and run some errands. You spend $30 on gas and another $20 on your water bill. Later, you head to the grocery store and spend $81—oops!—on groceries. To reasonable people, it looks like you're going to get hit with an overdraft fee. That last purchase put you over the line. But instead, the banks reorder your transactions, processing the groceries first. Now you're below zero, and they can charge additional fees for your gas and water bills. Wells Fargo charged up to $39 per overdraft. This one mistake cost you $117.

"The bank's dominant, indeed sole, motive was to maximize the number of overdrafts and 'squeeze as much as possible' out of customers who spent more than they had in their accounts," Alsup wrote in his ruling.

In other lines of business, this kind of scheming is known as "backdating," and it's considered "fraud." But Wells Fargo officials are unlikely to be prosecuted for this outright theft, because they were aided and abetted by the top federal bank regulatory agency, the Office of Comptroller of the Currency. In 2004, the OCC issued an interpretive letter granting formal approval to overdraft backdating.

Thanks to yesterday's ruling, every dime that Wells Fargo took from its customers with this ridiculous backdating scam will have to be repaid. The company will certainly appeal the verdict, and the court case itself is only a part of the overdraft story. It's not at all obvious that consumers really want overdraft "protection," and those that do certainly don't want to be conned into paying out unnecessary fees. An easy way to prevent this kind of abuse is to notify consumers that a purchase will overdraw their account, and require an additional step authorizing the charges—the same way you have to approve ATM fees before banks take your money.

All of this shows how important the new Consumer Financial Protection Bureau is going to be. The CFPB will have much better institutional incentives than the OCC, which is structured to focus on bank profitability first, and consumer protection as an afterthought. The CFPB, by contrast, will have no duties other than keeping the public safe from predatory bankers.

But who runs the agency will be just as important. The OCC has had a weak consumer protection record for years, but its current slate of managers has gone to previously unthinkable lengths to protect banks at the public's expense. Whoever President Barack Obama appoints to run the CFPB will be setting the tone for an agency for years to come. That's why Obama must appoint Elizabeth Warren to head the CFPB. She's spent her entire career protecting consumers from abusive banks, she knows the tricks and traps, but she also understands that families still need credit—they just don't want to be conned into lousy deals. Nobody else has her level of expertise on these issues, her strong record as a reformer, or her commitment to finding the right solutions to complicated problems.

The CFPB is designed to be a responsible advocate for consumers. Elizabeth Warren has spent her entire career doing just that. If we want to prevent future scams like the one Wells Fargo just got in trouble for, we'll need Elizabeth Warren at the CFPB.

Robert Rubin Is Still Wrong And Joseph Stiglitz Is Still Right

Zach Carter — Wed, 11 Aug 2010 11:46:45 -0400

Robert Rubin and Joseph Stiglitz are going public on jobs and the deficit, in what looks very much like a re-run of a major policy debate during the Clinton era. The dispute is simple—should the government focus on putting people back to work, or should it try to cut the deficit? Stiglitz wants to see more jobs, Rubin wants to shrink the deficit. Policymakers should listen to Stiglitz.

Rubin is the Democratic Party's Alan Greenspan. In the 1990s, he was heralded as a genius for making policy calls that ultimately wrecked the economy. Rubin pushed for deficit reduction instead of a jobs policy in the Clinton years, and was the driving force in the Clinton administration's devastating moves to deregulate Wall Street. For several years, Rubin's policies looked good. Despite the focus on the deficit instead of jobs, the Clinton years saw a huge boom in employment. Wall Street profits were through the roof, and the economy was roaring.

But at the end of Clinton's second term, it was clear that all of these good times had been fueled not by sound economic policy, but by a reckless and unsustainable Wall Street bubble. Banks were backing every dot-com business plan brought their way, and when everybody figured out that Pets.com was not going to be the next Home Depot, things fell apart. The economy slipped into a mild recession, which would have been devastating had policymakers not inflated a housing bubble to "rescue" the economy from the dot-com fallout.

Rubin was Clinton's Treasury Secretary, while Stiglitz served as Chair of Clinton's Council of Economic Advisors. Stiglitz fought all of Rubin's wrong-headed policies, but ultimately lost. Stiglitz was able to fend off some of the most outrageous financial deregulation, but when he left office, Rubin pounced and pushed through the repeal of Glass-Steagall, a Depression-era law that prevented banks from gambling in the capital markets casinos with taxpayer money. Facilitating that banking excess was a key cause of the 2008 financial collapse, and it was Robert Rubin's brainchild.

So why should anybody take Robert Rubin's advice on economic policy? On virtually every important decision during the Clinton years, Rubin got it wrong, and getting it wrong put the global economy on a path to destruction.

Well, here we go again, only this time, conditions are worse. Instead of unemployment hovering around 8 percent, it's near 10 percent, and nobody sees any sign of it abating significantly over the next year. Once again, instead of promoting a jobs agenda, Rubin wants to focus on the deficit. It's an instinct shared by most of Rubin's Wall Street colleagues (Rubin is a former co-Chairman of Goldman Sachs, and served on Citigroup's board in the years leading up to Citi's monstrous bailout). The same banker buddies who wrecked the economy and forced the government to spend trillions rescuing the banking sector.

By contrast, the deficit looks pretty good. Deficits are only an immediate problem when investors are worried about default or inflation, and demand a very high interest rate to compensate them for this risk. So if the deficit were a big deal right now, we'd see high interest rates on U.S. Treasury bonds. But we don't see that at all. Yesterday, the rate on the 10-year bond fell to 2.77 percent. During George H.W. Bush's presidency, the rate routinely eclipsed 9 percent.

But mainstream news anchors are giving Rubin a platform to spew Wall Street buzzwords in order to gin up support for a deficit reduction program. Fareed Zakaria interviewed Rubin on his CNN show this weekend, where Rubin had this to say:

I wouldn't do a major second stimulus because I think...we run a risk that it could be counterproductive in creating a lot of additional uncertainty and undermining confidence.

"Confidence" here means "investor confidence in the ability of the United States to pay off its debts." This is empty spin language. Investor confidence is measured by interest rates. Investors are currently signaling that they have more confidence in the United States' fiscal rectitude than they have had in decades. Borrowing money for new stimulus would not be punished by the market, and the cost of borrowing that money is at its lowest to the Treasury in decades.

If we don't spend money to create jobs, the private sector isn't going to be able to take care of it on its own. Businesses aren't hiring because there is no demand for their products. Put another way, since everybody is broke and out of a job, nobody can afford to buy things, which means businesses have no customers. Without any customers, businesses have no reason to hire people.

So in the near-term, jobs and deficit reduction are in direct conflict. If you go after the deficit, you are going to hammer the unemployment rate. What's more, recent efforts by countries to cut their deficits by reducing spending have actually been counterproductive. Ireland slashed social programs, only to see its deficit increase, because the spending cuts hurt economic growth so much that the government's tax revenues declined dramatically.

Rubin wants to implement a deficit reduction plan now that would take effect in two years. Long-term deficit reduction isn't a terrible idea, economically. The biggest threat to U.S. fiscal stability over the next several decades is the increasing cost of health care, which drives up Medicare expenses. While it's not an immediate necessity, a program designed to bring down the cost of health care over the next couple of decades would in fact be a good idea (Contrary to Republican attacks, President Barack Obama's health care bill actually does cut health care costs and will reduce the deficit over the long-term. Nevertheless, more could be done.).

The trouble is, there is very little evidence right now that the economy is going to be okay in two years, and Medicare isn't going to bankrupt the government in two years. Cutting spending while the economy is still weak means hurting jobs and slowing growth. Even the Federal Reserve is clearly worried about the prospect of a double-dip recession, which is why it embarked on a new program yesterday to lower interest rates further in order to make borrowing money cheaper for American citizens and businesses.

Stiglitz sees things differently. If we want a healthy economy, we have to have financially healthy households. That means getting people back to work, and it means spending serious money to create those jobs. He was right in the 1990s. He's right today.