Pete Peterson

The Slick "No Labels" Plan to Duck Debate, Cut Social Security and Coddle the 1%

Richard Eskow — Mon, 16 Jul 2012 22:31:34 -0400

The Jeff Daniels character from The Newsroom would know what to ask the operators of an allegedly "grass roots" group called "No Labels":

"Why won't you publish your list of donors?"
"What's wrong with having legislators debate the issues publicly? Isn't that how representative democracy works?"
"How can you call yourself 'centrist' when so many of your ideas are unpopular, and in fact are even too conservative for most Tea Party members?"

He might have another question, too:

"What's wrong with labels? Don't they let us know what we're buying?"

The Newsroom is fiction, of course. But then, so is "No Labels." It's the creation of overpaid political insiders who work hand in glove with longtime opponents of Social Security and Medicare, pushing the agenda of the wealthiest among us by exploiting the public's understandable frustration with gridlocked government.

Decoys

I'm sure that some decent people are attracted to No Labels without realizing that a label is precisely what's needed. Labeling would tell them that the group was created by political hacks from both parties who scrupulously hide their funding sources but are associated with people like anti-Social Security billionaire Pete Peterson.

The No Labels website describes it as a "group of Republicans, Democrats and independents dedicated to a simple proposition: We want to help move America from the old politics of point-scoring toward a new politics of problem-solving."

The group claims to oppose the "powerful interest groups (who) work to push our leaders and our political parties apart," adding: "They demand rigid commitment to far left or far right ideology, and they ruthlessly punish people who step out of line."

No Labels has never caught on, despite massive publicity and lots of funding. So why is it even worth mentioning? Because it sheds light on a much larger plan, a richly funded sales blitz that's hyping far-right positions as mainstream opinion while touting lobbyists and political operatives as the plain-spoken voices of Main Street America.

We'll be seeing a lot more of this crowd right after the election, as the No Labels crowd tries to sell us a Grand Bargain which protects the wealthy while demanding even deeper sacrifices from the rest of us.

Just Folks

"People on the extreme minorities," says the No Labels website, "... have paralyzed our government at a time of grave national crisis. People on the far left and far right represent just a fraction of the American public, but they exercise power well beyond their numbers ..."

But what does No Labels represent? Its three co-founders are a Republican Party operative named Mark McKinnon, a right-leaning Democratic Party operative named Nancy Jacobson, and a billionaire-funded operative named David Walker. These three Washington insiders say they'll represent ordinary Americans against ... Washington insiders.

Who are they?

McKinnon worked on George W. Bush's campaign before becoming a senior executive at Hill & Knowlton, the Beltway PR firm whose clients prior to his joining included the tobacco industry as it tried to suppress proof that cigarettes cause cancer, and Bank of Commerce and Credit International after it was hit with faced drug-money laundering charges. It continues to represent a variety of dictatorships around the world, and is currently helping the oil and gas industry confuse the public about the health implications of fracking.

Jacobson worked for Bill Clinton, conservative Democrat turned Chamber of Commerce lobbyist Evan Bayh, and and the right-leaning Democratic Leadership Council, and has a raised large sums of money for "centrist" (right-leaning) Democratic candidates. She also reportedly worked as a de facto industry lobbyist, as a PAC Director raising money for Congressional candidates sympathetic to her industry's interests.[1] She is married to another Washington insider, Mark Penn, who is the CEO of Burson-Marsteller.

Walker is a longtime associate of right-wing billionaire Pete Peterson (who, as his press staff never fails to reminds me, sometimes also funds less political areas of economic research through his Foundation.) Walker's work with Peterson, however, has been dedicated for many many years to the single-minded pursuit of a policy package that would cut Social Security and Medicare benefits while simultaneously lowering the top tax rate for the wealthiest Americans.

That agenda forms the basis of an American austerity program similar to that which is currently devastating Europe's economy, and which has been packaged for domestic US consumption as the "Simpson Bowles plan."

Bait and Switch

No Labels has a clever two-fold strategy: First, it packages far-right ideas as those of the "political mainstream" by ignoring polling data and instead finding members of the Washington elite in both parties - righwing Clintonian Democrats, plus Republicans - willing to present them as a "consensus" view.

Then it packages those proposals along with good ideas - and good-sounding ideas - so that it looks like they are the "reasonable" people in a world full of "extremists of the left and right."

Last year the group announced its "Fix Congress" plan, which it claimed was intended to address Congressional gridlock. In its latest "grassroots" proposal, the insider organization addresses the Presidency. There are attractive ideas in each, but they tend to be trivial or unlikely to succeed. They're there to bury the sucker punches in a swirl of cotton candy.

The good ideas include filibuster reform and up or down votes on Presidential nominees within 90 days. And I like the idea of having the President meet with Congress for British-style televised Q & A sessions. That can occasionally lead to illuminating discussions - and it certainly gets raucous enough to be entertaining.

Less attractive proposals include "no pledges but the Oath of Office." That sounds good, but the "pledge" movement is a response to politicians' broken promises. Sure, Grover Norquist and some other right-wing pledgemeisters are nutty. But is a "No Pledge" rule better or worse than giving politicians the unrestrained ability to go back on your word?

The nice but non-nutritious cotton-candy proposals include things like regular meetings between the President and Congress and regularly scheduled Presidential press conferences.

Sucker Punches

Then there are those sucker punches, like the longtime Republican proposal for a Presidential "line item veto" which would upset the balance of power. There's also Presidential "fast-track" authority, which the New York Times describes as "a proposal to allow the president to send legislation to Congress twice a year that could not be amended but only approved or rejected. .. By preventing lawmakers from changing such legislation, a president could get yes-or-no answers on his top priorities."

How would this work? The Times interviewed former Clinton aide William Galson, who "suggested that one possible subject of fast-track authority could be the ... the Simpson-Bowles plan (which) included a cornucopia of unpopular tax increases and spending cuts." Adds the Times: "(U)nder this proposal Congress would have to accept or reject the whole plan."

See what they did right there?

Fast One

In fact, supporters of this ill-advised and unpopular austerity measure have already tried to "fast-track" it several times. Had the failed Simpson/Bowles Deficit Commission come up with a proposal, Congress had agreed to subject it to just such an up-or-down vote.

Simpson Bowles isn't a single policy prescription. It's a smorgasbord of radical ideas which include the aforementioned benefit cuts; lowering the top tax rate for America's millionaires and billionaires; deep cuts to other government programs; and the elimination of unnamed tax deductions that could slash employer health plans while raising the costs of paying a mortgage and raising children. And yet Congress and the President wanted to see it submitted for a single up-or-down vote, with no opportunity for amendments or changes.

A "fast track" vote creates enormous pressure on lawmakers to fall in line and denies the public the opportunity to hear an open debate about each provision of a bill. In other words, it's ideal for unjust, impractical, and unpopular 1% proposals like Simpson Bowles.

"Fast track," "triggers," "fiscal cliffs" - all sorts of jury-rigged political mechanisms have been created in order to foist this lobbyist-driven, rich-people-coddling, unrepresentative set of proposals on the American people. An up or down "fast track" on such a broad range of right-wing austerity ideas would make a travesty of the (small-"d") democratic process.

In fact, I'll support any politician who signs a pledge against it.

The "Center" Cannot Hold

In order to force such unpopular ideas into law, their backers must also create the illusion that these proposals are reasonable and "centrist." In fact, polling shows precisely the opposite.

Only six percent of those polled thought that deficit reduction and tax "reform," two key goals of the Simpson Bowles agenda, should be a top Washington priority after the last election. Seventy percent of those polled were either "somewhat uncomfortable" or "very uncomfortable" with the Simpson Bowles proposal when it was released. Americans across the political spectrum have overwhelmingly rejected cuts to Social Security in order to reduce the deficit, a key part of that plan, with opposition reaching as much as 76 percent among Tea Party members.

When a proposal is too right-wing for 94 percent of the population, including 76 percent of Tea Party members - and when it makes nearly three out of every four Aericans "somewhat" or "very" uncomfortable - one thing it is not is "centrist."

The Unpopular Front

No Labels is just one small cadre in a great army of mercenaries pushing the austerity cause. Their brigades have colorful (that is to say, silly) names like "Americans Elect," "I.O.U.S.A," the "Committee for a Responsible Federal Budget," and my personal favorite, "Budgetball" - which I like to think of as 'The Fountainhead' Meets 'Deathrace 2000'."

Even if every one of these groups fails individually - which so far they all have - the hope seems to be that they'll have the cumulative effect of making it look like there's a tidal wave of support for Simpson Bowles austerity.

These programs uniformly attempt to stigmatize the majority's opinions and interests as "extreme." These front groups always try to stigmatize the popular goals of protecting Social Security and Medicare benefits and fighting Simpson Bowles austerity as those of a "tiny minority" which "ruthlessly punishes those who step out of line."

I wish.

There's a word for a political system where politicians face dire consequences for defying the will and interests of the people. That word is "democracy."

Ghost of Christmas Future

No Labels and its wacky cohort of well-funded fringe groups will no doubt fail again to win the public's imagination. But the austerity crowd is still holding the upper hand. The President has a track record of pushing for Social Security cuts in a Grand Bargain. Nancy Pelosi has apparently climbed on board the Simpson Bowles train. These groups may lose in the court of public opinion and yet still win in the halls of government once the election is over.

"Ready to Fix Washington?" asks the No Labels website. Sure!

A good place to start would be by ridding it of the highly-paid insiders and influence peddlers who are trying to present No Labels and its unpopular ideas as the will of the people, rather than the whims of the wealthy.

___________________

[1] Several now-scrubbed websites state that Ms. Jacobson directed a PAC for the shopping-center industry between 1989 and 1991, engaging in the fundraising activities described above. We were unable to find an active website which confirms that, or any other which details her activities during those years. We have therefore characterized this part of her background as "reported" rather than "confirmed."

(This post has been updated a to provide more detailed description of polling data and links to primary sources.)

The Phony "Generational War": It's Like the Hunger Games, But With Old People

Richard Eskow — Mon, 02 Jul 2012 12:42:55 -0400

Millions of people have read the Hunger Games stories, about a depraved future society where young people are forcing to fight each other for scarce resources while elites in the Capital plunder the nation's wealth.

Now take a look at our world, where Washington's elites are laboring to pit the young against the old in in a similarly ritualized battle: Generational War. Like the Hunger Games, this spectacle only distracts us from the real economic injustices in our society.

In an economy where most people's lives have been harmed by bank recklessness and massive wealth inequality - that is to say, by the diversion of an ever-increasing lion's share of our national income to the richest of the rich - these instigators and those who follow them want everybody to worry about a different predator instead:

Grandma.

Introducing the Effie Awards

Every ritual battle needs someone to act as its cheerleader, promoter, propagandist, and recruiter. In the Hunger Games it's the relentlessly cheerful Effie Trinket, who recruits young people for brutal combat and near-certain death while chirping upbeat sayings like "Welcome to the Games!" and "May the odds ever be in your favor!"

Rather than pitting kids against each other like the Hunger Games, this false "Generational War" pits the young against the old. Call 'em the Younger Games, and there are plenty of Effies out there hunting for recruits.

Some Effies, especially those funded by billionaire Pete Peterson's anti-Social Security and Medicare campaign, are engaging in classic big-lie tactics: Repeat your falsehoods over and over and people will begin to believe them. Others may just be parroting the latest cocktail-party chatter.

We therefore announce the "Effies," a periodic review of generational-war literature in which we rate our contestants for the effectiveness of their "greedy geezer" propaganda. The weakest efforts get one "Effie," while as many as five of them can be awarded to those pieces of Gen-War Lit which prove worthy of any sci-fi dystopia.

Let's meet this week's contestants.

David Frum

Frum's attack on seniors starts with a truly cheap shot: They don't drive very well. Frum lingers on old people's driving for several paragraphs, long enough to have some readers thinking as they drive to work: That old jerk's going fifteen miles an hour in the left lane and I'm paying for his Medicare!

(Hey, when I was growing up in upstate New York we thought people from New Jersey drove badly. It was a major theme of the Friday night brawls between Jersey and New York teens at the Rainbow Bar and Grill in Suffern. But even the worst hooligans among us never considered starving the entire state.)

Driving is only a setup, however, for the main point embedded in Frum's title: "... we need to say no to the elderly." He writes:

Whether we can ever learn to say no to the elderly is the great political question hanging over all modern societies, in Europe as much as in the U.S., as we face a 21st century of diminished economic opportunity and staggering government debt.

Got it? Saying no to all people is the great political question hanging over all modern societies. Not a great political question, the great political question. And not some modern societies. All of them.

Truth time: We had more than enough money to pay for Social Security when the payroll tax cap (currently $106,000) ensured that 90 percent of our national income was being taxed. That's how it was designed by the Greenspan Commission in the 1980s. Since then the ultra-wealthy have captured so much more of our national income that this number has dropped substantially, leading to a relatively mild (25 percent) shortfall in a couple of decades. That's easily fixed by lifting the cap, along with one or two other adjustments (a financial transactions tax, gradual small increases in the payroll tax rate, etc.)

But these solutions, which polls show are politically popular, aren't being discussed much in Washington these days - or in the opinion pages, for that matter. That's because the truly great political question for all modern societies is saying no to the wealthy.

Frum, of course, doesn't tell you that.

Frum goes on to discuss the supposed "disdain" older Americans feel for the young, when there's no evidence to suggest anything of the kind. The real disdain comes from those like Frum who would sell young people on "generational war" as a way to cut benefits, because those cuts would harm young people far more than they would hurt anyone who is retired or approaching retirement today.

Rag on their bad driving to get you steamed up, then take away their benefits. Propagandists manqué, take note: That's how you turn the public against a whole class of people.

David Frum's score: Four Effies.

David Leonhardt

The award-winning Washington bureau chief for the New York Times begins with the jaw-dropping statement that "one dividing line (among Americans) has actually received too little attention ... the line between young and old." Too little attention? It's been the topic of endless commentary.

It doesn't get any better. Leonhardt meanders through a few paragraphs about the shifting opinions among generations before making the same statement we've seen so many times before: "If there is a theme unifying these economic and political trends, in fact, it is that the young are generally losing out to the old."

Unfortunately, Leonhardt never gets around to proving his case. He acknowledges that seniors who receive Social Security have paid for it throughout their working lives, and this intellectual honesty undercuts his thesis. And while it's true that Medicare costs more than its normal funding sources provide, Leonhardt makes a fatal omission: He doesn't explain why it costs more. For-profit healthcare has driven our medical costs, and our rate of cost increase, far above those of any other developed nation.

That means the solution isn't to restrict benefits. That would impoverish oldsters who can't afford care, or force them to go without needed medical treatment. The real solution is to restrain the profit motive that's making healthcare unaffordable for everyone in this country.

Leonhardt also says this: "Over all, more than 50 percent of federal benefits flow to the 13 percent of the population over 65. Some of these benefits come from Social Security, which many people pay for over the course of their working lives. But a large chunk comes through Medicare ..." (Leonhardt doesn't tell us what the percentage of Federal benefits is without Social Security.)

Medicare is insurance which pays for medical care, and it's designed for older people who need more medical care than younger people. To suggest that's unjust is like saying my auto insurance plan is unjust because all the payouts go to the privileged few who have had accidents.

Leonhardt tries manfully to push the generation-war theme, but it's as if his heart isn't in it. Maybe an editor assigned this piece, or he felt compelled to write it for another reason. But tit doesn't cohere, either logically or as generational-war lit. Maybe it was that intermittent, yet troublesome, intellectual honesty. We don't know. But it seems as if he wasn't feeling it, and we sure weren't.

David Leonhardt's score: Two Effies.

Ezekiel Emanuel, M.D.

Dr. Emanuel has come up with a Rube Goldberg-like policy contraption. Remember Rube Goldberg? His inventions executed a lot of complicated, rickety, and diverting processes - lifting little mechanical hands, compelling a toy monkey to clash his cymbals together - in order to do something trivial, like drop a ping-pong ball into a cup. They were creative, labor-intensive - and pointlessly made an easy task into something complicated.

Dr. Emanuel's latest construction is worse than pointless. It's destructive. His latest contribution to the Younger Games comes in the form of a New York Times editorial called "Share the Wealth," in which he notes that poverty for children is on the rise while poverty for elderly Americans has declined.

There are many things terribly, terribly wrong with this argument, not the least of which is the dishonesty with which Emanuel cherry-picks the facts to create the illusion that the elderly are getting rich at the expense of the young. But Emanuel's real Hunger Games flourish is in the unstated premise behind his use of these statistics: that the right way to address poverty isn't by eliminating it, but by distributing it more effectively among competing groups.

"Growing up in poverty is bad," Dr. Emanuel helpfully informs his readers.Then come statements like this: "The rising standard of living among older Americans is largely a result of the tens of thousands of dollars each collects from Social Security and Medicare." (Actually, the standard of living for most older Americans is most likely declining, not rising.) "... This huge transfer of wealth," Emanuel continues, "is harming our children."

Except, of course, that there is no "transfer of wealth" between young and old. Social Security is entirely self-funded, by law. And every proposal to "save" the program from future actuarial imbalances involves taking much more from today's children than they would lose even if the program weren't changed at all.

Like his fellow Effie winners, Dr. Emanuel never discusses the real transfer of wealth that's endangering our fiscal security and leading to that long-term shortfall - the transfer of national income to the wealthiest among us. High unemployment is another contributor to the program's long-term shortfall, but Effies aren't permitted to mention that either.

Medicare will be in serious financial trouble in coming decades, but the problem isn't that older Americans are demanding too much medical care. The problem is runaway greed in our healthcare economy - greed which encompasses for-profit hospitals, physician practice management companies, pharmaceutical manufacturers, and diagnostic imaging providers, to name but a few.

Emanuel proposes creating a "Children's Opportunity Bequest and Fund," where "old Americans could agree to forego Social Security and Medicare for one to three years." The money could be directed to "their very own grandchildren" or "any specific child identified by their Social Security number." He never mentions the many ways grandparents can already give cash and gifts to their grandchildren, so we'll help him out: They have names like "trust fund," "savings account, "Hanukah gelt, "Communion gift ...."

Why should government resources be used to create yet another vehicle for this purpose?

Ezekiel then meanders into some convoluted "we could also" ideas, including a "Children's Opportunity Fund" that a "would support the early childhood education of a randomly chosen newborn from a family below the poverty line."

Hunger Games fans will immediately see the parallels between this proposal and the system which allowed young people to collect credit points by increasing their likelihood of being chosen as a sacrifice. Why does Ezekiel propose such a redundant and foolhardy contraption? Either he's not thinking very clearly or he's deliberately befuddling the public. (We do know he's a serial misleader on the subject of retirement benefits - see Dean Baker for an example).

Phony arguments? A government system which encourages oldsters to sacrifice themselves for youngsters - and even uses their Social Security numbers? All presumably accompanied by propaganda campaigns encouraging seniors to give up their benefits and stigmatizing those who don't? Congratulations, Doc! That's real Hunger Games material.

Ezekiel Emanuel's score: A winning Five Effies.

What are we to conclude from this relentless wave of false generation-war propaganda? If you're not a senior yet, it means you still have the chance to become the star of somebody's dystopian science-fiction novel. In the meantime, here's a final word to you from all of our contestants:

May the odds ever be in your favor!

Bill Clinton, Boehner, and Some Other Rich White Guys Had a "Summit" and Agreed: It's Your Fault

Richard Eskow — Tue, 15 May 2012 23:53:08 -0400

Today a bunch of rich white guys held a "Fiscal Summit" and agreed that:

1. Despite the fact that unemployment is causing untold suffering for millions of people, it's not very important.
2. Despite the fact that wage stagnation is destroying the middle class, that's not important either.
3. Despite the fact that we need the social safety net more than ever after what they've done to the economy, it's expendable.
4. Despite the fact that our government can borrow money at record low rates and use it to put people to work, thereby ending the recession and jumpstarting the economy, that option's not even worth discussing.
5. Despite the fact that these men all possess great power, wealth, and/or influence, everything that's wrong with the economy is your fault.
6. Since it's all your fault, you better get ready to pay up.

Oh, and one other thing:

7. They're all very smart and very brave. It's too bad the rest of you people are such jerks.

Any questions? Let's hope not, because they're all busy men and it's great golfing weather this week in DC.

(Sure it's hot, but the weather calls for refreshing bouts of rain.Those are the perfect moments for cooling off under a rain-soaked cabana or golf cart umbrella. Precious moments, meant for breathing in the smell of wet grass as waiters marinated in Maryland raindrops refresh your gin and tonic. Mr. President? Mr. Speaker? Last one to the clubhouse is a rotten egg!)

The Summiteers convened in a nation wracked by unemployment and filled with crumbling schools and bridges. There they concluded that our most urgent problem is ... government deficits. That's like preaching about water conservation when your house in on fire.

Stuff White People Like

The best that can be said about this billionaire-funded display of arrogance, ignorance, and self-satisfied moral decay is this: If bullish*t were nickels they could have ended the deficit today.

Then there's the self-congratulation. It doesn't matter what nonsense they spout: They think their long years in insulated, oak-lined boardrooms means they know more than you do. It wouldn't have surprised me if one of them had suddenly burst into Rutger Hauer's soliloquy as a dying android in Blade Runner:

I've seen things you people wouldn't believe. Attack ships on fire off the shoulder of Orion. C-beams glittering in the dark near the Tannhäuser Gate. All those moments will be lost in time, like tears in rain.

And yes, all of these guys are rich. Some have more money than others, but nowadays anybody with a guaranteed income and a lavish source of retirement income is. Fat pensions? They all have 'em - at your expense.Until then they can bank on some sort of cushy job or income stream from the Pete Petersons of this world if things turn sour for them politically.

The behavior of Reps. John Boehner and Paul Ryan was, if nothing else, predictable. Sure, it's always shocking to observe the callous indifference of rich people toward those in financial need. But their callousness is baked into their politics.

I Got Mine 2012

The low point of the day was the spectacle of former President Clinton mouthing false platitudes designed to gut everything his party once represented. The bogus arguments put forward by Clinton and the session's other willfully uninformed participants have been decisively refuted time and time again since they were first raised - in 1935!

And they were decisively put to rest by a bipartisan committee (doesn't the sacred word "bipartisan" help?) assembled by a Republican President - in 1958.

Think of it: The Bowles/Simpson plan touted by Clinton would gut student loans and other educational programs that might someday help some other young kid from Hope, Arkansas follow in his footsteps. You'd think that would mean something. But then, like today's other major participants, Bill Clinton's already got his.

Maybe that should have been the event's name: "I Got Mine 2012."

Can't Stop Won't Stop

The welfare "reform" which Clinton supported has swelled the ranks of the poor and separated mothers from their children while doing nothing in the long run to end poverty. That added special piquancy to the sight of the self-satisfied post-President silkily arguing that we should take the same "reform" hatchet to Social Security and Medicare.

If Bill Clinton had any moral perspective he'd be holding Jimmy Carter's hammer at a Habitat For Humanity building site somewhere, not pushing programs that would doom the middle class.

But he won't stop, of course - not as long as billionaire Pete Peterson is able to entice Clinton and other "Summit" participants will all the flattery and free publicity money can buy. Peterson's also able to spoon-fed them those predigested economic lies which serve his agenda as Nixon's former Commerce Secretary: the downsizing or dismantling of any government programs that don't directly enrich corporations.

The Simpson/Bowles agenda which Clinton embraced today is the perfect example: It actually lowers the top tax rate for the nation's highest earners, while promising to raise taxes a little elsewhere (mostly by eliminating deductions that help the struggling middle class, like the mortgage interest deduction, and removing the employer health insurance deduction that provides millions of working Americans with at least a modicum of health coverage.)

Simpson and Bowles are two rich white guys, too: A retired Republican Senator and a Democratic insider turned hedge fund speculator. Under their plan the middle class would melt away like - how did the android put it? - "like tears in rain."

J'Accuse!

Former President Clinton wasn't the only wealthy and powerful white man to take the stage today. Treasury Secretary Tim Geithner, House Budget Committee Chair Paul Ryan, and Speaker of the House John Boehner joined Commerce Secretary-turned-hedge-fund billionaire Peterson. While they might have differed slightly on the details, they spoke with one voice about how our problems came about in the first place: It's your fault.

Yeah, you. Don't look to the right or left. You. As a non-rich and non-powerful American, you're to blame for all our woes. Too many of you chose to be born as baby boomers, says Clinton. Your grandparents are "greedy geezers," says the perennially unpleasant Alan Simpson. You took that bank loan, just because the bank told you a house was your best investment. (So did Bill Clinton and George W. Bush.)

As billionaires, Presidents, Cabinet secretaries, and leaders of Congress, what chance did they have against seniors, working people, and the disabled? It was never a fair fight.

So when they cut your Social Security check and dismantle Medicare, remember: It's your fault. Now it's time to pay the piper.

Money Talks

That's the kind of nonsense you can buy with a billionaire's money. Tax filings show that Pete Peterson put nearly half a billion dollars into the foundation that held this summit - and that's just in four years. He's been trying to gut Social Security, Medicare, and other vital government programs for at least twenty-five years. Paul Blumenthal and Ryan Grim outlined some of the initiatives Peterson has founded or funded over the decades: the "America Speaks" town halls, the Fiscal Times, the "Indebted" series on MTV, the Social Security specialist at the Urban Institute, the "Committee for a Responsible Federal Budget," a politically biased high school curriculum ... the list goes on and on.

But Blumenthal and Grim missed a few organizations Peterson secretly formed. They overlooked the Daughters of the American Revolution, SDS (he wrote the Port Huron Statement - but not the compromised second draft), the Quarrymen, the Royal Order of Buffalo, and the Shriners. (Hats and tiny cars? Brilliant! It's even better than Budgetball.)

Okay, maybe not the last few. The point is, a whole lot of politicians and policy wonks have benefited from Peterson's billions, which have been spread around a variety of organizations in order to create the illusion of consensus - consensus which slowly became real in Washington, and which is diametrically opposed to the public's preferences.

The Rich Get the Elevator. The Middle Class Gets the Shaft.

"Simpson-Bowles makes the Social Security system more progressive," said Bill Clinton. Actually, it would gut Social Security benefits while lowering the top tax rate for billionaires like Peterson and millionaires like Clinton. That's the opposite of "progressive." But it would give the illusion of 'progressivity' by offering a slight benefit bump to the extremely poor, funded by benefit cuts for the middle class.

It would also give a tiny bump to seniors who live an especially long time after retirement. That would also be funded by middle-class benefit cuts. And since minority and low-income life expectancy is still far below that of white people in general - and white women in particular - this would also be economically regressive.

(Given its demographic impact, perhaps these wealthy white men created this policy as an early Valentine's Day gift for their wives.)

The fact that this false 'progressively' would transform a social insurance program into a welfare program seemed to disturb the former President not one bit. And he seemed entirely unaware of the what it means to the political discourse when a former Democratic President argues for a plan that would cut taxes even more for the wealthiest Americans, while cutting the few hundred dollars per month received by many elderly and disabled Americans in order to provide benefits for the poor. Bill Clinton calls that "progressive."

And that was the leftmost wing of the Fiscal Summit's leadership.

Post-Partisan

Needless to say, the conservative movement got a lot of bang for Peterson's buck today. "There are Democrats and Republicans who largely agree with each other on how best to tackle these challenges," said Paul Ryan. "Unfortunately, it's not the current president and it's not the Senate leadership that we're dealing with right now."

The radical right-winger then added: ""I personally believe if we can remove these partisan roadblocks, that we can get to a moment where we're going to have a solution once and for all for this problem and hopefully in time to prevent an austerity-like debt crisis."

The "partisan roadblocks" to which Ryan refers are the words and deeds of those few politicians who try to do the public's will in Washington. Thanks to events like these, the vox populi is seldom heard anymore around these parts. It's like a barely noticeable scent clinging wisp-like to the flowering trees along the capital's boulevards.

At a Peterson event, the word "partisan" is used to describe any position which is both politically popular and economically sound.

Crying Time Again

An "austerity-like crisis" is precisely what we'll have if the programs promoted at this event are implemented.I ts agenda closely resembles the one that's currently decimating Europe. Thank God Tim Geithner was there to speak for our newly-populist President and his Administration. What did Geithner say to refute all this radical right-wing talk? How did he fight for investment in our individual and collective futures? What did he say to champion the cause of rebuilding our crumbling nation - and our crumbling dreams?

The final compromise will look a lot like Simpson/Bowles, said the Treasury Secretary.

And was our fiercely independent media there, unwilling to be bought at any price and tireless in its quest for the truth? Yes. NBC's Tom Brokaw fearlessly spoke truth to power, summoning the vision and ferocity of the Biblical prophets as he chastised ... the American Association of Retired Persons. Brokaw said its ads defending Social Security were "in (politician's) faces."

That's our media for you. It's ever fearless in its defense of the powerful against the powerless. (Brokaw to old folks: Hey, "Greatest Generation," put a cork in it!)

Pete Peterson's campaign needs to be exposed. Bill Clinton needs to step away from the public sphere. Propaganda disguised as 'journalism' needs to be discredited. Washington's fraudulent claim to bipartisanship needs to be retired once and for all. Unless and until these thing happen, our dreams as a nation and our financial futures as individuals will continue to melt away like ... well, like tears in rain.

Show Peter Peterson We Reject His Elite Austerity Consensus

Roger Hickey — Sun, 13 May 2012 23:25:20 -0400

On Tuesday, May 15, one of America's wealthiest men, Peter G. Peterson, will use his foundation's money to lecture the rest of us about why the federal deficit is the most serious problem facing our country.

Since poll after poll demonstrates that strong majorities of Americans care far more about high unemployment and slow growth, Peterson's major strategy is to put on a show aimed at demonstrating that all the "serious people" – the elite of both political parties – have already agreed that the deficit is such a threat to America that we must slash public spending and "reform" entitlements. (That's a fancy way of saying cut benefits, raise the retirement age for Gen Xers and Millenials, and dismantle Medicare for these future seniors, as Cong. Paul Ryan and just about all Republicans have proposed.)

I'll be outside Peterson's Fiscal Summit, with Senator Bernie Sanders, and lots of friends who don't agree with Peterson's elite consensus – including leaders of the Campaign for America's Future, Health Care for America Now, CREDO, Social Security Works, the National Gay and Lesbian Task Force, National Committee to Protect Social Security and Medicare, and NOW - and lots of other folks concerned about our country. If you don't believe Peterson speaks for the American majority, come on out. We start at 1 p.m.

To repeat, Pete Peterson knows most Americans want action to create jobs, not spending cuts, so in search of an inside-the-Beltway consensus, he tries to find a few important Democrats who will come and pretend that the kind of budget austerity that has wreaked European economies – and is being rejected by voters around the world – should still be the priority for the U.S. economy.

Unfortunately, one of the key Democrats Peterson has lined up is Obama Treasury Secretary Tim Geithner – and there is no telling what Geithner is likely to say. What every Obama Administration spokesperson should be saying is, "We need to invest more in jobs creation – and aid to states to prevent layoffs of teachers and cops and firefighters. And if we can get more Americans back to work, the deficit will come down because we'll all be paying taxes."

But Geithner might just easily say something that undercuts that clear, winning Democratic message. He could do what many budget hawks have been urging and call a post-election "grand bargain" that would prioritize deficit reduction by embracing the proposals of former Sen. Alan Simpson and investment banker Erskine Bowles, whose ideas were rejected by the members of the commission that bore their names.

Simpson and Bowles proposed raising the retirement age for young people now in the workforce - and weakening the cost-of-living index for everyone. That means a big Social Security and Medicare benefit cut for people who will have few other retirement and health security plans for their senior years. If Tim Geithner embraces these kinds of big cuts to these crucial programs, the political impact will be to undermine Democratic chances to take back the House and keep the Senate in 2012.

Rep. Chris Van Hollen, who is also speaking at the Summit, should certainly care about Democrats like Geithner rejecting this kind of "bipartisan" consensus as a guide to what they should do in the lame duck session after the election. If he wants to be helping Nancy Pelosi to lead a strong Democratic majority after the election, he should be urging his fellow House candidates to reject this kind of deal – and to campaign like the successful Democratic special election candidate in New York, Kathy Hochul, who won by promising, "We will not cut Social Security and Medicare in order to pay for tax cuts for millionaires."

Speaking of tax cuts for millionaires and corporations, Simpson and Bowles are praised by Peterson and others for daring to increase taxes to reduce deficits, breaking with the quasi-religious conservative oppositions to raising any taxes at all. Actually, they propose the same counterintuitive approach as the Ryan budget plan: lowering tax rates, particularly those on the top. What my CAF partner, Robert Borosage, said at the time applies equally to the Ryan plan: "They promise the lower rates will be accompanied by cleansing the tax code of various tax deductions and expenditures that mostly benefit the rich ... Only we've played this game before. In the 1980s, bipartisan reforms lowered tax rates across the board, particularly those on the top, and cleansed a tax code riddled with corporate and fat cat deductions. And then Lucy pulled the football. They eliminated the deductions but not the corporate lobbyists." The rates stayed low but the deductions came back.

Democrats should join the voters and call for raising taxes on the rich and the big corporations - not cutting them in the name of deficit reduction.

I've been to Peter Peterson's fiscal summits in the past – and I can imagine what the reaction of his public relations team will be to our gathering outside:

1) They will allege that we oppose all deficit reduction plans – especially those that tackle the "entitlements crisis." Our answer is clear: We do oppose cutting Social Security benefits because that system is not in crisis and can be solved by raising the cap on the Social Security taxes rich people pay. We do oppose cutting Medicare and Medicaid, because a civilized society should cover the costs of health care for seniors and the poor. However, our approach to deficit reduction involves a.) steps to spur growth and jobs; b.) real tax increases for the rich and the corporations; and c.) support for stronger health care reform aimed at getting the America's overall health care costs in line with other advanced countries. If we did that, our long term deficit problem would disappear. And I will bet that nobody speaking at Peterson's "Summit" will argue that crucial and clear approach to deficit reduction – because it means tax justice and taking on the drug and health care monopolies.

2) They will patronize us, pretending that Pete Peterson himself agrees there are times when job growth and economic stimulus must come before deficit reduction. But this is meaningless lip service. How many of Peterson's hand-picked Summit speakers will call for vigorous political action to pass a new round of stimulus and job creation measures? No, the real purpose of this Summit is to convince the media that – after a long period of slow growth, growing inequality, and polarized politics – leaders of both parties will come together after the election around a plan that kills the economic recovery through drastic spending cuts and undermines the Social Security, Medicare and Medicaid programs that actually help most Americans survive in bad times. This meeting will not issue a rallying cry for bold growth policies to put America to work. And we should try to make sure that Democrats do not buy into what the organizers are selling – because the voters certainly won't.

One more thing Peterson has been selling: House Budget Committee Chairman Paul Ryan. Even many deficit hawks have attacked Ryan's budget plan – supported by almost all Congressional Republicans – because its tax cuts and unspecified and unlikely loophole closings would make the deficit much worse. Democrats claim they will run against the Ryan budget as the epitome of everything wrong with the Republican party, as it is. Yet at the last Peterson Summit, a year ago, former president Bill Clinton came to the defense of Paul Ryan and his plans for Medicare.

At this Summit, Rep. Chris Van Hollen, a progressive Democratic leader (and ranking Member of the Budget Committee), is scheduled to engage in a "dialog" with Ryan. Van Hollen has so far done a good job at exposing the way the Republican budget slashes spending for the poor and middle class. Those of us outside the Summit will be hoping he stands up to Ryan by opposing job-killing austerity – and cuts to Social Security, Medicare and Medicaid. We'll see.

Note: It is wonderfully fitting that the Peterson Fiscal Summit will take place at the Andrew Mellon Auditorium, named after one of the wealthiest Americans of the 1920s and '30s, who, as Secretary of the Treasury, advised President Hoover to "liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system." He advocated spending cuts to keep the federal budget balanced, and opposed fiscal stimulus measures. The result was the downward spiral known as the Great Depression.

Will Democrats Embrace "Austerity American Style"? Crash This Party and Find Out

Richard Eskow — Fri, 11 May 2012 07:31:21 -0400

Heard about the meeting that's being held to decide your economic future? If the answer's "no," don't feel bad: That's because you weren't invited. But Tim Geithner was. So was Rep. Paul Ryan, the Republican member of Congress whose radical right-wing plans for cutting Medicare have made him the subject of a Mitt Romney "bromance." So was Bill Clinton, who showed up last year and uttered the usual Beltway insider's falsehoods about what's really wrong with Social Security.

Hey, maybe your invitation to billionaire Pete Peterson's "Fiscal Summit" got lost in the mail. Or maybe they really, really didn't want you there. Who cares? That's no reason not to go anyway.

Hey, Sen. Bernie Sanders wasn't invited, and his proposal for Social Security was much more popular with the American people than anything that's likely to be discussed at this little get-together.

It's Your Party

That's right: There's a "summit," and nobody invited the American people. They didn't even invite the guy who proposed the fiscal plan that most Americans – including most Republicans – wanted, according to the polling data. But he's going anyway.

May 15, 2012 at 1 p.m.
In Front Of the Peter G. Peterson Foundation Fiscal Summit
1301 Constitution Avenue NW
Washington, D.C.

That's Bernie for ya.

In fact, there will be a rally outside and Bernie will be speaking there. The rally's on Monday, May 15, at 1 p.m. outside 1301 Constitution Avenue NW. Call it the "people's summit," the "sidewalk summit," or – in honor of MCA – a "fight for your right to crash their party." Whatever you call it, it's on. Some of my CAF colleagues will be there, along with some other good folks.

I'd go myself, but I burned through my travel hours this month by coming to Charlotte for the Bank of America shareholder's meeting and Occupy protests. That was another party where the public wasn't very welcome. (I'm on the plane back home right now, as a matter of fact. Inflight wireless: it's both a blessing and a curse.)

Party Favors

Peterson, who served in President Nixon's cabinet, has funded a lot of events and "educational" materials to promote the misguided and destructive ideas about government spending that dominate the discourse inside the Beltway. They're the same austerity ideas that have broken Europe's economy – and are now breaking down its social and political order.

These ideas that were most recently packaged as the "Simpson/Bowles" plan, which was put forward by those two individuals when they failed to lead their Presidential Deficit Commission to a successful conclusion. (These personal opinions are often misrepresented in the press as the "Deficit Commission proposal"; actually the Commission failed to agree on a proposal.)

The Simpson/Bowles plan will be the main course on this party's menu. It is a far-right proposal that leaves Bush tax cuts in place for the super-wealthy. It would even lower their overall tax rate, while providing cover for this radical wealth shift with the elimination of tax breaks that the middle class depends on. (They don't say which ones, but employer health insurance, child tax credits, and the home mortgage interest deductions are the main targets.)

The Simpson/Bowles plan would trigger across-the-board cuts to government spending, including programs that serve middle-class and lower income people. Corporate tax rates would be cut, too, while the middle class would be forced to contend with gasoline taxes and cuts to both Social Security and Medicare.

Its mix of spending cuts to tax increases confirms the fact that it's a far-right plan. Three quarters of Simpson/Bowles' deficit reductions would come from spending cuts, while only one quarter would come from tax hikes. (And those would be directed at everybody but the rich.)

Simpson/Bowles: It's Austerity, American-Style.

The Guest List

No wonder the public hasn't given the chance to have its say at Peterson's Summit. The public hated the Simpson/Bowles plan when it was announced, with 70 percent of those polled saying they were either "somewhat" or "very uncomfortable" with it. And if they're uncomfortable now, imagine how they'd feel after they retired.

But the political and economic lemmings who are pushing these ideas want us to jump off the cliff with them anyway.

Alan Simpson, the Republican co-author of Simpson/Bowles, is an intemperate motormouth whose rude and vulgar comments toward women and his fellow senior citizens earned him the justified disapproval of most Americans … except billionaire Peterson, who invited him to attend this year's summit again, and the undemocratically "bipartisan" Democratic pals who will join him once on the Peterson dais next Monday.

As far as I can tell, the only attendee at next Monday's Summit who isn't a return invitee from the "Austerity American Style" crowd is Chris Van Hollen, a Democratic House member who's closely allied with Minority Leader Nancy Pelosi. His remarks should be interesting, especially after Pelosi's shocking statement that she would have voted for Simpson/Bowles if it had come to the House floor – a comment she later affirmed.

Get Your Party On

Van Hollen has an opportunity to walk back those disastrous remarks on behalf of the House Democratic leadership. if he doesn't, the Dems are setting themselves up for another drubbing like the one they got in 2010. That's the year the WHite House's Simpson/Bowles-style "Grand Bargain" trial balloons gave the Republicans a chance to run against Dems on these popular programs … from the Left.

The GOP called its leftist-style rhetorical assault on Democrats the "Senior Citizens' Bill of RIghts." It was baloney, of course, but the Democrats gave them the cutting board and the knife that let them cut it up and serve it. Something like that could happen again this year.

When it comes to Democrats these days, you've got to fight for their party against its right.

That's one more reason to show up on Monday: To let Chris Van Hollen and other Democrats know they have only one choice. They can fight against cuts to Social Security and Medicare, or they can lose support – and seats – in November.

If you don't want that to happen (and who does?) – and if you want to protect Medicare, Social Security, and other vital government programs – why not show up and let them know how you feel? You'll be the life of the party crashers' party.

This post was updated to revise the time of the protest.

When Liberals Attack ... Social Security: Drum v. Lieberman

Richard Eskow — Wed, 02 May 2012 11:45:39 -0400

"Hmm," writes a blogger. "Liberals need to get off their fainting couches." It's in an argument for cutting Social Security benefits - and it comes from a liberal.

Benefit cuts would hurt millions of disabled and elderly people, harm our economy, and wound our social character.

Cear-eyed historians of the future wouldn't just point their fingers at radical right-wingers. They'd also cite collaborators in the Democratic Party and other members of what is still called (with no apparent sense of irony) "the Left."

Today's case study is called "Lieberman vs. Drum."

Cast of Characters

Kevin Drum does a lot of good writing at Mother Jones, and Trudy Lieberman of the Columbia Journalism Review can defend herself. But Drum's attack on Lieberman illustrates an urgent problem: All the signs suggest that Democrats may be preparing for a politically and economically destructive pact to cut Social Security. They must be stopped, not encouraged. That takes clarity, not confusion.

We've grown accustomed to seeing critics of this false consensus attacked unjustly, often by Democratic icons like Bill Clinton. But it's still surprising to see such an attack in the pages of Mother Jones, the progressive magazine that evolved from the legendary 60's-era publication Ramparts.

Lieberman has long been a sharp-eyed chronicler of the media's Social Security errors, which often turn news stories into propaganda for the pseudo-"centrist" push to cut this already ungenerous program.

Ms. Lieberman's CJR piece,"How the Media Has Shaped the Social Security Debate", seemed to visibly affect coverage of last week's Social Security Trustees Report. Coverage was better, but still weak, as Ms. Lieberman noted in a newer piece. That's what occasioned the attack from Mr. Drum.

Democratic Dreamland

I've seen several of Drum's columns on Social Security and they seem to share some political misconceptions. He appears to be under the impression that it's possible to cut a reasonable deal with House Republicans that would "fix" Social Security. He also seems convinced that Republicans would then honorably abstain from any further attacks, leaving the program safe for a generation. Experience suggests otherwise, to say the least.

These are the same misguided assumptions guiding insider Democrats from Barack Obama down. (Sen. Harry Reid has been a stalwart exception.) Their wobbly comments about Social Security helped Republicans run to Democrats' left in 2010, contributing heavily to the Democrats' loss of the House that year. More and more Democrats are talking that way again this year.

Here we go again.

Proving the Point

Drum stumbles right out of the gate. His first sentence reads "Last week the annual report of the Social Security trustees was released, and the news was bad." But the report doesn't contain "news" at all. It holds projections which are based on assumptions. That's not a nitpicker's difference. The projections changed because they expect the economy to be worse, erall, not because there was a real shift in the Social Security Administration's finances.

To say "the news was bad" is to amplify the sense of hysteria being purveyed by the media. It unwittingly proves Lieberman's point.

Although Drum nods to reality in his next sentence, the error's been made. He then quotes from Lieberman's piece - but selectively, citing only her paragraphs about what she calls "doomsday headlines."

(She left out the most misleading set of headlines, in our opinion; they were the ones that said an "aging workforce" was making things worse, as if a wave of births that ended in the early 1960s was somehow a surprising development.)

Media Misfires

"Hmmm," Drum then writes. "The Daily News says the trust fund will run dry in 2033 ... I fail to see anything wrong with any of these explanations." What he doesn't say is that apparently Lieberman didn't see anything wrong, either - with those particular paragraphs. That's presumably why her subheader read, "An F for the headlines; a C- for the stories." That's a fairly balanced assessment, but Drum's readers at Mother Jones had no way of knowing that unless they clicked on the link.

"Social Security funds worsen," says the Daily News headline. The piece itself is fairly reasonable, if narrow in focus. So bad headline, okay content: That's consistent with Lieberman's reporting.

In addition to criticizing the "worsening" headlines and palpitation-inducing sentences like "there won't be much money left for you," Lieberman has another point: Journalists mislead their readers when they say that "Social Security (is) heading for insolvency even faster," as one newspaper headline put it.

Broke

These errant journalists a don't explain - perhaps because they don't realize - that 'insolvency' isn't being used in the way many people understand the word. In everyday speech it means "broke," "busted, "can't pay the bills." But the Trustees use the word in a technical sense meaning the absence of a surplus.

Lieberman's point is that journalists should explain the difference, and most of them didn't. Drum made the very same point himself just last week - but then, he wasn't on this particular high horse last week.

He was already sidling up to it, though. As he now says, that's when he "told liberals to get off their fainting couches" over Social Security coverage. (This rhetorical gambit - mocking someone who has a critique to delver with language like "fainting couches," "hysterical," "pearl-clutching, "panties in a bunch," etc. - is a cliched blogger move that's beneath the usually-thoughtful Drum.)

Simple

Drum says that fixing Social Security "isn't a hard problem." His "simple" solution, coincidentally or not, resembles the "Grand Bargain" that's still being pushed by President Obama, Erskine Bowles, Dick Durbin, and a number of other leading Democrats: "very modest and phased-in cut in benefits combined with a very modest and phased-in increase in taxes."

Drum says that "you could pretty easily put together a Democratic coalition" - that's exactly what worries me - "that would support a combination of small, phased-in benefit cuts and small, phased-in tax increases" - he presumably means payroll tax increases, which would only affect wages under the payroll tax cap - "that would fix Social Security forever."

Forever? There's that wishful thinking again!

(Or maybe I'm wrong, and a deal like that would make Grover Norquist and Pete Peterson and the Tea Party go away forever. Wanna put some money on it?)

Big-Picture Fixes

There's a much simpler solution, endorsed by Ronald Reagan's Chief Actuary and other subject matter experts. Lift the payroll tax cap. That's it: Problem solved. No "phased-in" this or "graduated" that. Better still, no added hardship for lower-income and middle class Americans.

Even better, we could increase the program's benefits, which are among the weakest among developed nations, with added income taxes on the wealthy and/or a financial transactions tax.

But instead of these simple, fair, and balanced solutions, the ones preferred by Drum and by "centrist" Democrats operate within a narrow band of policy possibility, one that assumes this is a middle-class problem that must be solved through taxes of benefits cuts directed at the middle class. It reflects a failure to grasp of this issue's historical, economic, and social context.

As economist L. Josh Bivens and others have observed, the current projected shortfall was created when the wealthiest Americans began capturing far more of the nation's income than they had before. That's a Galtian wealth-grab even Alan Greenspan didn't see coming. And today's currently miserable economy was caused by excessive transactional speculation and by other financial misdeeds on Wall Street.

Abandoning Their Posts

Kevin, along with a number of Democrats, may object to having his position characterized as an "attack" on Social Security. I understand - but it's nevertheless accurate. When you provide rhetorical ammunition for "modest" benefit cuts - which in DC parlance aren't modest at all - while mocking the people who see the big picture, it adds up to an attack.

The problem isn't just that the real story on Social Security's finances isn't being told. It's that it's not being told by a lot of Democrats. And that lot of otherwise liberal commentators are reinforcing the confusion. By contrast, Lieberman gets it right. As she says, "Moral of the story: We need to get our economy out of a ditch, and the sooner the better. But you already knew that."

That's the kind of direct, concise, in-plain-English explanation of an economic topic that people could once count on getting from Democrats and liberal commentators.

Hmmm.

____________

(We interviewed Ms. Lieberman on this weekend's episode of The Breakdown and discussed the fallout from her first CJR piece. We're pretty sure this was the first time Ms. Lieberman, an experienced health and finance journalist who now co-edits the CJR, was asked if she ever saw the obscure 1960s-era horror film Carnival of Souls.)

Insanity Isn't Deficit Spending: It's Claiming That the Gov is a Household

Joseph M. Firestone — Wed, 25 Apr 2012 01:41:49 -0400

It's a trope with our politicians, including the President, his likely Republican opponent Mitt Romney, and an emerging third party candidate over at Americans Elect and NoLabels, Pete Peterson's long-time Sancho Panza, David Walker. The trope says that the Government is just a family, even though it's a very big one, and that, like any family, it has a “household” budget, called the Government budget.

There's nothing to this, of course, The Government is not like a big household or even the largest corporation. It is not the user of our national currency. It is the creator of it. All of our dollars come from the authority of the Government to spend, and, in the act of spending to create dollars.

If the Government has debt, it can always pay that debt simply by marking up the accounts of its creditors. Also, unlike your household or mine, it doesn't matter how much is on the Government's credit card, it can always repay its debts whenever they come due, unless Congress does something stupid to stop it from doing so.

In fact, its own constraints aside for a moment, the Government has precisely the same ability to repay its debts, however high those debts are, and however high its debt-to-GDP ratio is, so long as those debts are owed in the currency (USD) it has the authority to create. It doesn't matter whether the Government owes $14.3 Trillion, or $30 Trillion, or only $50,000. Its ability to pay, self-constraints aside, is exactly the same. It doesn't matter if its debt-to-GDP ratio is 0% or 10% or 100% or 300%, it's ability to meet its debt obligations is exactly the same, if it only decides to shed its self-constraints.

Now, the Mitt Romney campaign, is taking its turn at offering us the “Government is just a big household, so we can't take on any more credit card debt, because if we do then one day we'll run out of money and our grandchildren will have to pay the price” trope. But Romney's campaign has gone beyond words into an “infographic” to try to reinforce this myth of the austerians.

Even though they differ on details Romney, President Obama, David Walker, Pete Peterson, Erskine Bowles, Alan Simpson, other deficit hawks, as well as the deficit doves, would l all say they agree with the general picture presented by the infographic without, perhaps, agreeing on the specifics of the last two lines. But, again, this infographic, is as much a fairy tale as the corresponding verbal trope. So it needs an answer; one based on Modern Monetary Theory (MMT), and the realities of sovereign fiat currency systems. Here it is.

Figure 1: The Real Insanity Is Austerity. Stop It!

The bottom line is that there isn't a valid analogy between the Government and a family household, and that the insanity is to cut back on deficit spending when we still have 25-30 million wanting full-time work who can't find it.

Specifically, the Government pays with dollars it can legally issue in unlimited amounts at any time! Also, the Government can't become insolvent except as a result of Congressional, and unconstitutional, stupidity.

So, let's start telling the truth about the Government budget and its unlimited capacity to spend, and let's get full employment and Medicare for All, invest in the economy, cut regressive taxes, and solve the rest of our accumulating problems.

(Cross-posted from Correntewire.com)

The Real War On Youth - and Esquire's Dubious Achievements

Richard Eskow — Mon, 09 Apr 2012 19:18:37 -0400

In 2010 the men's magazine Esquire enlisted Lawrence O'Donnell, along with a panel of Republicans and economically centrist Democrats, to duplicate the anti-Social Security efforts of the Simpson/Bowles Deficit Commission. Now the magazine is at it again, with an economically illiterate and deceptive piece about "generational conflict" called "The War on Youth." Meanwhile the real war on youth is an assault on their employment prospects, education costs, and, yes, their future Social Security benefits. On two of those three fronts, Esquire is distracting its presumably youthful male readers from the real threats to their economic security. And on the third front, it's fighting for the wrong army.

Women, Clothes, Music, Drinks... Austerity

The Esquire website advertises itself as follows: "Beautiful Women, Men's Fashion, Best Music, Drink Recipes." Once you read about the mag's most recent move, you may want to skip the other options and just make yourself that drink.

I can see why the deep-pocket resources hellbent on cutting Social Security (think right-wing billionaire Pete Peterson, former cabinet secretary under Nixon) might want to trade on Esquire and its fading hipster cred. Sure, its "Women We Love" and "Sexiest Woman of the Year" features may speak more to a bygone Mad Men era (or invite a Mad Magazine sendup), but Esquire has focused on top-quality writing for generations by publishing writers like Ernest Hemingway, Terry Southern, Andrew Vachss, Gay Talese, and Gary Wills.

But the magazine that once challenged authority (for example, by publishing the first accounts of American atrocities in Vietnam) now seems more like a conduit for its economic interests, at least where government spending is concerned.

Three Days of the Stupor

The magazine bragged that its "O'Donnell Commission" balanced the federal budget in only three days -- and it is impressive that they managed to gather and repeat so many stuporific centrist clichés and "bipartisan" non-solutions in so short a period of time.

Why bring it up again now? Because there's a pattern here. It began with Esquire's initial assignment for O'Donnell and company: why would any magazine dedicated to quality journalism -- and Esquire has earned that description -- promote the right-wing framing that says that our most urgent economic issue is reducing the government's deficit spending? That's never been more misguided than over the last several years, when borrowing rates have been historically low and unemployment at staggering highs (especially for minorities, the long-term unemployed, and, yes, young people).

In return, Esquire's commission ignored the key facts about the nation's deficits: that today's deficits are caused by military spending and tax cuts, especially for the wealthy, and that tomorrow's deficits will be caused by runaway health care spending.

The magazine gave its "Commission" the wrong errand -- and picked a group that was sure to follow it through. The unpredictable Lawrence O'Donnell does some terrific work. But in many ways he's still an '80s and '90s-style "centrist" Democrat, with all the attendant forms of blindness that conveys. The two Republican Senators on his "Commission" were, like fellow centrist Democrat Bill Bradley, known to sympathize with the cuts-over-crisis school of government economics. (Gary Hart, the remaining member, was the sole disappointment of the group.)

Why Are These Men Laughing?

This all-male contingent quickly issued its, er, briefs. Their first recommendation was to raise the retirement age to 70 -- because, it said, "Americans today are living and working longer than in previous generations."

Wrong. The difference in longevity between current and past generations is negligible for people who survive infancy. A further increase in the retirement age (it's already scheduled to rise) accomplishes two things, both of them disastrous: it slashes Social Security benefits for seniors, and it exposes millions of additional aging Americans to the vagaries, inadequacies, and devastating economic and medical consequences of our inadequate private-sector health insurance system.

The Commission compounded its Social Security cuts by adopting a new, benefit-slashing formula that lowers the already-inadequate way that increases in the cost of living are calculated. Who would suffer most under this lame-brain right-wing idea? The groups that would be unfairly penalized include African Americans and lower-income people of all races, whose life expectancy is appreciably less than that of whiter and richer people.

Who would benefit? The aforementioned whiter and richer people.

Beneficiaries

Another catastrophic "Commission" idea was to repeal employer health-care tax exclusion and offer a refundable health care tax credit instead. This is a longstanding Newt Gingrich proposal that would effectively bring our employer-sponsored health insurance system to an end.

What would replace it? Nothing. The "refundable" credit would force people to buy health insurance in the private-sector health insurance market, which has never succeeded in providing adequate coverage. Medical inflation would quickly render health coverage completely unaffordable.

The losers? Everybody but the rich, who would be thrilled by the additional tax cuts this could encourage. They'll benefit plenty by everyone else's loss of benefits.

The "commission" also wanted to raise the gasoline tax by a dollar -- another measure that would particularly hurt the middle class and the poor.

Missing Pieces

What didn't the Commission propose? Raising taxes on the wealthy. Why, the "Commission" even bragged that it met the unintended goal of "keep[ing] individual tax rates at or near their current levels for all Americans."

In other words, this "bipartisan" group does what "bipartisan" groups always do inside the Beltway: it protected the interests of the rich and powerful at everyone else's expense.

Nor did they propose a Medicare for All plan, which would bring down both government's expenses and that of families. Their idea of medical cost-cutting is "malpractice reform," an idea that's been debunked over and over.

Fingerprints

Who would be hurt most of all by this "Commission" if its ideas ever became reality? Young people. Recommendations that lower the increase in cost of living adjustments result in benefits which are lower and lower with every passing year. The younger you are, the more you'll lose.

Esquire added this footnote to its report: "With thanks to the Committee for a Responsible Federal Budget and its president, Maya MacGuineas, for their invaluable assistance in providing the commission with accurate data and budget options."

The "Committee for a Responsible Budget" and its president receive heavy subsidies from -- you guessed it -- Pete Peterson. Although the Esquire write-up of this exercise described O'Donnell as "a realpolitik liberal who has a finely honed intolerance for bullshit from either side," a little more honing would have been in order.

War Babies

Anybody who thought Esquire couldn't top that misguided effort was wrong. Their latest attack on young people is a piece called "The War on Youth," and it begins as follows: "Twenty-five years ago young Americans had a chance."

The piece then quickly moves on to repeat one falsehood after another, beginning with the often-quoted and entirely misleading comment that "in 1984, American breadwinners who were sixty-five and over made ten times as much as those under thirty-five. The year Obama took office, older Americans made almost forty-seven times as much ..."

Actually, author Stephen Marche even misstates the misleading figure: The assets of Americans in these age groups, not their income, differed by that much in 1984. Dean Baker points out that virtually all of the difference can be accounted for by home values.

What's more, these figures were compiled in 2009. Home values have continued to decline sharply since then -- and older couples who sell their homes for cash would then have to pay rent, provided they can find a buyer. What's more, the figures aren't broken out by over-65 age bracket, but I strongly suspect that these homeowners are strongly skewed toward pre-Baby Boomer age groups. If so, that would seriously undercut the piece's "it's the Baby Boom's fault" premise.

As Dean Baker says, "What matters for inter-generational equity is the overall state of the economy and the physical and natural infrastructure that we hand down to future generations." You wouldn't know it by reading this piece.

Life During Wartime

"Democrats may not be actively hostile to the interests of young voters," Marche proclaims, "but they are too scared and weak to speak up for them." He goes on to say that "[t]he biggest boondoggle of all is Social Security. The management of entitlement programs, already weighted heavily in favor of the older population, has a very specific terminal point that coincides neatly with the Boomers' deaths. The 2011 report by the Social Security trustees estimates that, under its current administration, the fund will run out in 2036, so there's just enough to get the oldest Boomers to age ninety."

This is exactly backwards. Democrats should be defending Social Security -- which will not "run out of funds in 2036." It's estimated to be able to pay 75 percent of its current benefits after that. How is the difference best made up? According to Ronald Reagan's former chief actuary for Social Security, by raising the payroll tax for high earners.

But the one option that's fairest and most effective -- the one that discommodes the wealthy -- is once again missing from the pages of Esquire.

Talk about "dubious achievements."

The Real War on the Young

What's most astonishing about Esquire's latest folly isn't what's in the piece but what isn't. An entire generation is entering the workforce without jobs, and this period of early-career unemployment is likely to hold back unemployed young people's earnings for the rest of their working lives.

And yet the "War on Youth" piece can only discuss unemployment as if it were a generational issue -- which it isn't. Older workers are also suffering disproportionately, something the piece chooses to overlook in pursuit of its bogus premise. (The fact that members of Congress are "old" hardly has any bearing on the real conflict, which is income-based and not age-based.)

What's more, young people are graduating college with record levels of student debt -- another front of the real war that Esquire chose to avoid. In what may be the cruelest bait-and-switch in history, they were convinced to take out exorbitant loans by leaders in the government and banking. Now they're being asked to pay those loans back. More than 25 percent of student loans are already delinquent.

And now, thanks to Republicans in the House, student loan rates are about to double.

And this is one of the areas where, refreshingly, Democrats haven't been "too scared and weak to speak." Although they've failed to push strongly enough for more jobs, Democrats in the administration and on the Hill have made constructive changes in student lending and have proposed more.

In fact, their work in this area provoked an Esquire-like salvo from Politico, which complained that "[t]he Democratic strategy consists of shame and politics." But "shame" is the appropriate response to Republican policies like these -- and if "politics" means pursuing the policies people want, we need more of it.

The real war against the young is being fought over exactly these issues -- and over the fact that we're leaving them a decaying infrastructure, an imploding economy, and a future of joblessness or underearning.

There's a war on, alright, but Esquire has gone AWOL -- that is, when it isn't fighting for the wrong side.

Fact Sheet: Inaccuracies in Washington Post's Halloween Social Security Article

Richard Eskow — Sun, 30 Oct 2011 17:37:56 -0400

A Huffington Post commenter responding to my recent piece on the Washington Post's recent Social Security article by saying that I "claimed 'inaccuracies, falsehoods, and downright lies' but delivered problems of tone, and emphasis."

Then, and without irony, the commenter links to a 'fact sheet' on Social Security from - the Washington Post!

Here's a fact sheet on those "inaccuracies, falsehoods, and downright lies"- or at least, as many as I could squeeze in here:
___________________________________________________

"Social Security is sucking money out of the Treasury."

False. The Treasury owes the Social Security $2.6 trillion.

"This year, it will add a projected $46 billion to the nation's budget problems ..."

False. It is drawing on its own funds.

"Replacing cash lost to a one-year payroll tax holiday will require another $105 billion."

False. See Dean Baker for more.

"Social Security is hardly the biggest drain on the budget."

False. It does not drain the budget at all.

"... Modest change to Social Security ... "

False. It's a significant change.

And those are only from the lines I directly quoted. Here are some other falsehoods from the piece:

"The $2.6 trillion Social Security trust fund will provide little relief."

Are you kidding? It provides $2.6 trillion in relief!

"The government has borrowed every cent and now must raise taxes, cut spending or borrow more heavily from outside investors to keep benefit checks flowing."

False, false, and false. The government has borrowed from Social Security's contributors - you and me - to fund its tax cuts for the wealthy and two wars. Since when is repaying a creditor - us - considered spending?

And that comment about benefit checks is a particularly egregious lie. With no changes to the program whatsoever, it will still be able to pay its benefits in full until sometime in the 2030's, after which it will still be able to pay 75% of its benefits - without taking a single penny from other sources.

"Many Democrats have largely chosen to ignore the shortfall, insisting the program is flush ..."

False. All the Democrats and independents defending Social Security acknowledge the long-term shortfall. Many, like Bernie Sanders, advocating making up the difference by lifting the payroll tax cap in some fashion and applying it to higher earners. (That's the approach recommended by Reagan's former actuary.)

"Such statements (like Harry Reid's, that Social Security doesn't contribute to the deficit) have not been true since at least 2009, when the cost of monthly checks regularly began to exceed payroll tax collections."

False. Social Security is drawing on its own funds and is not contributing to the deficit.

"The Bowles-Simpson plan would have righted the system's finances with a combination of payroll tax increases and reductions in scheduled benefits, mainly years down the road. It would have hit upper-income workers ..."

False. Their overall plan, heavily skewed toward the right, included tax cuts for the wealthy. And it raised payroll taxes so slowly that it would have taken fifty years to have those taxes apply to 90% in income, as they did decades ago.

Obama "endorsed the panel's proposal to tie future benefits to a less-generous inflation index."

Less generous? The current index understates the real increases in living costs for people on Social Security. It isn't "less generous"- it's a benefit cut.

"Retirement benefits were available at 65, at a time when life expectancy was significantly lower than today."

False - and disproven repeatedly. The shorter lifespans in Roosevelt's day were primarily due to infant and childhood mortality. The life expectancy for working adults is only a few years longer than it was then.

This should get readers started on the topic. They can read Baker's piece for more.

The "Social Security Chain-CPI Massacre": Underhanded, Unnecessary, Unfair, Un-American

Richard Eskow — Thu, 30 Jun 2011 22:16:04 -0400

Do you hear a noise like power saws cutting away at your Social Security benefits? That's the sound of the politicians working on the "Chain Gang."

They're promoting the "chained CPI," Washington's latest gimmick for tricking voters and cutting their hard-earned benefits to protect the wealthy. That may sound like inflammatory rhetoric, but the numbers don't allow for any other conclusion. People retiring today could lose more than $18,000 in benefits over their lifetimes - and people who are already retired will feel the pain too.

What's wrong with this idea?

1) It's an underhanded way to cut Social Security benefits (its true intent).
2) It's unnecessary.
3) It's unfair to women, the poor, minorities, and the very elderly.
4) It reflects a un-American political culture of pessimism and lost faith in the future.

Any politician who signs onto a "chained CPI" approach to Social Security will feel the wrath of the voters - and deserves to.

No math required.

Although they're using hocus-pocus to make the idea sound complicated, it isn't. The government calculates the cost of living in order to do things like determine next year's Social Security benefits. The "chained CPI" approach would alter that calculation by including changes in the way people spend their money when prices go up.

As a government agency explains, "Pork and beef are two separate CPI item categories. If the price of pork increases while the price of beef does not, consumers might shift away from pork to beef." So if people can no longer afford pork, they're spending less. Under a chained-CPI approach cost of living adjustments (COLAs) would then go down.

See where this is going? If not, stick around.

Underhanded

The "chain gang" insists that this wouldn't be a benefit cut, just a more accurate calculation. That's an attractive argument with only one flaw: It's wrong. The "chained" approach would understate the cost of living for the elderly and disabled people who rely on Social Security.

In plain English, it would gyp them.

In fact, even the current system for calculate COLAs gyps them. Retired and disabled people pay twice as much for healthcare as the average person. Healthcare costs have been rising three times as quickly as overall inflation, so their living costs are already understated. Transportation costs are a much bigger piece of their budget, too, which changes the numbers.

What's worse, two of the areas targeted for additional government spending cuts are ... healthcare and transportation!

The chained CPI would kick this gypping process into overdrive by reducing the increases in their benefits. And while younger Americans might make cuts in their travel and health budgets, that's usually not an option for the elderly or the disabled, so the calculations will be even more inaccurate under this system.

The math is what makes the chained-CPI approach a benefit cut.. But the chain gang knows that a lot people are intimidated by math, so they hope voters -- and a lot of lawmakers and journalists -- won't understand what's being done to them.

That's what makes it underhanded.

Unnecessary

It bears repeating, since so many politicians want you to forget it: Social Security doesn't contribute to the deficit. It can't, by law. It's completely self-funded through the payroll tax (which is what makes the choice of the payroll tax for a tax 'holiday' so insidious).

What's more, the dollars involved are trivial when it comes to the budget debate. Politicians say they're looking for $4 trillion in cuts over ten years. Even if benefits did contribute to the deficit the chained CPI would only save $122 billion, a mere 2.8% of the target.

That's peanuts for them. But it's not peanuts for the average woman on Social Security. She only receives $890 per month. By the time she turns 80 this program will be taking $45 dollars out of each month's check - nearly $500 a year. Why would Democrats (or Republicans, for that matter) agree to use her spending money to balance the budget? They'd help an old lady across the street -- then pick her pocket. Why?

Because that's how you show you're fiscally "serious" in today's bizarre Beltway culture. This warped "bipartisan" value system was spawned in large part with money spread around town by people like billionaire Pete Peterson. They see cuts in Social Security and other spending as a way to shrink government and keep taxes low for folks like ... well, like billionaire Pete Peterson.

Remember the expression about "robbing Peter to pay Paul"? Cutting Social Security is a way of "robbing Pa to pay Peterson."

Unfair

The effects of the chained CPI are cumulative, so the longer you live the worse it gets. By the time you're eighty your benefits will have been cut by nearly 5% per year. Some chained-CPI supporters propose a "birthday bump" - small benefit increases after you've been retired for twenty years - but they wouldn't offset the cuts you will have endured before then, and they'll only benefit people who live long enough to "enjoy" them. (Minorities and lower-income people have shorter life expectancies, too, so the "bump" would unfairly benefit wealthier and whiter beneficiaries.)

The chained CPI would be unfair to women, who receive less in benefits on average than men and can least afford the cuts. They live longer than men, too, so they're more likely to see their benefits dwindle with every year that passes. (And remember, the "bump" won't offset those cuts.)

It would also be unfair to the middle class, which has has seen its retirement savings (much of which was invested in their houses) disappear because of Wall Street's shenanigans. And ir would be unfair to lower-income working people who are the least likely to have retirement savings or pension plans.

Un-American

Remember the paragraph about how the chained-CPI figure goes down if people can't afford pork? That's not a sound way to calculate the overall cost of living. If I can't afford cable TV and stop watching it, Time Warner's prices don't go down. But under this plan, my misfortune also becomes my little contribution to next year's benefit cut.

How would this work for Social Security? Let's see: If old people stop buying pork their "chained CPI" benefit will go down. If that forces them to live on catfood, their benefit goes down again. And if that forces them to switch to the local supermarket's cheap generic brand instead of the tastier cat foods (Fancy Feast's "Grilled" line was my late cat's favorite), benefits would go down even more.

It's a death spiral. Soon we'll be calculating the cost of survival, not the cost of living. It's a process that leads nowhere but down, until even survival is factored out of the equation.

Besides, what would it mean if we adopted the chained-CPI mentality? What are we saying about ourselves if we calculate our cost of living by subtracting out all the things we can no longer afford? The chained CPI is institutionalized pessimism. It's a way to prefabricate our own shrinking future, to accelerate an ever-diminishing way of life while hiding the truth from ourselves.

That's why it's un-American. We've always been a nation of optimists who believe in growth. The chained CPI reflects a new and diminished political culture - one that believes in a future of dwindling resources, increasing deprivation, and inability to meet our own promises.

Voters in both parties and across all demographic lines oppose Social Security cuts. They'll see this for what it is - a sucker punch to the middle class and the most vulnerable among us. If our leaders sign onto it they'll be making a tragic mistake that we - and they - will come to regret.

________________

REFERENCES

For more on the chained CPI's impact on women, see this report from the National Women's Law Center.

For more about its impact on disabled and elderly recipients, see the National Association for Social Insurance.

For more on the different rates of cost inflation for the elderly vs. the general population, see this Congressional Budget Office report.

For a thoughtful criticism of the chained-CPI approach from a conservative who served in the Social Security Administration under President Bush and supported Social Security privatization, see this piece by Andrew Biggs on the website of the American Enterprise Institute.
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