Austerity's Strange Logic

I have had a few things to say about Social Security over the years (including here, and here). My prime concerns have focused on how mischaracterized it is as a drag on the federal debt, which it isn't, and how successful it has been, despite repeated and wildly inaccurate claims to the contrary.

A recent article by Marty Wolfson has helped put some perspective on how Social Security works, and why current attempts, by Republicans mostly, but also by some Democrats, to curtail it in the name of austerity is so wrong. When speaking of the federal debt, Wolfson reminds us that: 

Two quick points should be noted here: 1) Recall the long-standing theme presented mostly by Republicans who howl that social security will run out of money by (insert scary date here), and use that questionable assertion as evidence that social security does not work, and that the solution is to either privatize it or cut benefits immediately. The implication is that cutting benefits will reduce the Social Security payout and thus increase its viability. Two) Although supporters of social security like to point out, correctly, that the program pays for itself, by law, through contributions, I now think I see why conservatives believe the system adds to the federal debt. By law, paid-in Social Security contributions don't sit in a shoe box, nor are they invested in stocks, like Wall Street would like. The US government takes the $ billions in cash it receives each year and puts it in Treasury securities. As Wolfson puts it:

The $17 trillion (federal debt) figure is a measure of “gross debt,” which means that it includes debt owed by the U.S. Treasury to more than 230 other U.S. government agencies and trust funds. On the consolidated financial statements of the federal government, this intragovernmental debt is, in effect, canceled out. Basically, this is money the government owes itself. What is left is termed “debt held by the public.” It is this measure of debt that is relevant to a possible increase in interest rates due to competition for funding between the private and public sectors. It is also the category of government debt used by the Congressional Budget Office and other analysts. (Of course, the full economic significance of any debt measure needs to be considered in context, in relationship to the income available to service the debt.) The total debt held by the public is $12 trillion. 

The Social Security Trust Fund comprises $2.7 trillion of the total $5 trillion of various US Treasury debt instruments held in those myriad intragovernmental accounts. Not bad for a governmental agency that is supposedly going broke.

Social Security accumulated all these Treasury securities because of the way that its finances are organized. Social Security benefits to retirees (and to the disabled) are paid for by a payroll tax of 12.4 % on workers’ wages (with 6.2% paid by the worker and 6.2% paid by the employer), up to a limit, currently $113,700. If, in any year, Social Security revenue is greater than what is needed to pay current retiree benefits, the surplus must, by law, be invested in Treasury securities (most of which are “special obligation bonds” issued only to the Social Security Trust Fund).

So why are the calls for austerity so ill-advised?  And why is it so obvious to those of us who bother to research the issues (and have a coherent analytic framework, but I digress) see that "fixing" Social Security is not the true objective? The fact that the program is running up large surpluses which then must be parked in Treasury securities sounds good in a way; surpluses sound better than deficits, which would surely drive fiscal hawks crazy. I'm guessing that some congressional supporters in years past helped to ensure a surplus condition so that conservative critics would have less to bitch about. No such luck, for now the critics bemoan the large surplus the Social Security Trust Fund now maintains, though they invariably just call it debt, and then they still insist that the money will run out in, what?, 28 years? 75 years? As if suddenly there were no adjusting allowed, as we have successfully done in the past.

Here is the simple reality. The Social Security Trust Fund was not envisioned to have such large surpluses as it currently has. The fact that there is a meaningful surplus is a signal that contributions are unnecessarily high, or that the payout in benefits is needlessly low, or some combination of the two.

As Wolfson writes: 

Therefore the $2.7 trillion of Treasury securities held by the Trust Fund came about not because entitlements are out of control and the government has been forced to borrow to meet retiree benefits, but rather because future retirees have paid more taxes than necessary to meet benefit obligations. Workers have essentially been prepaying into the Trust Fund in order to provide for their future benefits.

The most pointedly ignorant response, the one that Congressional Republicans keep making, is to suggest that we cut benefits. Doing so will only serve to drive the imbalance further by decreasing the outflow of benefits and further increasing the need to issue or maintain Treasury securities for the inflow of money earmarked for future claims. It is precisely the opposite of what austerity proponents claim. A far more useful solution would be to increase benefits, and pump more money into the economy and at the same time reduce the need to buy ever more Treasury securities. 

A careful reading of Republican proposals and positions makes it clear that actually fixing most government institutions, programs, or issues, is no longer that party's objective, certainly not with this tea bagging crowd. The most jaw-droppingly obvious solutions, which have worked well in the past, are studiously avoided, and kept from the public, the media, and legislative consideration. And that is because the objective, not of all conservatives, but of true Tea Party devotees, is to emasculate the federal government. Those who actually read American history know this has always been the case.

Democracy's Ills

How does that quote go again: "These are the times that try men's souls"? There is a frustrating duopoly at play; in our elections, in civil discourse, in our constitution, and certainly in our strained sense of democracy. We have come to learn, again, that our constitution is flawed and limiting. We, or most of us, say we support democracy, but we can't avoid the question as to why democracy and free elections have led us to the abyss. We speak of equality, think of ourselves, naively, as a classless society, and insist on such time-tested homilies as equal representation, or no taxation without representation (yeah, that's a good one). We have created or inherited a political system that we once urged, or sometimes forced, upon the world but which is now badly failing us.

On the one hand we continue to espouse boilerplate straight from civics class: freedom of expression, free markets makes for free people, a free press is the bedrock of a free society, all this freedom wrapped in a proud belief that minimum government yields maximum democracy --but it's all painfully juxtaposed against the urgently felt need to take back the public arena from the oligarchs, the corrupt, and religious fanatics. We, most of us, value freedom of speech; some of us still venerate the oh-so-learned Supreme Court for protecting our rights, but how many of us really believe Citizens United was a good decision? Or that denying the hyper-wealthy--or corporations--the right to buy elections, politicians, and the media is an affront to their free speech? 

On the other hand, do we know, or care to know, how much voter ignorance and apathy have contributed to our condition? I didn't vote for the jackasses that say we need to cut social security and food stamps from the poor because that's a good way to balance the budget. But millions did.

We may lament that people vote for selfish or irrational reasons, but we must remind ourselves that in the formative years of our republic, universal suffrage was seen as a horrible idea by the aristocracy and most of the founding fathers. The argument always given was that commoners, the illiterate, women, the melanin-enriched, the unpropertied, all of them would make poor voting choices. Specifically, they would vote themselves goods and services that were economically unsustainable, and would destabilize government. They usually left unstated their fear that the power and privileges of the upper class would be threatened by true democracy. 

So it might seem ironic that the most powerful and privileged in society, and among the best educated, are now the ones pushing and protecting policies, practices and legislation that are selfish, reckless, and demonstrably unsustainable. The middle class largely supports the same stabilizing policies of the past, including responsible taxation, support for the self-funding and efficient social security system, regulations that return us to the decades of stable banking we once enjoyed, and more.

And yet just enough people vote for politicians who have made it clear they don't want Americans to have better health care, have no intention of reining in Wall Street, will forever feed the military-industrial gravy train, and consistently vote for the interests of the wealthy and against the poor and working class. 

The real tragedy of American democracy is not just that so many politicians, mostly Republicans, actively support a Dixified nation with a small ruling class at the bidding of corporations. It is that many others, mostly Democrats, claim to support working class folks, but end up going along with the money train; it is they who will settle for scraps and claim progress; it is they who will support legislation so weak, toothless, and watered down as to be useless. They, not all, but too many of them, want you to believe they are fighting for middle America. 

What is depressing about this is though there are many politicians who want to and try to do the right thing, there always seems to be enough politicians, either outright reactionaries or compromised "moderates" who either bitterly oppose anyone who tries to do anything that most Americans actually support, or quietly insist-mostly at election time--that they are for you, but cannot or will not actually promote legislation that is, in fact, popular. Who do they think votes them into office? Why don't they get behind legislation that their base supports? You would think that far-right Republicans would abandon bills that even their Republican base is cool to, just as Democrats should be more enthusiastic about, say, a minimum wage increase. How politically popular does something have to be before Democrats will come out of hiding and publicly support it? It's as if they would rather dodge the attacks from Republicans and right-wing media, and chase Wall Street dollars, than respond to the voters who actually put them into office. It is little wonder that so many of America's poor and working class are disaffected and don't bother to vote. 

But hey, congrats to Harry Reid on filibuster reform; you too Diane Feinstein. It took you a while, but you finally decided that after years of record obstructionism that you should step in and actually do something about it. Too bad it took you five years to notice what Republicans were doing to the economy, the political process, and your party's president.

Who's this Jerry Mander guy?

Republicans have gone through through a lot of hand wringing after last November's election losses. Many operatives were criticized for not doing better. After all, the money just poured into Republican campaign coffers; "we paid for this election fair and square." But party faithful cannot complain too much, not when you consider how deeply unpopular and reviled Republicans in Congress are. It is a wonder they won as many seats as they did. Let's just say Republicans did well, though for the wrong reasons.

Republicans were never in the running for the White House, not really. Despite hopes, and indeed, firm convictions they would prevail, Republicans paid the price for nominating a deeply flawed candidate.

And though they lost a few seats in the Senate, Republican pols and voters remain dramatically over-represented. The reason why there are so many Republicans in the Senate-whether they actually control it or not, is simple enough; the reason has been with us since the very beginning of the republic. The US Senate is not designed to reflect proportionate representation. As every civics class ought to teach, only the US House of Representatives sends members in accordance with each state's population; big states have more representatives in the House than do small ones. It's only fair, you see.

The Senate, on the other hand, was designed at the outset to counter the potential for big-state tyranny. So each state sends two senators regardless of size. Sounds kind of, sort of, reasonable, maybe. Except that what we now have is small-state tyranny. One result is that a state such as Alaska, with population of about 750,000, or Wyoming, with population of about 570,000, have equal voting power with California, with over 38 million, or New York, with over 19 million. And wouldn't you know it, AK, WY, and several other small, rural states reliably send Republicans to the Senate.  Of course, there are small blue states that benefit as well, including Vermont, Delaware, and Hawaii. But taken together, Republicans win senate seats with fewer votes, sometimes far fewer, especially in the rural, ranching and farming states. The fact that millions more Americans actually vote for Democratic candidates than they do for Republicans, and have less to show for it, reflects systemic electoral misrepresentation that skews the Senate towards Republicans, rural farmland, and Dixie.

This disproportionate representation, you may say, is regrettable, but worth it because it helps offset the proportional representation in the House, which obviously favors large states. And besides, proportional representation is written in stone, or at least the US Constitution. So yeah, there's that.

Now we see, pace the Constitution, that Republicans are overrepresented in the US House as well. Color me not surprised.

Here's how Bill Berkowitz, writing in Alternet, puts it:

Tens of millions poured into a stealth redistricting project before the 2012 elections kept dozens of GOP Districts safe from Democratic challengers.

If somewhere in the recesses of your mind you were wondering how, despite President Barack Obama’s re-election victory and the Democratic Party’s gains in the Senate, Republicans continue to control the House of Representatives, think redistricting.

Redistricting is the process that adjusts the lines of a state’s electoral districts, theoretically based on population shifts, following the decennial census. Gerrymandering is often part and parcel of redistricting. According to the Rose Institute of State and Local Governments at Claremont McKenna College, Gerrymandering is done “to influence elections to favor a particular party, candidate, ethnic group.”

Over the past few years, as the Republican Party has gained control over more state legislatures than Democrats. And, it has turned redistricting into a finely-honed, well-financed project. That has virtually insured their control over the House. “While the Voting Rights Act strongly protects against racial gerrymanders, manipulating the lines to favor a political party is common,” the Rose Institute’s Redistricting in America website points out.

Dana Milbank writing on Jan. 4, also acknowledged the important role of gerrymandering:

The final results from the November election were completed Friday, and they show that Democratic candidates for the House outpolled Republicans nationwide by nearly 1.4 million votes and more than a full percentage point — a greater margin than the preliminary figures showed in November. And that’s just the beginning of it: A new analysis finds that even if Democratic congressional candidates won the popular vote by seven percentage points nationwide, they still would not have gained control of the House.

The analysis, by Ian Millhiser at the liberal Center for American Progress using data compiled by the nonpartisan Cook Political Report, finds that even if Democrats were to win the popular vote by a whopping nine percentage points — a political advantage that can’t possibly be maintained year after year — they would have a tenuous eight-seat majority.

In a very real sense, the Republican House majority is impervious to the will of the electorate. Thanks in part to deft redistricting based on the 2010 Census, House Republicans may be protected from the vicissitudes of the voters for the next decade. For Obama and the Democrats, this is an ominous development: The House Republican majority is durable, and it isn’t necessarily sensitive to political pressure and public opinion.

According to the Jan. 4 final tally by Cook’s David Wasserman after all states certified their votes, Democratic House candidates won 59,645,387 votes in November to the Republicans’ 58,283,036, a difference of 1,362,351. On a percentage basis, Democrats won, 49.15 percent to 48.03 percent. 

This in itself is an extraordinary result: Only three or four other times in the past century has a party lost the popular vote but won control of the House. But computer-aided gerrymandering is helping to make such undemocratic results the norm — to the decided advantage of Republicans, who controlled state governments in 21 states after the 2010 Census, almost double the 11 for Democrats.

Gerrymandering has been with us from the republic's beginnings, and it certainly isn't just Republicans who jockey for advantage.  But the most recent redistricting results are ominous. The country is divided more than it has been in generations; Republican indifference to voter preferences, along with some clever insulation from the voters themselves, come at a time of breathtaking extremism in that party's politics.

"He who controls redistricting can control Congress." Karl Rove

Lying Ryan

What the hell is wrong with Paul Ryan? He recently tried to blame President Obama for a GM plant closing in Janesville, Wisconsin, as if Republican obstructionism had no role. Worse, Ryan, Romney, and nearly everyone in their party said at the time that Obama was wrong to intervene to save GM. This was shortly after the Janesville plant closed. Romney also made it clear that government should let GM go bankrupt.

Ryan blamed the lost jobs at Janesville, which is in his congressional district, on Obama. Did Obama not intervene? Did GM not survive? Ryan wants you to ignore the fact that GM is still in business, meaning many plants are up, operating, and profitable, but attacks Obama for not saving that one plant that happens to be in Ryan's district.

Ryan wants it both ways. Government should not intervene in commerce; the free market has the solution. Yet he chides Obama because workers in Ryan's district lost their jobs precisely because, he says, Obama did not act to save that specific plant. I thought you guys loved the Randian free market rough and tumble; you know, creative destruction and all that? And is there any one out there who doesn't acknowledge that GM had no choice but to shed manufacturing output?

The final irony to this is that GM closed the plant in 2008, under George W. Bush. Ryan is so determined to score cheap political points that he got his story completely screwed up.

A more complete chronology, complete with video, can be found here.

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There is a small addendum to the Janesville plant story: it made SUVs. People are moving away from them for very rational reasons. Ryan and others want to blame the plant closing on Obama because of high gas prices, overlooking the fact that gas prices have been affecting sales of SUVs for years. They're also ignoring the intense market competition within the segment. This crap about high prices makes Americans look stupid; we have the lowest gas prices in the industrialized world. The real motivator in politics is that so many of us are addicted to the idea of perpetually cheap gas. We want a world where gas is so cheap we can drive gas-guzzling behemoths with impunity. The trend towards smaller, more fuel efficient cars, towards hybrids and, gasp, electric ones, towards the legitimacy of downsizing and public transportation, is inevitable.

Factor in global warming, pollution, and the growing role of solar and wind power. All of this has been embraced by liberals here as well as significant majorities in other countries, many of which have become demonstrably more fuel-efficient than the US, and environmentally cleaner to boot.

And it bugs the shit out of Republicans.

A $50 lesson?

I recently got a whiff of the story below on Facebook. I couldn't help but notice, to the point of nausea, how many others thought it was persuasive, reminiscent as it is of other calls to mindlessness, such as "god said it, I believe it, that settles it."

There is, I would argue, much cognitive processing in common between those who think the $50 lesson represents reality and those inspired by the above tautological hairball. Here, in its entirety, is what passes in Republican circles as political gospel.

The $50 Lesson 

Recently, while I was working in the flower beds in the front yard, my neighbors stopped to chat as they returned home from walking their dog. During our friendly conversation, I asked their little girl what she wanted to be when she grows up. She said she wanted to be President some day. Both of her parents, liberal Democrats, were standing there, so I asked her, "If you were President what would be the first thing you would do?" She replied... "I'd give food and houses to all the homeless people." Her parents beamed with pride! "Wow...what a worthy goal!" I said. "But you don't have to wait until you're President to do that!" I told her. "What do you mean?" she replied. So I told her, "You can come over to my house and mow the lawn, pull weeds, and trim my hedge, and I'll pay you $50. Then you can go over to the grocery store where the homeless guy hangs out and give him the $50 to use toward food and a new house." She thought that over for a few seconds, then she looked me straight in the eye and asked, "Why doesn't the homeless guy come over and do the work, and you can just pay him the $50?" I said, "Welcome to the Republican Party." Her parents aren't speaking to me anymore.

What is it with conservatives and their simplistic bromides? The underlying assumption at the end is that the liberal parents are at a loss of words, silenced by Republican wisdom. More likely it is because they realize their neighbors are freakin' idiots. There are entire books devoted to the harms of conservative economic dogma, such as outsourcing, deregulation, free trade, wage suppression, and, as always, another round of tax cuts for the wealthiest. Responding to the $50 lesson, from the standpoint of policy and that stuff they call data, is like picking low-hanging fruit. It is why progressives often consider conservatives to have low self-awareness, as personality inventories often show. Or to use technical jargon; "Are the actually persuaded by this tripe?"

That would be a fact-based approach, one that wonkish progressives are inclined to follow. But arguing the economic evidence, the way, say, Paul Krugman would, misses the point. Much of what pushes a conservative's button is piss poor economics; the mistake is in believing that a quest for good policy that benefits as many as possible is what motivates those on the right as it does for the left.

It doesn't. We are talking about how conservatives tend to interpret the world. They traffic in these asinine tales because they are starkly simple, comforting, and supportive of their identity, the same way they pound devotional material into their heads, or attach great importance to symbolic acts, such as flag-waving. The $50 lesson and other "just so" stories are a staple of the American right wing because they strike a moral note; usually with symbolism as blunt as a Disney movie. They are feel-good formulaic stories that moralize and reinforce biases through use of inane and unambiguous tales. They are usually not very accurate, sometimes insanely misleading, but accuracy--and fairness-- are not the objectives; moral reinforcement is.

The similarity to the religious right's jaw-dropping theological claims is not a coincidence. Televangelists never tire of saying evolution is a fraud, insisting, for example, there are no transitional fossils, even as evolutionists find them time and again. The evidence is ignored, explained away, or even, bizarrely, blamed on Satan.

Literate, scientifically minded, and modern Americans often have a difficult time confronting a reactionary right, one that is disproportionately powerful in government, business, and religion. Many of us fail to realize that for the religious right, just as it is for so many conservative Republicans, it is about perpetuating a belief system and the moral basis of an authoritarian culture; learning and accepting scientific realities is not the primary motivation, in church or in government.

Jesus and Mo are especially good at making my points.

Scary Black Man Gonna Getcha!

Republicans want so desperately to convince just enough Americans that President Obama is not one of us; too dark, funny name, Kenyan, a fascist and a Marxist. And even if he was born in Hawaii, that's not authentic enough.

And Mitt not-his-real-name Romney? He's one of us, except maybe for the magic underwear, and his $250 million net worth, and his overseas bank accounts. The Internet is crawling with trolls that somehow think the fact that Obama once went by the name of Barry is proof the man is hiding something, but don't give a rat's ass that their man is named after a baseball glove. 

The latest smear is much like others in recent months: lift a quote out of context, insist upon the most asinine conclusion possible, get absolutely hysterical about it, and then pound it repeatedly into the heads of your listeners. I'm looking at you, Fox.

You know the story. I know you know. President Obama supposedly claimed that all you successful business owners out there didn't really build your own business. He must be claiming that you are just lucky to inherit it, or government gave it to you. Must be, huh? Sort of a "Limbaugh said it, I believe it, that settles it," exercise in shutting down your mind.

Here's the quote, which I have transcribed from the video below:

"If you've been successful, you didn't get there on your own....If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you got a business, you didn't build that. Somebody else made that happen...The point is that we succeed because of individual initiative, but also because we do things together."

It is that line in red that was lifted out of context and which has caused so many conservatives to foam at the mouth. But only those with their brain up their ideological ass, those willfully ignorant, cannot see that President Obama was referring to roads and bridges when he said "you didn't build that."

The President then gave an example of how business benefits from the Internet, noting that it was government action that made the Internet possible. You can easily come up with your own examples: physicians may have worked hard to get through med school, but they didn't build the hospitals, or discover the procedures they now use, or create Medicare to help them get paid. They didn't invent the malpractice insurance they have, or train the lawyers and accountants that advise them, or design and build the BMW they drive to the golf course they didn't build.

It's all obvious and indisputable, really. No one denies that untold numbers of people have contributed to make what America is today. As Issac Newton said, "If I have seen further it is by standing on the shoulders of giants." Few would see any of this as controversial. But this is election season and Republicans are spending millions to manipulate the evidence, make fantastic claims, and hope you won't notice that they are lying through their teeth.

And once again, Mitt Romney continues to lead by example. Recall that Romney more than once has lifted an Obama quote laughably out of context, a stunt that is easy to catch because of little things like cameras and the Internet.

And just so this doesn't end up as a "that's-your-opinion" type of thing, and because I like to use real evidence, here is the video that shows the out-of-context quote straight from the President, along with Romney flat-out lying about it. Listen carefully to what Romney says he stands for and compare it to what the President says. You won't see this on Fox.

Others have also slapped down the breath-taking attempt to make it seem Obama said what he didn't; here, here, and here.   
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Avoiding the Real Issues

As America continues to struggle, many have reminded us of the value of innovation-- in technology and commerce, mostly, --but also in education and government. President Obama himself has often stressed the importance of innovation; how we once had it in abundance, how it now is eroding, and what we must do to get it back. The value of innovation would seem to be something that progressives and conservatives could mostly agree on, and that helps explain why the President talks about it. There is, of course, less agreement on just how innovation should be enhanced, and what the proper role of government should be.

When President Obama talks about the importance of innovation, he has often, inadvertently or not, draped it in conservative talking points. We need to "work harder", "stay in school", --or go back to school-- and get that degree or those credentials. It's a competitive world out there; if you can't get the job you want, it's because you are not properly trained and credentialed. And, of course, you cannot blame corporate America if you don't have the proper skills. We must not let down them down; work harder and prove your value to the job creators.

This storyline is not so wrong as it is incomplete. Obviously, there is much to be said for staying is school, seeking additional training, or more broadly, the role of innovation. American commerce still provides sundry example of where hard work and innovation can take you; they are the twin edges we must sharpen if we are to meet future challenges.

Every speech devoted to either of these takes the focus away from the underlying causes of US difficulty; jobs, to be sure, but also wage levels for the jobs we still have. Most people are in fact employed, and most jobs have not been outsourced or lost to foreign competition. What is not being acknowledged is that a disproportionate number of the jobs Americans now have face little foreign competition. That's the good part; the bad part is modest wages, benefits, and skill requirements for so many of these jobs. You don't need a degree to work fast food, retailing, and the like. And what about that other more technical job you went to back to school for, got a degree in, and now are heavily in debt for? Sorry, that job has been filled.

The problem of our sluggish economic growth is not a lack of innovation. We have bought into an economic doctrine that sanctifies free trade, financial deregulation, including unfettered flow of capital, and an obsession with credit and debt. It is a system designed by and for banks and the investor class, with little regard for main street or the middle class. The result is an indifference to massive trade deficits, dangerously leveraged banks, and an increasingly ability of the wealthy to avoid taxation and accountability.

Employees are seen as a mere input in this profit model. Low wages are good since they improve the bottom line. If workers are recalcitrant and actually want a living wage, management should be free to outsource production to low wage countries. To hear some tell it, management is virtually obligated to fire its American workers and seek cheap unregulated workers abroad, for improving the bottom line is management's only real responsibility. It's what the investors want, you know.

And the people who work for the company? That's labor, an input. Lower input costs mean higher profits. Why pay more? Any manager who does not seek to maximize profits is doing a disservice to investors, just like they were all taught in American business schools. It's all very rational and efficient, don't you see?

Innovation does not directly address any of this. We have innovated like crazy and what are the results? Entire industries have been shipped overseas. Because we have allowed our industrial base and concomitant skills to erode, seeking out overseas producers has become a default position. A generation has grown up assuming that American reliance on foreign manufacturers is the natural order of things.

Nor do the calls for greater innovation say who will benefit from the results. Asia is a huge beneficiary of US economic policy. For generations our tax dollars have poured into basic R&D, much of it going to public universities. It has been a great success story, and it has played a key role in America's development. And like the recent round of stimulus spending, much of those tax dollars ends up in Asia. Working harder, as even Obama has exhorted, does nothing to change the imbalances. US corporations already have what they always want; cheap labor, huge profits. The investor class took a hit in 2008, but they have recovered nicely, and have fat dividends and lightly-taxed capital gains to show for it.

So the middle class needs to work harder? For them? Because the job creators need help? Americans are already working harder than elsewhere in the OECD; we also have, in recent decades, relatively little to show for it. Wages have been suppressed, union membership has plummeted, and pensions and benefits have become even more rarefied. All of this is the direct result of flawed policies made in response to legitimate economic challenges.

Innovation will help; it always has. But the role of innovation has been undermined for the same reason our techno-industrial base has. Economic history is very clear on this: Nations that vigorously promote and defend their industrial and technical base have thrived. Those that didn't, and let their financial sector dominate, have crumbled.

America will not be an exception.

Hey, Big Spender

Republicans have now accepted as an article of faith that President Obama is not merely a  "tax and spend liberal," but that his spending is reckless, unprecedented, and making things worst. That Republicans have actually convinced themselves that Obama is far left, radical, socialist, or even just liberal, says more about the cognitive filters many wear.

For the most part, Obama's critics on the right have got their arguments about federal spending almost completely backwards. And yes, Mitt Romney is leading the way.

First, here is Eugene Robinson of the Washington Post:

There are those who tell the truth. There are those who distort the truth. And then there’s Mitt Romney.

Every political campaign exaggerates and dissembles. This practice may not be admirable — it’s surely one reason so many Americans are disenchanted with politics — but it’s something we’ve all come to expect. Candidates claim the right to make any boast or accusation as long as there’s a kernel of veracity in there somewhere.

Even by this lax standard, Romney too often fails. Not to put too fine a point on it, he lies. Quite a bit.

“Since President Obama assumed office three years ago, federal spending has accelerated at a pace without precedent in recent history,” Romney claims on his campaign Web site. This is utterly false. The truth is that spending has slowed markedly under Obama.

An analysis published last week by MarketWatch, a financial news Web site owned by Dow Jones & Co., compared the yearly growth of federal spending under presidents going back to Ronald Reagan. Citing figures from the Office of Management and Budget and the Congressional Budget Office, MarketWatch concluded that “there has been no huge increase in spending under the current president, despite what you hear.”

Quite the contrary: Spending has increased at a yearly rate of only 1.4 percent during Obama’s tenure, even if you include some stimulus spending (in the 2009 fiscal year) that technically should be attributed to President George W. Bush. This is by far the smallest — I repeat, smallest — increase in spending of any recent president. (The Washington Post’s Fact Checker concluded the spending increase figure should have been 3.3 percent.)

Here is how factcheck.org summarizes their findings:

Is President Obama’s spending an “inferno,” as Mitt Romney claims, or a binge that “never happened” as an analysis touted by the White House concluded? We judge that both of those claims are wrong on the facts. 

The truth is that the nearly 18 percent spike in spending in fiscal 2009 — for which the president is sometimes blamed entirely — was mostly due to appropriations and policies that were already in place when Obama took office. 

That includes spending for the bank bailout legislation approved by President Bush. Annual increases in amounts actually spent since fiscal 2009 have been relatively modest. In fact, spending for the first seven months of the current fiscal year is running slightly below the same period last year, and below projections.

Finally, Rex Nutting of the Wall Street Journal's Marketwatch, acknowledges that:

Of all the falsehoods told about President Barack Obama, the biggest whopper is the one about his reckless spending spree.

As would-be president Mitt Romney tells it: “I will lead us out of this debt and spending inferno.”

Almost everyone believes that Obama has presided over a massive increase in federal spending, an “inferno” of spending that threatens our jobs, our businesses and our children’s future. Even Democrats seem to think it’s true.

But it didn’t happen. Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.

Even hapless Herbert Hoover managed to increase spending more than Obama has.

Here are the facts, according to the official government statistics:

• In the 2009 fiscal year — the last of George W. Bush’s presidency — federal spending rose by 17.9% from $2.98 trillion to $3.52 trillion. Check the official numbers at the Office of Management and Budget.

• In fiscal 2010 — the first budget under Obama — spending fell 1.8% to $3.46 trillion.

• In fiscal 2011, spending rose 4.3% to $3.60 trillion.

• In fiscal 2012, spending is set to rise 0.7% to $3.63 trillion, according to the Congressional Budget Office’s estimate of the budget that was agreed to last August.

• Finally in fiscal 2013 — the final budget of Obama’s term — spending is scheduled to fall 1.3% to $3.58 trillion. Read the CBO’s latest budget outlook.

Over Obama’s four budget years, federal spending is on track to rise from $3.52 trillion to $3.58 trillion, an annualized increase of just 0.4%.

There has been no huge increase in spending under the current president, despite what you hear.

Facts don't seem to carry the weight they used to. Teabaggers will keep howling about how Obama is killing us with spending and debt, all part of his socialist takeover of America, you see. They demanded tax cuts from Bush, and now bitch that those same tax cuts have blown a hole in the federal budget. They have never read a formal paper on what Keynesian spending really means, and they don't understand why, for example, Europe's current austerity measures are counterproductive.

Bear in mind we are talking about a very large swath of voters, a majority some might say, who have a terrible time thinking through the most elementary, face-palm-in-disbelief moments imaginable. You know the types; the ones that cannot find Iraq, New Zealand, or Austria on a map; or the embarrassing number who think the sun revolves around the earth, or believe their pastor when he says evolution has been discredited.

Yeah, those people. They are easy targets for simplistic sloganeering. And Romney knows it.

Impressive

You've got to hand it to Republican Party operatives. After more than 30 years of constant effort, conservatives within the party, media, the judiciary, and in the corporate world, have managed to turn upside down much of what the public thought it knew about government, unions, taxes, and even teachers.

I make a distinction between Republicans and conservatives that some may see as unnecessary; are not Republicans and conservatives synonymous? Pretty much, at least in 2012, but it would be difficult to overstate just how far to the right the Republican Party has lurched; a process that began, to the dismay of millions of moderate and liberal Republicans, with the nomination of Barry Goldwater in 1964. The cleansing process picked up rapidly in the 1980s and 1990s, with numerous watershed moments, such as the arrival of Newt Gingrich and the politics of destruction. As testimony to Republicans' new approach to governing, many will recall that the Party was able to keep Whitewater in public view, with the help of a stupidly compliant press, for literally years on end, only to have the process finally wind down having demonstrated no presidential malfeasance.

From the judicial standpoint, it was a waste of time and taxpayers' money. But upholding the law had nothing to do with it. The objective was to vilify a Democratic President, obstruct his agenda and ability to govern, and convince the public that conservatives stood on principles. The never-ending rush to spin the story helped feed the narrative that liberals are not to be trusted. Even today people will refer to Whitewater as a scandal, forgetting that there was no wrongdoing, despite years of investigation. It was only a scandal because the Republican hierarchy kept claiming it was. And many will be surprised when reminded that the 12 years of Reagan and Bush saw a dramatically greater number of actual convictions, not accusations, than in the eight years of Clinton. If the reality goes against what you had heard and "just assumed," it is because Republicans worked hard to make it so, for they have shown a superior ability to get their ideas into the media and into people's heads. They dominate most narratives because they understand how to make their messages simple and emotional. What sounds implausible or even ridiculous at first becomes accepted as truth if repeated enough. All propagandists understand this. This why Republicans have said for decades they, against all evidence, are the party of personal responsibility, fiscal prudence, and limited government. Voters who don't study the facts have come to accept this narrative.

And now we see Republican spin taken to new heights, creating a parallel world of logic and reason. They have managed what should have been impossible in a sane world of evidence, facts, and reason; divert enough of the electorate's, and the media's, attention away from the Wall Street banks and turn the middle class against itself. Significant numbers of Americans now think that public workers earn too much, are lazy and irresponsible, and are a drain on our fragile economy.Too many show an infantile understanding of economics by buying into Republican rhetoric that teachers' salaries are too high, so we must rein in those destructive teachers' unions. "Never mind that stuff you hear about Wall Street. Those guys deserve every penny they got, and besides, look at all the jobs they create."

The truly reprehensible thing about Mitt Romney is that he personally promotes these ideas and never once has acknowledged that the Bush tax cuts, which he wants to deepen, have been a prime contributor to the federal deficit. Everything the man says indicates he will be for the one percent and will penalize the working class, and yet he is running as a viable candidate.

And as we just saw in Wisconsin, there are plenty of voters who are fine with Scott Walker's effort to strip away the hard-fought gains by teachers and other public workers. Many now instinctively believe that there is such a thing in America as "big labor," and that cutting back salaries and benefits of teachers, librarians, firefighters, cops, and others, will somehow drive the economy forward, that and more tax cuts for the wealthy. Republicans have apparently convinced more than a few that teachers are now fat cats. The Wall Street bankers that drove the economy into recession have almost entirely avoided legal scrutiny. Forgotten is their unforgivable act of paying mammoth executive compensation with the very tax dollars meant to stabilize the catastrophic mess they created. No accountability, no significant judicial proceedings, and the few penalties levied have been easily paid and treated as nothing more than the cost of doing business.

The banks got away with it while attention has been diverted to where Republicans want it. They, including Mitt Romney himself, have convinced many that pushing back against the oligarchy is class warfare, but endless bitching about teachers and other members of the middle class, with an eye to stripping their rights and reducing their pay, is productive policy. And they have roughly half of that middle class believing it.

That is quite an accomplishment.

Low Wages are Crippling Us

Since posting on the problem of suppressed wages on April 25, I've noticed others have posted on the subject and the problems the US* has created for itself by squeezing the incomes of the middle and working class. Nice to know they got my memo. The paste-up below is from Morgan Housel at Motley Fool. Nice write up, Morgan.

Nearly every recent survey asking Americans about their most pressing concern points to the same answer: a job. People are upset about taxes, politics, deficits, and wars, but until you can clock in five days a week and get a paycheck every other Friday, almost nothing else matters.

The good news: Jobs are starting to come back. About 3.3 million more Americans are working today than were just two years ago. That's great from a social perspective. People are going back to work and regaining dignity. Let's hope it lasts. 

But even if it does, it might not be enough to fuel a strong recovery. What drives the economy isn't necessarily jobs -- it's people's ability to save and spend money. And even though jobs are coming back, average weekly hours and wages, by and large, are not. More people have jobs than did a year or two ago, but we're working fewer hours, for barely more money, than before the recession began.

The average private-sector employee worked 34.3 hours per week this year, according to the Bureau of Labor Statistics. Five years ago, the average workweek was 34.7 hours long. That might sound like a small difference, but it adds up fast. Working more hours means bigger paychecks, which means more saving and spending, which drives economic growth -- just like adding new jobs would. According to UBS economist Sam Coffin, every one-tenth of an hour increase in an average private-sector workweek is the equivalent of adding 320,000 jobs. So if employees were working the same number of hours today as they were five years ago, the increase in spending would be like having an additional 1.3 million people employed -- enough to push the unemployment rate well under 8%. 

Then there are wages. From the end of World War II through the late 1990s, average real (after inflation) hourly earnings increased 1.8% a year, and growth coming out of recessions was usually stronger than that. Not this time. Average real hourly earnings have been essentially flat over the last several years. If wage growth followed its historic growth rate from 2009 through today, the average worker would be earning almost $1 an hour more than they are now. The additional spending that would generate is the equivalent of some 2 million new jobs in today's economy. 

All of this underlines something important about today's jobs market: A disproportionate number of jobs being created are for low-wage, part-time work. According to a recent Bloomberg Briefing, 41% of jobs created since 2010 are from "low-wage" sectors like retail and hospitality, even though such sectors only make up 29% of the total labor force. When government job losses are factored in, 70% of all job gains in the last six months came from low-wage sectors. In March, the notoriously low-wage restaurant and food-service industry added 37,000 of the 120,000 total jobs created for the month. "Administrative and waste services" made up another 15,000 of the total (though month-to-month figures can be murky). 

Measured by the number of jobs alone, our employment recovery has been extraordinarily weak. But, when you factor in the quality and pay of the jobs that are bouncing back, it's been downright abysmal. When it comes to spending and stimulating the economy, creating 3.3 million new jobs today might be the equivalent of several hundred thousand jobs in years past. That's a dark thought when thinking about our future.....

*Actually, it can be problematic to use "country" or "nation" as the unit of analysis; the United States is an abstract concept.The decision to promote policies that benefit the rich is not done by a country, or even a government, but by certain specific individuals within the government and others who support them. Using expressions such as "the US believes" or "the American people demand" are clumsy but often effective simplifications. People who conflate the two parties and claim that "politicians" got us in this mess have a perverse devotion to symmetry and are intellectually lazy.   

Romney Loved His Bailout

Mitt Romney wants to tell us he is just loaded with business experience, just the kind needed to run the country, 'cause don't you know, representing the diverse interests of the American people is incredibly similar to being chief vulture at Bain Capital. Only his huge ideological blind spot has kept him from realizing that the plunder and pillage known as private equity is not exactly endearing him to voters.

And about that one term as governor of Massachusetts? He has been running from that too. He wouldn't be if he were going after moderates or independents, but these are Republican primaries, so he wants the Republican base, the right wing of the right wing party, to forget what he said and did as governor, such as signing the Massachusetts health care insurance reform law, which provided near universal health care for citizens of that state.
 
Now there is one more item, one that I expected to come up sooner; his role as chief executive of the 2002 Winter Olympics Organizing Committee. Frankly I expected Romney to toot his horn a bit more on this. Isn't it a feather in his cap? More evidence of his organizational and leadership skills?

Maybe not, though I am not sure Romney is sufficiently self-aware to realize the ideological impasse any Republican would face once it was realized just how Romney financed the 2002 Winter Olympics in Salt Lake City.

As the video below reveals, the 2002 Winter Olympics were not only frightfully expensive, much of the money came from taxpayers. And for me, the issue is not, in and of itself, that tax dollars were spent, though the amount, and what it bought certainly matter. The essential hypocrisy of Mitt Romney is his claim that the private sector does most everything better, that he has the requisite private sector chops--and rugged free market individualism to go with it-- and his increasing strident rant against the legitimacy of government. We must get government out of the way, he says, for this will unleash the private sector. 

Recall the 1984 games in Los Angeles, where the private sector played a major role, and the credit that was given to Peter Ueberroth for his ability to raise money from private donors. Instead, Romney lobbied the federal government, one then largely controlled by Republicans, for huge amounts of cash--from taxpayers-- to foot what proved to be a record-breaking tab. He gleefully boasts of it in the video, even while he chides others when they rely on government.

There is only thing Romney perhaps can boast, as he does in the video, and that is his lobbying skills at getting the federal government to give him huge amounts of money. He showed you can get a lot of things done if you can talk friends in Washington to pay for it. The Salt Lake City games were a success, but Romney is now reluctant to acknowledge that it was because the federal government bailed him out to the tune of $1.3 billion.

Super Bowl Socialism

On this day, Super Bowl Sunday, we will once again witness the gawdy mixture of sports, excess, patriotism, and military pride. The US military and the National Football League are two institutions in America that are deeply socialist in their structure: They are successful for that reason.

Take the US military: Everyone from a fresh recruit to the Joint Chiefs of Staff is on the public payroll; housing, food, travel benefits, a retirement plan. And they all have a government-provided and regulated health care I suspect few are willing to abandon for the capriciousness of the profits-first private sector. Moreover, the military is chock-a -block with regulations, rules, requirements, and a thick code of behavior.

It is worth noting that the US military is a dominating force in the world because the US government wanted it to be, not because the markets made it happen. Military preeminence is this nation's industrial policy and power, complete with the world's most sophisticated weapons. Our defense industry is number one because our government put resources into it and fostered private sector support. 

At the same time, most observers will happily tell you the US military is full of courageous, dedicated, devoted, proud, and hypercompetitive men and women. All this and modest pay as well.

This is a combination that free market advocates say cannot exist. Any institution so encumbered will surely stifle innovation, resourcefulness, and personal responsibility.

We see a similar result with professional sports. The NFL, for example, exemplifies bounded competition: a highly circumscribed set of rules and regulations which define and control every aspect of the game. That set of rules and regs is exactly why the game works; they are designed to enhance competition because they do not allow a richer or better situated team to dominate the game. And they minimize cheating, which bothers Americans more in sports than it does in Wall Street and government. Players, union members all, compete fiercely within the confines of the rules, and abide by a thick rulebook that regulates every aspect of play.

Again this contradicts the free market doctrine that insists regulations are inherently burdensome and constrict creativity, competition, and glorious individualism. With no sense of irony, sports fans glibly cheer on their favorite franchises that make clear they win through team effort and pound out selfishness, arrogance, and self-centered individualists more concerned about their stats and their image. There is no I in team, as they say. And no, it is not because of high pay; the pattern fits all sports, including high school, college, and amateur players with no real prospects for riches.
    
I see that Bill Maher got my memo. In the video below Maher also notes the socialist structure of the NFL, what he calls the irritable bowl syndrome  He does stress different points, however. Watch it and note how the socialized structure of the NFL provides such different results than does major league baseball.

American Tax Dodgers

On January 12, I posted some comments about Les Leopold's recent article on tricks the corporate use to hoard wealth. I referred to economic productivity and how the gains are no longer being shared with the middle class.

He also highlighted how large corporations, despite the endless bleating about high corporate taxes, often pay little or no taxes. Specifically he noted how low state and local corporate taxes have become. As Leopold says:

Large corporations pay next to nothing in state and local taxes. As a result of the Wall Street-created crash, state and local governments are struggling to make up for lost revenues and rising costs to care for the jobless and the destitute. In a fair society we would be asking Wall Street to pay for the damage it created. Instead, Wall Street has used its enormous lobbying muscle to make sure politicians are asking states to cut back public services of all kinds. Meanwhile, large corporations use every trick in the book to avoid paying state and local taxes. A recent joint report by the Institute on Taxation and Economic Policy and Citizens for Tax Justice reveals that 265 large corporations avoided $42.7 billion in taxes from 2008 to 2010. That’s enough money to hire more than one million teachers! Instead, we are firing teachers in the name of fiscal austerity.

 The full report to which Leopold refers is at The Institute for Taxation and Economic Policy.  The reports should make clear that whatever other problems ail the US, overtaxed corporations isn't one of them. Citizens for Tax Justice also offers a compendium of how America's most profitable companies pay taxes dramatically lower than the advertised rate; for many, the US tax code has become a profit center, one more way to privatize benefits and socialize costs.


The idea, which every Republican presidential candidate has made at one time or another, that America's high corporate tax rate of 35% is killing the economy should be put to rest by a simple observation at the next debate followed up by a blunt question: 

"You do realize that corporate profits have grown enormously, along with executive compensation?" 


"Are you so naive that you actually believe corporations pay a 35% tax rate?" 

It really is no different at the state level. They game the system at the federal level and at the state level. A more detailed analysis of how corporations avoid taxes while they capture subsidies and other benefits paid by taxpayers, in particular how they play one state or municipality off against another, can be found in Greg LeRoy's well-researched book: The Great American Job Scam: Corporate Tax Dodging and the Myth of Job Creation.

Media and Government are Both Failing Us

Here is Cenk Uygur relating recent discoveries that members of congress provided inside information to hedge fund managers. There hasn't been much media coverage on this. Cenk notes that the story originally appeared in the Wall Street Journal, which one would think would have been enough to trigger follow-up stories, you know, the ones on the front page of every newspaper saying criminal investigations are under way.

Didn't happen. And that is the other story: media complacency. Even though the story has been broken, few have followed up and tried to learn more. How many people really learned of this story? Can there be a more blatant example of the corruption of our government? And has our media reached a point where this no longer seems to be especially newsworthy?



Cenk treats this as a breaking story, and it should be, but in reality it is another incremental move to complete oligarchy. The more it happens, the less people pay attention. Apparently not enough people, regardless of motivation, seem to think the story should be vigorously pursued.

David Sirota has a excellent analysis on why no one is investigating Wall Street, not specifically the insider trading info given to the hedgies, but the widely documented criminal behavior of the big banks.

When it comes to our government’s collective refusal to aggressively investigate — much less prosecute — Wall Street crime, one prevailing line of apologism implies that it’s all about resources. As the general fable goes, Wall Street is so sprawling and so lawyered up that public law enforcement agencies simply don’t have the resources to make sure justice is served, especially at a time of budget deficits. In this story, Wall Street is not simply too big to fail; it’s too big to even police.

Right, David; there are reasons why congress has underfunded watchdog agencies like the SEC, and it isn't because it cares about the budget deficits. And it is worth noting that the media did in fact cover the banker-induced recession reasonably well, at least for those of us who sought out appropriate media sources. Not hard to do, by the way if you have an Internet connection. Sirota's dismay is that Washington knew full well what had happened, in time we all knew, but that there is still almost no government action to hold the criminal class criminally liable.  Instead politicians direct their venom at the poor.

Tracking an individual example of this phenomenon, Matt Taibbi makes clear that it’s really difficult to overstate just how revealing this kind of thing is. Wall Street crooks who stole trillions of dollars are rewarded by the administration with additional trillions in bailouts. Meanwhile, those crooks’ now-impoverished victims — so poor they are on food stamps, mind you — are being targeted by the same administration for criminal investigation for allegedly making a few extra bucks on recycling empty bottles.

Our government is directing prosecutorial resources at food stamp recipients because they may have earned a few extra dollars from recycling bottles. Poor people are sent to jail while the wealthy pay fines and sign documents that allow for no admission of wrong-doing.

We could endlessly debate the extent to which President Obama or Democrats in congress contribute to Wall Street's special privileges. It should be clear to all that Republicans are the party of America's wealthiest. Never in recent history has a party so shamelessly shilled for the 1% while demonizing, ridiculing, and haranguing the poor and powerless. It is Republicans, it must be remembered, who continue to claim that unqualified home borrowers of modest means were to blame for derailing the economy.

Others will argue, incorrectly in my view, that there is no real difference between the two parties. These are cynical conclusions held by the intellectually lazy. Having said that, there is not as much difference between the two parties as I would like, or as much as there used to be. More than a few Democrats have shown a contemptible willingness to do the bidding of the investor class.

How They Really Feel

This man's comments speaks volumes on the attitudes of the wealthy. His disdain for those with less money is palpable. He clearly is equating people's value with the size of their portfolio. Rich people are better.



And it is not just an arrogant attitude; he is also egregiously wrong,his intellectual honesty clearly compromised by his ideology. Notice that he claims to be subsidizing the 99% because he is making big bucks. It is especially ridiculous in light of the massive amounts of money our government has directed at the 1%, and especially the 0.1%, who operate under a self-serving delusion that everything they have is because of skill and hard work. Overlooked by this dickhead are the endless flows of government contracts and concessions to big Pharma, defense contractors and the like. Overlooked are the multi-million dollar giveaways by state and municipal governments as they compete to entice corporations to locate in their areas.

Richie Rich also ignores huge sums given to banks as part of their bailout, money bank executives then used to pay outsized bonuses. And just this week we read that those banks earned roughly $13 billion in interest directly the result of the sweetheart deal they received for tanking the US economy. Here is the gist of it, as related by AllGov:

Thanks to the Federal Reserve’s generous lending during the 2007-2009 financial crisis, banks that were teetering and at risk of collapsing wound up making billions of dollars in profits, according to Bloomberg Markets magazine.

After combing through 29,000 pages of Fed documents released to Bloomberg by court order, the publication determined that banks earned about $13 billion in income by taking advantage of the Fed’s below-market rates. These loans were made without informing the public or Congress of which institutions were borrowing heavily to stave off disaster.

Finally, have a look at the chart below. The corporations in these sectors are generally run by individuals who espouse rugged individualism, a can-do attitude, and the glories of a free market. They also almost always bitch about high taxes and government regulation. As you can see, they rarely pay their share of taxes, but they sure know how to pull in those tax subsidies- nearly $223 billion from 2008-2010.

Source: Citizens for Tax Justice

That's some serious corporate welfare. And from their government-subsidized profits, they pay outsized compensation to people like the guy in the video. If corporate boards claim that their executives deserve their often huge compensation, then those corporations don't need and don't deserve government support.  If you cannot live without taxpayers like me subsidizing your bottom line, then your insistence on fat bonuses is even more morally obscene than it already is.

Or is this a problem only when the recipients are the 99%?

The implicit message: It's just good business, complete with tax write-offs, when rich guys are in on it, and it's socialism only when the poor receive it.

Pigs Fly

Jim Cramer gets a lot of things wrong, especially his stock picks, which are running roughly the same as a chimp and a dartboard. He has generally been a cheerleader for Republicans because Wall Street can buy them so easily. But even he has had enough of the small-minded buffoons at the last Republican debate.

Our problem, as Cramer says, is "unregulated, rapacious capitalism."

Signs Our Health Care System is Broken

Here are a few signs we have a shitty health care system. Read them and consider why citizens in other industrialized countries have no desire to adopt our system.

1. Spam e-mail for Canadian drugs. We are all besieged with email offering low-cost pharmaceuticals from the land of Molson. Ever thought why? Many reasons, one of which is that our own government has guaranteed profits for the domestic drug industry. The Bush administration made it illegal for medicare to negotiate for discounts, or to obtain cheaper Canadian or other foreign-made drugs. (Just another Bush travesty Obama has embraced).

So now we get a steady stream of offers, of questionable legality, from abroad because they know we are getting ripped off.

2. Fundraisers to pay medical bills. This time it is grandpa's hip; next time it will be your co-worker'sw emphysema. Please give what you can. For millions of Americans getting sick without insurance puts a life at risk and a family ever closer to bankruptcy. This shit happens because our health care system lets it happen. Yeah, yeah, I know; much of this is supposed to end with health care reform. We'll see.

3. Medical tourism. Yet another growing industry, as Americans desperately seek medical care, even of questionable quality, because of prohibitive US prices. High quality care in industrialized nations is often cheaper, even after airfare and hotels, than the domestic stuff.

A hat tip to Southern Beale. See her post here for a more extensive purview. She is absolutely correct when she says: "Too many people are getting far too rich off of our current system. American healthcare no longer serves the majority of its customers. Which is precisely why nothing will change without a huge fight."

Yup, health care is a profit center in America. It does not serve citizens very well, but it enriches the health care industry, the investor class, and politicians willing to obstruct real reform.

And that is why we are unable to change it.

Deficits, Health Care, and Willful Ignorance

Paul Krugman recently published an article in the New York Times in which he bemoans the inane level of discourse on the budget deficit as well as our out of control health care system.

Krugman writes,

According to a column in Kaiser Health News, Republican staffers jeered at any and all proposals to use Medicare and Medicaid funds better. Spending money on prevention was no more than a 'slush fund.' Research on innovation was 'an oxymoron.' And there was no reason to pay for "so-called effectiveness research."

Damn; Republicans are no longer even trying. They say nothing, offer nothing, that even pretends to be serious.

But today’s Republicans just aren’t into rationality. They claim to care deeply about deficits — but they’ve spent the past two years putting cynical, demagogic attacks on any attempt to actually deal with long-run deficits at the heart of their campaign strategy.

Here’s a recent example. In his new book, Mike Huckabee — the current leader in polls asking Republicans whom they want to nominate in 2012 — attacks the Obama stimulus because it included funds for, yes, comparative effectiveness research: “The stimulus didn’t just waste your money; it planted the seeds from which the poisonous tree of death panels will grow.” Will others in the G.O.P. stand up and say that Mr. Huckabee is wrong, that Medicare needs to know which medical procedures actually work? Don’t hold your breath.

Note the reference to comparative effectiveness research. That means we spend a little to look closer at what other countries are doing, the ones that offer care that is better, universal, and less expensive. But this is what Mike Huckabee ridicules.

Really, Mike? Do your really want Americans to remain uninformed and not know just how dysfunctional our health care really is? Most analyses of health care that make it to our mainstream media are incredibly vapid. In particular, they almost never explore in any depth why universal health care in other countries works well, contains costs, and is so popular. Ask yourself why the public in Europe, Canada, or Japan does not demand their governments adopt the US system. 

I have embedded a PDF below that offers a comparative analysis of the US health care system and those of several other industrialized nations. This is just one of several. The others I will post in due time.



1400_Davis_Mirror_Mirror_on_the_wall_2010


I hope this link and embedded PDF stuff works OK. I am using docstoc.com for this. Seems to be working, hope it stays working. Readers can let me know if the above PDF does not work. Note the text is a bit small, but you can click to open to full screen.

Alternatively, you can click here to view via Google docs.

Willful Ignorance

Mike the Mad Biologist has an interesting post up at his blog. He is incredulous, as am I, at the number of Americans who have utilized government programs, but did not do not realize what they used was in fact, from the government.

I have reproduced the chart to which he refers. It is a little small; you may have better luck reading it at his site, which I linked above. Note that the original study is from Reconstituting the Submerged State: The Challenges of Social Policy Reform in the Obama Era (2009), which can be downloaded here (PDF). It is an academic study, so teabaggers won't read it, and Sarah Palin can't.

As Mad Mike observes: "Anyone who follows politics regularly is aware of the phenomenon of the voter who 'wants the government to stay out of my Medicare' (Medicare is a government program). But a huge fraction of recipients of government aid do not believe they have received government aid."

While the data are subject to different interpretations, I think Mike is spot-on when he says:

 

"This seems a case of willful ignorance by definition. Government aid is for lazy slackers, for 'welfare queens', and, in some people's minds, for those people. Decent, hard-working people don't receive government aid, even when they do. In other words, any program that helps middle-class people, people like themselves, is, by definition, not aid, because government aid is inherently pejorative."

 

Pervasive and willful ignorance of government's role is the legacy of Ronald Reagan, who assured us repeatedly that government was our biggest problem.  Republicans have continued to frame the debate over government's role, while Democrats have responded ineffectively. A generation of fantastically ill-informed voters is the result.