“Government Is Not Just About Sugar”: The GOP Helps Americans Appreciate The Importance Of Government
There’s a lot of terrible news for Republicans inside the new NBC News/Wall Street Journal poll, but one of the worst bulletins is this: Americans are becoming more appreciative of government.
The poll shows that 52 percent of respondents said that government should do more to solve problems and help meet the needs of people. That figure is up four points since June, and is at the highest level since July of 2008, when it stood at 53 percent.
The economic crisis was building during the summer of 2008, and people were growing increasingly weary of President George W. Bush’s laissez-faire attitude. Barack Obama’s more optimistic vision of government’s possibilities became infectious and helped propel him to victory, but after he took office, the popularity of government, as measured by that question, quickly fell and has been below 50 percent for most of his presidency.
Now it is back up, and Republicans have only themselves to thank. There’s nothing better than shutting down government to remind people of how much they need it. The television footage of shuttered offices and national parks, as well as people who are suffering because of lost wages and federal assistance, has had a significant effect.
So did the 2008-2009 recession and its aftermath. More people came into the government’s orbit, seeking assistance or benefiting from stimulus money, including much of the automobile industry. The poll showed that nearly a third of respondents said their family was personally affected by the current shutdown, compared to only 18 percent during the shutdowns of 1995 and 1996. The budget crisis has even made health care reform substantially more popular than it was just a few weeks ago.
This is one of the great existential fears of the right, of course, and is one of the few things uniting the various ideological wings of the Republican Party. Mitt Romney complained about the 47 percent of Americans who were “dependent on government,” and Senator Ted Cruz recently accused Mr. Obama of trying to get Americans “addicted to the sugar” of his health care law.
But this week, Americans know that government isn’t just about sugar. It’s a necessary part of their lives, and Americans expect it to be there when the private sector lets them down, as it did during the recession and as it has done on health care for so many years. Now as the Republicans’ abysmal new approval ratings show, voters are also gaining a clearer picture of precisely who in Washington is letting them down.
By: David Firestone, Editors Blog, The New York Times, October 11, 2013
“Dealing With Default”: Let’s Hope We Don’t Find Out What Will Happen If We Hit The Debt Ceiling
So Republicans may have decided to raise the debt ceiling without conditions attached — the details still aren’t clear. Maybe that’s the end of that particular extortion tactic, but maybe not, because, at best, we’re only looking at a very short-term extension. The threat of hitting the ceiling remains, especially if the politics of the shutdown continue to go against the G.O.P.
So what are the choices if we do hit the ceiling? As you might guess, they’re all bad, so the question is which bad choice would do the least harm.
Now, the administration insists that there are no choices, that if we hit the debt limit the U.S. government will go into general default. Many people, even those sympathetic to the administration, suspect that this is simply what officials have to say at this point, that they can’t give Republicans any excuse to downplay the seriousness of what they’re doing. But suppose that it’s true. What would a general default look like?
A report last year from the Treasury Department suggested that hitting the debt ceiling would lead to a “delayed payment regime”: bills, including bills for interest due on federal debt, would be paid in the order received, as cash became available. Since the bills coming in each day would exceed cash receipts, this would mean falling further and further behind. And this could create an immediate financial crisis, because U.S. debt — heretofore considered the ultimate safe asset — would be reclassified as an asset in default, possibly forcing financial institutions to sell off their U.S. bonds and seek other forms of collateral.
That’s a scary prospect. So many people — especially, but not only, Republican-leaning economists — have suggested that the Treasury Department could instead “prioritize”: It could pay off bonds in full, so that the whole burden of the cash shortage fell on other things. And by “other things,” we largely mean Social Security, Medicare, and Medicaid, which account for the majority of federal spending other than defense and interest.
Some advocates of prioritization seem to believe that everything will be O.K. as long as we keep making our interest payments. Let me give four reasons they’re wrong.
First, the U.S. government would still be going into default, failing to meet its legal obligations to pay. You may say that things like Social Security checks aren’t the same as interest due on bonds because Congress can’t repudiate debt, but it can, if it chooses, pass a law reducing benefits. But Congress hasn’t passed such a law, and until or unless it does, Social Security benefits have the same inviolable legal status as payments to investors.
Second, prioritizing interest payments would reinforce the terrible precedent we set after the 2008 crisis, when Wall Street was bailed out but distressed workers and homeowners got little or nothing. We would, once again, be signaling that the financial industry gets special treatment because it can threaten to shut down the economy if it doesn’t.
Third, the spending cuts would create great hardship if they go on for any length of time. Think Medicare recipients turned away from hospitals because the government isn’t paying claims.
Finally, while prioritizing might avoid an immediate financial crisis, it would still have devastating economic effects. We’d be looking at an immediate spending cut roughly comparable to the plunge in housing investment after the bubble burst, a plunge that was the most important cause of the Great Recession of 2007-9. That by itself would surely be enough to push us into recession.
And it wouldn’t end there. As the U.S. economy went into recession, tax receipts would fall sharply, and the government, unable to borrow, would be forced into a second round of spending cuts, worsening the economic downturn, reducing receipts even more, and so on. So even if we avoid a Lehman Brothers-style financial meltdown, we could still be looking at a slump worse than the Great Recession.
So are there any other choices? Many legal experts think there is another option: One way or another, the president could simply choose to defy Congress and ignore the debt ceiling.
Wouldn’t this be breaking the law? Maybe, maybe not — opinions differ. But not making good on federal obligations is also breaking the law. And if House Republicans are pushing the president into a situation where he must break the law no matter what he does, why not choose the version that hurts America least?
There would, of course, be an uproar, and probably many legal challenges — although if I were a Republican, I’d worry about, in effect, filing suit to stop the government from paying seniors’ hospital bills. Still, as I said, there are no good choices here.
So what will happen if and when we hit the debt ceiling? Let’s hope we don’t find out.
By: Paul Krugman, Op-Ed Columnist, the New York Times, October 10, 2013
“Meet The New Republican Party”: GOP Leaders Recommit To Same Old Far-Right Culture War
Earlier this year, Republican National Committee Chairman Reince Priebus accepted the fact that his party’s social conservatism had alienated many young voters, women, and moderates. The party would still adhere to its platform, Priebus said in March, “but it doesn’t mean that we divide and subtract people from our party…. I don’t believe we need to act like Old Testament heretics.”
At the time, this seemed quite sensible. Understanding the Republican Party’s unpopularity is a multi-faceted dynamic, but its economic failures and extremist tactics are only part of the larger problem. The GOP’s support for a far-right culture-war agenda — anti-contraception, anti-gay, anti-reproductive rights, anti-Planned Parenthood — has taken a toll, too.
This support has manifested itself in Republicans’ legislative priorities — the House GOP has been preoccupied this year with votes on abortion and birth control — but it’s not limited to Capitol Hill.
Marriage, abortion and religious liberty are the top cultural topics to be addressed at this weekend’s Values Voter Summit.
Conservative political issues will be a major part of the presentations, but the social-cultural issues “are what define us as an organization,” said retired Lt. Gen. William G. Boykin of the Family Research Council (FRC), a main sponsor of the annual conference, which is now in its eighth year.
Right Wing Watch highlighted some of the fringe extremists who’ll play prominent roles at the right-wing conference, but the key takeaway is simple: Republican leaders will join these fringe extremists as if they’re mainstream.
Looking over the list of confirmed speakers at the Values Voter Summit, we see several sitting Republican U.S. senators (Ted Cruz, Rand Paul, Mike Lee, Tim Scott, and Marco Rubio), and many more sitting Republican U.S. House members (Michele Bachmann of Minnesota, Jim Bridenstine of Oklahoma, Louie Gohmert of Texas, Jim Jordan of Ohio, Steve Scalise of Louisiana, and Scott Turner of Texas).
The list of confirmed speakers also includes House Budget Committee Chairman Paul Ryan (R-Wis.), who was on his party’s national presidential ticket less than a year ago.
And why are these guests important? Because it’s a reminder that no matter how much damage the Republican Party’s culture war does to the GOP’s reputation, they just can’t help themselves. The religious right movement may not be the powerhouse it once was — remember when the Christian Coalition was a major force in American politics? — but it still is a significant part of the GOP base, even if it helps drive mainstream voters away.
Indeed, for Republicans eyeing national office, this has become something of a rite of passage — if you want to compete for the GOP’s presidential nomination, you’ll have to suck up to the party’s theocratic wing.
A group of longtime Christian conservative activists are holding a private meeting Thursday in Washington to hear informal presentations from two of the most talked-about potential Republican presidential candidates: Senators Ted Cruz of Texas, and Rand Paul of Kentucky.
The gathering is being held in conjunction with the Family Research Council’s Values Voters conference, an annual gathering of Christian conservatives in Washington, but it is not an official part of that event. Rather, it is being staged by a loosely-organized group of Republican leaders that call themselves “Conservatives of Faith.”
The hosts include Tony Perkins, the head of the Family Research Council, the former presidential candidate Gary Bauer, the conservative talk show host Janet Parshall and Richard Viguerie, the direct mail pioneer, along with a handful of others from the conservative movement. [Robert Fischer, a South Dakota-based conservative organizer] is the group’s chief organizer.
Meet the new Republican Party. When it comes to social conservatism, it’s entirely indistinguishable from the old Republican Party.
By: Steve Benen, The Maddow Blog, October 11, 2013
“The Engine Of American Inequality”: The Consequences Of A Free Wheeling, Unchecked Financial Industry
The past three decades have been a period of explosive growth for Wall Street and the financial industry. Meanwhile, a tiny slice of the population has claimed an ever-bigger share of this country’s economic rewards. The highest-earning one percent of Americans collected roughly 20 percent of total income last year; the top .01 percent – not enough people to fill a football stadium – had 5.5 percent of the income.
Could there be a connection here? Could our booming financial sector, which now generates an astonishing 30 percent of all corporate profits (more than double the figure of thirty years ago), help explain America’s rapid ascent to the highest level of economic inequality since the eve of the Great Depression, and the highest of any of the world’s rich nations? A growing number of economists and other authorities think the first trend may have more than a little something to do with the second.
The economic and political establishments long ago settled on a theory of rising inequality: technology and globalization, they told us, were carving a rift through the American labor force between those with and without the right kind of education and know-how. This idea was criticized from the start for ignoring a formidable corporate campaign to rewrite the rules of the U.S. economy at workers’ expense, and over time it has increasingly failed to account for the reality of who is getting ahead and who is falling behind.
In his 1991 book “The Work of Nations,” former (then future) Labor Secretary Robert Reich embraced a version of the “skills-gap” story. But in his recent film “Inequality for All,” Reich has more to say about discrepancies of power than of skill.
The longer this trend continues, in fact, the more it resembles the Occupy Movement’s picture of a soaring 1 percent and a lagging 99 percent. Out of every dollar of income growth between 1976 and 2007, the richest one percent of U.S. households collected 58 cents; and after taking a big hit in the financial crisis, they were soon back on track, capturing an extraordinary 95 percent of all the income gains between 2009 and 2012. To put it more plainly, since the beginning of the current economic “recovery,” the top 1 percent (who make upwards of $400,000 a year in household income) are pretty much the only ones who have recovered.
Within that small subset of Americans, executives, traders, fund managers and others associated with the financial sector loom large, comprising about a seventh of the one-percenters and accounting for about one fourth of their income gains over the past thirty-plus years. That’s not counting the many lawyers and consultants with financial sector clientele, or the growing number of executives of nonfinancial companies who seem to make most of their money these days through stock options and short-term financial plays. Together, corporate executives and financial sector employees account for well over half the post-1980 income growth of the top 1 percent and more than two-thirds of the even more remarkable gains of the top 0.1 percent.
Pinpointing the causes of an economic trend is a hard business. But there is global as well as historical evidence for a link between financial sector expansion and rising inequality. Studies of rich and relatively poor nations alike suggest that inequality goes up when societies tie their fortunes to a free-wheeling financial industry and the easy flow of global capital. There is also substantial research to suggest that much of the financial sector’s recent growth has come by extracting wealth from other areas of the economy, not by spurring innovation and opportunity for the society at large.
Several recent studies trace the industry’s pay-and-profit surge mostly to its success in the political and regulatory arenas. See, for example, this paper by Thomas Philippon and Ariell Reshef of New York University and the University of Virginia, who attribute between 30 and 50 percent of the financial sector’s recent gains to economic “rents.” That’s basically a polite way of describing the ability of many of today’s financial heavyweights to use their market clout, their inside knowledge and various explicit and implicit taxpayer subsidies to make money out of thin air.
Banking and finance were not always a road to fabulous riches in this country. As recently as the early 1980s – and throughout much of the 20th century – there was almost no pay differential between financial and non-financial professionals. Today, by contrast, financial workers make about 1.83 times as much as other white-collar workers. You’d have to go back to the Roaring Twenties, at the tail end of America’s original Gilded Age, to find another period when financial sector incomes and profits reached such conspicuous heights. That should tell us something.
In any case, these are pivotal questions for the country – and unavoidable questions for those seeking a path toward what President Obama has been calling a “middle-out” rather than a top-down economy. Broad prosperity, the president says, calls for greater public investment in education, infrastructure and other long-term needs, and for higher taxes on the wealthy to help pay for such things. That may be a worthy agenda. It has certainly proved to be a politically difficult agenda. But in a country that has let its financial sector become an engine of inequality, more will be required.
If we believe in our founding ideal of America as a land where children should start off on roughly the same footing regardless of history or ancestry, we will all have to screw up our courage and refocus on (among other challenges) the unfinished work of making sure we have a financial economy that serves the real economy, not the other way around.
By: Jim Lardner, U. S. News and World Report, October 11, 2013
“The Heartbreak Of Extremism”: House Republican Leaders Are Afraid To Confront Radicals In Their Ranks
Seeing our government and our creditworthiness held hostage to the demands of a right-wing minority is infuriating. It’s also heartbreaking.
It’s heartbreaking because the only thing keeping our country from being its growing, innovative and successful self is genuinely and unnecessarily stupid politics.
The United States emerged from a horrific global recession in better shape than most other countries. Our recovery was slower than it had to be because of too much budget-cutting, too soon. Nonetheless, we avoided the more extreme forms of austerity and our economy has been coming back — at least until this made-in-the-House-Republican-Caucus crisis started.
It’s heartbreaking because a nation whose triumphs have always provided inspiration to proponents of democracy around the world is instead giving the champions of authoritarian rule a chance to use our dysfunction as an argument against democracy.
Does it really make House Speaker John Boehner proud that when the International Monetary Fund and the World Bank host global economic leaders on Thursday, one of their central pieces of business will be scolding the United States for using the debt limit as a political football?
It’s heartbreaking because the reward to President Obama for pursuing broadly middle-of-the-road policies is to be accused of being an ultra-liberal or, even more preposterously, a socialist. Are our right-wing multimillionaires and billionaires who are making more money than ever so unhinged that they can cast a modest tax hike as a large step toward a Soviet-style economy?
The most revealing example of the lunacy that now rules is the very health care plan that has Republicans so up in arms that they’re willing to wreck the economy to get it repealed. The Affordable Care Act is actually based on market principles that conservatives, including Mitt Romney and the Heritage Foundation, once endorsed. Its centerpiece promotes competition among insurers and subsidizes the purchase of private insurance.
It has little in common with the British National Health Service or the Canadian single-payer model — systems that work, by the way — except for sharing with them the goal of eventually covering everyone. Yet we have a shutdown driven by the idea, as Rep. Paul Broun (R-GA) put it, that Obamacare constitutes the “greatest threat” to our economy. It should not surprise us when errant nonsense creates a nonsensical crisis.
And what’s going on is heartbreaking because this contrived emergency is distracting us from the problems we do need to solve, including rising inequality, declining mobility, under-investment in our infrastructure, a broken immigration system and inadequate approaches to educating and training our people.
Obama has finally decided he’s had enough of a politics based on “extortion” and “threats.” He has signaled that he is happy to negotiate, just not under a gun held by the most irresponsible elements of the GOP. He is exhausted, and rightly so, by the fecklessness of Boehner, who told Democrats early on that he would not shut the government down and then crumpled before a revolt by a corporal’s guard of 40 to 80 members of a 435-member House.
Now it is said by people who see themselves as realists that because he is dealing with irrational foes, Obama has to be the “adult in the room.” The definition of “adult” in this case is that he must cave a little because the other side is so bonkers that it just might upend the economy.
Giving in is exactly what Obama cannot do. The president offered Boehner a face-saving way out on Tuesday by suggesting he’d be happy to engage in broad budget talks if the government reopened and there was at least a short-term increase in the debt limit. To go any further would be to prove to the far right that its extra-constitutional extremism will pay dividends every time.
What’s required from the outside forces who want this mess to go away is unrelenting pressure on Boehner and the supposedly more reasonable Republicans who say they want to open the government and pay our debts. Up to now these Republicans have been the enablers of the Tea Party faction. They’re the ones who must become the “adults in the room” because they’re the ones who allowed all this to happen.
The Tea Party folks at least know what they believe and fight for it. The rest of the Republican Party cowers before them, lacking both conviction and courage. It would be truly heartbreaking if a once-great political party brought the country down because its leaders were so afraid of confronting unreason in their ranks.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, October 10, 2013
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