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Public Alert: What If We’re Not Broke?

“We’re broke.”

You can practically break a search engine if you start looking around the Internet for those words. They’re used repeatedly with reference to our local, state and federal governments, almost always to make a case for slashing programs – and, lately, to go after public-employee unions. The phrase is designed to create a sense of crisis that justifies rapid and radical actions before citizens have a chance to debate the consequences.

Just one problem: We’re not broke. Yes, nearly all levels of government face fiscal problems because of the economic downturn. But there is no crisis. There are many different paths open to fixing public budgets. And we will come up with wiser and more sustainable solutions if we approach fiscal problems calmly, realizing that we’re still a very rich country and that the wealthiest among us are doing exceptionally well.

Consider two of the most prominent we’re-brokers, House Speaker John Boehner and Wisconsin Gov. Scott Walker.

“We’re broke, broke going on bankrupt,” Boehner said in a Feb. 28 Nashville speech. For Boehner, this “fact” justifies the $61 billion in domestic spending cuts House Republicans passed (cuts that would have a negligible impact on the long-term deficit). Boehner’s GOP colleagues want reductions in Head Start, student loans and scores of other programs voters like, and the only way to sell them is to cry catastrophe.

Walker, of course, used the “we’re broke” rationale to justify his attack on public-worker collective bargaining rights. Yet the state’s supposedly “broke” status did not stop him from approving tax cuts before he began his war on unions and proposed all manner of budget cuts, including deep reductions in aid to public schools.

In both cases, the fiscal issues are just an excuse for ideologically driven policies to lower taxes on well-off people and business while reducing government programs. Yet only occasionally do journalists step back to ask: Are these guys telling the truth?

The admirable Web site PolitiFact.com examined Walker’s claim in detail and concluded flatly it was “false.”

“Experts agree the state faces financial challenges in the form of deficits,” PolitiFact wrote. “But they also agree the state isn’t broke. Employees and bills are being paid. Services are continuing to be performed. Revenue continues to roll in. A variety of tools – taxes, layoffs, spending cuts, debt shifting – is available to make ends meet. Walker has promised not to increase taxes. That takes one tool off the table.”

And that’s the whole point.

Bloomberg News looked at Boehner’s statement and declared simply: “It’s wrong.” As Bloomberg’s David J. Lynch wrote: “The U.S. today is able to borrow at historically low interest rates, paying 0.68 percent on a two-year note that it had to offer at 5.1 percent before the financial crisis began in 2007. Financial products that pay off if Uncle Sam defaults aren’t attracting unusual investor demand. And tax revenue as a percentage of the economy is at a 60-year low, meaning if the government needs to raise cash and can summon the political will, it could do so.”

Precisely. A phony metaphor is being used to hijack the nation’s political conversation and skew public policies to benefit better-off Americans and hurt most others.

We have an 8.9 percent unemployment rate, yet further measures to spur job creation are off the table. We’re broke, you see. We have a $15 trillion economy, yet we pretend to be an impoverished nation with no room for public investments in our future or efforts to ease the pain of a deep recession on those Americans who didn’t profit from it or cause it in the first place.

As Sen. Al Franken (D-Minn.) pointed out in a little-noticed but powerful speech on the economy in December, “during the past 20 years, 56 percent of all income growth went to the top 1 percent of households. Even more unbelievably, a third of all income growth went to just the top one-tenth of 1 percent.” Some people are definitely not broke, yet we can’t even think about raising their taxes.

By contrast, Franken noted that “when you adjust for inflation, the median household income actually declined over the last decade.” Many of those folks are going broke, yet because “we’re broke,” we’re told we can’t possibly help them.

Give Boehner, Walker and their allies full credit for diverting our attention with an arresting metaphor. The rest of us are dupes if we fall for it.

By: E. J. Dionne, Op-Ed Columnist, The Washington Post, March 14, 2011

March 14, 2011 Posted by | Budget, Deficits, Economy, Federal Budget, Ideologues, Politics, States | , , , , , , , , , , , | Leave a comment

Union Battleground Shifts From Wisconsin to Ohio—and Ballot Box

The movement has been set back for now, but the standoff in Madison captured labor’s political imagination. Although the Republicans have cynically used the “nuclear option” to ram through the anti-union bill, the battleground will now just shift to other states.

Ohio lawmakers are mulling a bill similar to Wisconsin’s, which would restrain the collective bargaining rights of some 360,000 state and local employees.

Ohio does not need as many votes for a quorum. This means Democrats cannot hold up the voting process by going AWOL, as they did in Wisconsin and are still doing in Indiana (where unions are fighting proposals to further erode union rights and public education). But in Ohio’s case, Madison-style people power could be deployed in a more concrete way, according to some lawmakers. House minority leader Armond Budish told Bloomberg News that even if the bill initially passes, he and other Democrats will mobilize citizens to thwart the legislation through other channels, through public pressure and perhaps ultimately, the ballot box:

Too few to block Republicans from having a quorum, Ohio Democrats are asking for more public involvement and hearings on the bill in an effort to sway opinion and will seek a ballot issue to repeal it if necessary, Budish said.

“If I have to take the lead on a statewide referendum, we will fight until we win,” Budish, the House minority leader, said in a telephone interview from Columbus….

With Republicans holding a 59-to-40 seat advantage in the House, Democrats should focus on a repeal referendum, said Representative Robert Hagan, a Democrat from Youngstown.

“What we’re doing now is performing a charade,” Hagan said in an interview. “They should get it over with, and we should put this on the ballot as soon as possible.”

With passage in the House all but certain, Ohio could now overtake Wisconsin as a bellwether for the struggle. After the fireworks in Madison, labor activists recognize that the partisan gridlock over collective bargaining rights is merely a proxy battle for a new kind of class antagonism that has emerged from the Great Recession.

Ohio’s referendum process offers a form of direct democracy that Wisconsin Republicans stridently denied to protesters by ignoring, vilifying and shutting out demonstrators at the capitol.

Bloomberg reports that voters can launch a ballot initiative..

if petition forms with more than 231,000 voters’ signatures are filed within 90 days of the law’s approval, according to the secretary of state’s office. The number of signatures is 6 percent of the total vote cast for governor last year.

Gathering that many petitions in three months is no small feat, though the required number of signatures equals just under two-thirds of the number of workers potentially impacted by the bill. More importantly, the spirit of protest across the Midwest has truly gone viral, inspiring parallel demonstrations in Indiana, Ohio and other states, and cheers across the Twitterverse, pizza from Haiti, and picketing from Cairo. And on top of potential court challenges, there are rising calls for a general strike to paralyze Gov. Walker’s administration. In the wake of that outpouring of solidarity, a conventional referendum seems almost too easy.

In many ways, it is. Which is why the temporary defeat in Wisconsin should have a more enduring influence on the campaign to protect union rights than any other tactic. The battle for labor’s integrity won’t be won or lost on the political chessboard of a state legislature.

As activists regroup and take stock of what they’ve gained these past few weeks, they can still claim one victory: they never gave an inch. And by standing their ground, they gave workers across the country the momentum to push ahead to November and beyond.

By: Michelle Chen, In These Times, March 11, 2011

March 13, 2011 Posted by | Class Warfare, Collective Bargaining, Democracy, Economy, Governors, Ideologues, Jobs, Middle Class, State Legislatures, States, Unions | , , , , , , , , , , , , | Leave a comment

Wisconsin Gov. Scott Walker, Tea Party Are Faces Of GOP Overreach

Congratulations to whoever had “less than two months” in the “conservative overreach” betting pool. There was never a question about whether the Republican Party, awarded huge political gains last year by voters, would let ideology outstrip political reality. The issue was when. And the new faces of conservative overreach have been preening recently.

Here is Wisconsin Gov. Scott Walker, who sparked an old-fashioned national labor controversy by trying to break his state’s public unions. His assertion that he’s merely trying to achieve fiscal responsibility is belied by the fact that while rolling back government workers’ collective bargaining rights itself saves no money, the tax cut he pushed through upon taking office costs an amount strikingly similar to this year’s budget gap; and the fact that when the unions offered to accede to his budget demands in exchange for keeping their bargaining rights, the governor wouldn’t accept that “yes” for an answer.

Indeed, while he has tried to imbue his power grab with the voters’ imprimatur by claiming that union-busting was part of his campaign agenda (it was not), Walker, speaking with a liberal blogger pretending to be billionaire supporter David Koch, described the actual unveiling of the policy as akin to dropping a “bomb.” In that same call, he added a phrase to the lexicon of overreach. “This is our moment,” he told faux-Koch, “this is our time to change the course of history.”

Away from Wisconsin, members of the Tea Party Patriots, meeting in Phoenix recently, gave that sentiment more guttural voice. When Texas GOP Rep. Joe Barton tried to brag that the $61 billion in spending cuts the House recently passed were the “largest . . . in the history of America,” they booed him, shouting “More, more!” One Tea Partyer told the Associated Press that she and her fellow activists were displeased with the House GOP for failing to follow through on their campaign pledge to slice $100 billion from government outlays this year: “Have we seen that? No. But we’ve heard excuses.” Another warned, “If they don’t [live up to their promises], we’re going to pull up another candidate to run against them.” Why shouldn’t they? This is their moment.

That even the conservative House Republicans are unable to conjure more than $61 billion shows both the hollowness of their $100 billion campaign pledge and the governing corner into which they have painted themselves. And, the Tea Party activists will no doubt be pained to learn, negotiations with the White House and Senate Democrats won’t get them any closer.

Not for lack of trying, to be sure. Congressional Republicans have demonstrated an unstinting commitment to an economic philosophy that can best be described as cutting for cutting’s sake. It’s certainly not for the sake of fiscal responsibility. The same party that brought you the Reagan budget deficits and Bush budget deficits certainly speaks the language of fiscal responsibility. But Republicans concern themselves only with the spending side of the ledger, perhaps forgetting that deficits come not from spending in isolation but when spending and revenue are out of balance.

So they piously speak of dealing with the deficit with their $61 billion in proposed cuts (or even the $100 billion Tea Party standard) while trying to repeal President Obama’s healthcare reform law, a move that would add more than $200 billion to the deficit over 10 years, according to the Congressional Budget Office. And all of those numbers are dwarfed by the $4 trillion hole they would blow over 10 years if they successfully managed to make the Bush tax cuts permanent.

And they’re not focused, campaign rhetoric aside, on jobs. A recent Goldman Sachs report estimated that the $61 billion in spending cuts that the House GOP passed would reduce economic growth by 1.5 to 2 percentage points. This would not help spur job growth. Moody’s analyst Mark Zandi (who has advised both parties) weighed in last week with an estimate that the Republican spending cuts “would mean some 400,000 fewer jobs created by the end of 2011 and 700,000 fewer jobs by the end of 2012.” And last Wednesday, Federal Reserve Chairman Ben Bernanke put that number at “a couple of hundred thousand jobs,” adding, “It’s not trivial.”

In other words, the Republicans’ spending cuts legislation is the very definition of, to borrow their phrase, a job-killing bill. And the Tea Party gang doesn’t think it goes far enough. Is the GOP really willing to sacrifice economic growth at the altar of their cutting obsession? Indiana Gov. Mitch Daniels, the George W. Bush budget director-turned-spending hawk, was asked on NPR whether budget cuts are worth it if they cost a lot of jobs. “The answer is yes,” he said.

This view bespeaks the kind of market fundamentalism the Tea Party GOP has embraced. It involves a blind faith in the free market: cut taxes, gut regulations, cut spending, gut labor unions. The market is always right. And if that means the loss of a few hundred thousand jobs, then, in the instantly immortal words of House Speaker John Boehner, “So be it.”

But the GOP has gotten so lost in its own philosophy that they have made the mistake of believing their own rhetoric about the United States being ideologically conservative. It is surely true that the electorate prefers a government that is in some senses limited; but so too do they want the free market limited, its rough edges softened.

It may be, in Governor Walker’s words, their moment. But overreaching conservatives will learn that the more tightly they embrace it, the more quickly it will pass. In self-consciously trying to change history, they will become it.

By: Robert Schlesinger, U.S. News and World Report, March 11, 2011

March 13, 2011 Posted by | Class Warfare, Collective Bargaining, Deficits, Economy, Ideologues, Income Gap, Jobs, Middle Class, Politics, Teaparty, Unions | , , , , , , , | Leave a comment

Wisconsin Gov. Scott Walker Shows Why Ideologues Can’t Govern

Ideologues make lousy politicians, even worse office holders. The ideological straight jacket does just what you would expect–it constricts movement. Everything is nice and neat and tight but not conducive to serious efforts to move forward. Politicians such as Scott Walker, who put themselves in ideological straight jackets, either live to regret it or are thrown out on their ear, or both.

Intellectuals sometimes make good ideologues, cultural commentators make very thought provoking arguments, philosophers have the luxury of being way out on the edge at times, but those who go into office find that they are rejected very quickly by the public when all they have is their ideology.

Scott Walker is the latest example of an ideologue–combined with a self righteous, bullying approach, not backed up by intellectual rigor.

My guess is that the events of the last month will not only harm him politically in the short run but will result in a serious problem for those who follow in his footsteps.

First and foremost, his approach to governing won’t work. Cutting taxes for ideological reasons, rather than pragmatic ones, prohibiting local governments from paying for education with their own decisions on local taxes, cutting services to the bone, breaking collective bargaining with unions, making them a scapegoat, just won’t wash.

Look at the governors who are putting forth a balanced, reasonable approach to focusing on the dual realities of too much spending and too little revenue. They are not engaging in a hard and fast ideological battle. They are pragmatic. They do not focus only on slash and burn cuts but, rather, are flexible enough to include tax and fee increases.

What was Walker thinking, cutting taxes by $117.2 million as his first act when his state faced a deficit of $137 million? I guess I get the million dollars he included to encourage businesses to move to Wisconsin but I sure as heck don’t understand a $49 million tax cut for health savings accounts. The rich will take advantage of that boondoggle and it won’t create jobs.

That was ideology, not pragmatism.

Look at Gov. Jerry Brown in California, or Mark Dayton in Minnesota, or John Kitzhaber of Oregon, John Lynch of New Hampshire, Pat Quinn in Illinois, or Andrew Cuomo in New York. These are governors, many of whom have a lot tougher problem than Wisconsin, who are struggling and succeeding, not resorting to hard ideology, not refusing to look at the revenue side of the equation.

If members of Congress take lessons from the states, they should learn a whopper from Wisconsin. Don’t follow in Walker’s footsteps, look to the governors listed above.

In fact, they can even look to Ronald Reagan who as governor way back in 1967 raised taxes by $1 billion in California as well as cut the budget. As president, he raised taxes in every year but one, when it was necessary. He learned very quickly about “never saying never.” He didn’t put himself in the ideological straight jacket that many now fantasize about. I am not a Reagan fan, but I do recognize he was pragmatic.

Walker is in way over his head. Sadly, he has been a train wreck for his state. Let’s not let his style and approach be a train wreck for the nation.

By: Peter Fenn, U.S. News and World Report, March 11, 2011

March 12, 2011 Posted by | Budget, Class Warfare, Deficits, Economy, Governors, Ideologues, Jobs, Middle Class, Politics, States, Unions | , , , , , , , , , , , | Leave a comment

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