MORNING MESSAGE: So Who Is It That Cares About The Deficit Anyway?
Digby via Hullabaloo: "Your reading assignment is this great piece in the New York Review of Books by Jacob Hacker and Paul Pierson entitled 'What Krugman & Stiglitz Can Tell Us': … 'While the Ryan budget is at odds with the stated priorities of the majority of Americans, one group appears quite supportive of its general thrust—the superrich. Most polls reach few if any extremely wealthy Americans. But thanks to a pilot poll recently commissioned by a team of political scientists, we now know that the very rich are indeed different from the rest of Americans: They place much higher priority on deficit reduction and cutting spending, and much, much lower priority on reducing unemployment.'"
Fed's Economic Booster Shot
Paul Krugman has faint praise for Fed move: "Bernanke is not relying on portfolio balance effects alone; instead, he’s trying to move expectations by declaring that the Fed will continue to ease for some time after the economy has begun to recover … In effect, the Fed seems to be trying to “credibly promise to be irresponsible”, which is what I advocated way back when in this kind of situation. … That’s all good. However, it’s kind of vague. No clear target, whether nominal GDP or some kind of inflation/unemployment mix. … And since the whole point is to move expectations, leaving this kind of wiggle room is not a good thing."
Romney parrots the conservative anti-Fed line (Think Progress): "In a statement following the Fed’s announcement, the Romney campaign called the central bank’s move “artificial and ineffective“: … 'After four years of stagnant growth, falling incomes, rising costs, and persistently high unemployment, the American economy doesn’t need more artificial and ineffective measures. We should be creating wealth, not printing dollars.' "
Rep. Barney Frank's rebuttal: ""[Republicans'] bitches and moans about the consequences of quantitative easing have been as inaccurate as the similar predictions they've made about same-sex marriage," Frank told The Huffington Post in a phone interview on Thursday. "None of the negative consequences they've said would happen have." Frank, who became the first sitting member of Congress to marry someone of the same gender in July, said that the Federal Reserve's new quantitative easing measures will boost the economy through the "wealth effect," in which higher stock prices spur consumers and companies to spend more by making them feel wealthier."
Congress takes first step to avert a government shutdown: "The House approved government funding for six months into the 2013 fiscal year on Thursday afternoon through what’s known as a continuing resolution, or “CR,” with bipartisan support that will keep the US government chugging along for six months, at a rate of spending just .6 percent higher than the current year. The measure passed on a 329 to 91 vote, with 70 Republicans and 21 Democrats opposed to the measure. It will be handed up to the Senate where it is expected to pass next week."
The Middle-Class Struggle For Survival
Richard Kirsch of the Roosevelt Institute on the importance of making work pay again: "We need to confront the fact that even though the proportion of Americans with a college education doubled in the past three decades, the share of working people with a decent job dropped. Six out of ten (58 percent) jobs now emerging from the recession are low-wage. On top of that, the jobs projected to have the most openings between now and 2020 are mostly low-wage and require no more than a high school education. So there is no reason to think things will get better unless we act. .. A first step is to restore the minimum wage, which buys 30 percent less now than it did 40 years ago."
Wage stagnation is as important as unemployment in the state of working America, writes Michael Lipsky at Demos: "What do these observations, derived from statistics, mean for people? They mean that as children are born and expenses rise, household income is not keeping up with the rising costs of raising a family. For people seeking to start families they mean postponing having children because they don’t make enough money. In short, the majority of Americans face discouraging conditions as they contemplate their ability to provide for their families. We need a more vigorous discussion of wage stagnation because the issue is not likely to be addressed soon."
Author Hedrick Smith discusses "WhoStole the American Dream": "There's no question that the power shift in Washington, starting in the late 1970s that made corporate America the dominant influence with Congress, brought changes in the tax system and rolled back regulations to the advantage of corporate America, Wall Street and capital investors. What needs to be added, as I do, is that the middle class has been severely hurt by the change in the business ethos from a vision of stakeholder capitalism in the 1950s, 1960s and 1970s that saw it as the duty of CEOs to balance the interests of investors, workers, management and local communities to the New Economy ethos of "wedge economics" of the 1980s, 1990s and 2000s, which cut many average Americans out of their fair share of America's growth and prosperity." How to reverse this? "It will take an effective organized people power, a broad-based movement built on a change in the public's mindset—a sense that the current lopsided split in the nation's economic gains is unfair to most Americans and that this is no longer tolerable."
How the government fights poverty, in one chart: "In 2011, the poverty rate not including unemployment insurance or Social Security would have been 7.8 percentage points higher, and it would have been 3.1 points lower if you take food stamps and EITC into account. So all told, these four government programs reduced poverty by 10.9 percent, or 33.6 million people."
In time for the first anniversary of Occupy Wall Street, "The Debt Resistors' Operations Manual": Yves Smith: "The release of the The Debt Resistors’ Manual suggests something very different: that the movement is still alive, if much less visible, and is developing new avenues for having impact. This guide is designed not only to give individuals advice for how to be more effective in dealing with lenders but also sets forth some larger-scale ideas. This is a project of a new OWS group, Strike Debt. Fighting for debt renegotiation and restructuring, something that the bank-boosting legacy parties have refused to do, is becoming a new focus for OWS efforts."
States Pass 'Baker's Bills' to Lift Struggling Households (Bloomberg Businessweek): "California will become one of 32 states with cottage food laws, sometimes called “baker’s bills” because they often apply to home-baked goods. The financial crisis and recession have sparked the passage of 14 of these laws since 2008, many championed by would-be entrepreneurs motivated by pay cuts and layoffs."
Chicago Teacher Strike Update
Chicago Sun-Times: "CPS officials say agreement possible Friday, union less optimistic": “Anything is realistic. We’re really closing a lot of gaps,’’ said School Board President David Vitale as he emerged from negotiations around 12:45 a.m. However, Chicago Teachers Union President Karen Lewis was less optimistic. “I hope he knows something that I don’t know,’’ Lewis told reporters.
Amy Goodman: "Teachers strike in Chicago is for a larger vision of public education": "At the heart of the conflict is how schools will be run in Chicago: locally, from the grassroots, with teacher and parent control, or top-down, by a school board appointed by Emanuel. … The newly-elected Emanuel had an appointed board comprised mostly of corporate executives, the Academy for Urban School Leadership. … This struggle reflects the essence of Occupy Wall Street – community members across class, race and other traditional divides uniting in disciplined opposition to corporate power."
OurFuture.org's Jeff Bryant, Dave Johnson and Richard Eskow offer perspective on the issues behind the strike and the larger issue of "school reform."
Breakfast Sides
How Congress left our embassies exposed (Salon): "Among the worst trends in U.S. foreign-policy making in recent decades is the decline of the State Department and the corresponding rise of the Defense Department. … Few things reflect America’s skewed foreign-policy priorities more than the funding discrepancies between the two departments. … In 1950, State had 7,710 diplomats abroad. In 2001, it actually had fewer — just 7,158. … The State Department’s funding request for 2013 was $51.6 billion, $300 million less than 2012, because, it said, “this is a time of fiscal restraint.” The Pentagon’s 2012 budget? $614 billion."
Columbia Journalism Review uses Social Security Works fact sheet to explain "what a higher retirement age really means": "Moving up the age for collecting benefits may sound easier to swallow than some other proposed changes for Social Security, like cutting cost of living hikes for all beneficiaries. … But what is not well understood is that raising the retirement age results in a benefit cut. A law passed in 1983 raised the age from 65 to 66 now and eventually to 67. That change will result in an average cut of about 13 percent for retirees. As the accompanying chart shows, raising the statutory retirement age to 69 would result in a another cut of around 13 percent. That’s a very large cut."
GOP lawmakers want Romney to stay fuzzy on tax reform details, reports The Hill: "Congressional Republicans are fully backing Mitt Romney’s broad-brush approach to tax reform, illustrating the advantage that both sides see in being light with the details. … That sentiment is shared both by veteran GOP tax-writers and the freshmen in the Republican rank-and-file. … But as they battle President Obama for votes, the GOP ticket is also under some pressure — even from some on the right — to offer a clearer picture of how they would jolt the economy through the tax code."
