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John Boehner In GOP Fantasyland

One wonders why Congress convened its budget-reforming “supercommittee” at all; House Speaker John Boehner (R) on Thursday announced that he’d done all its members’ work for them.

At a speech to the Economic Club of Washington, Boehner articulated a hard-right line on taxes that even the most moderate of Democrats could never accept. Remove loopholes from the tax code, he argued, but “not for the purpose of bringing more money into the government.” Tax increases? Not a chance — they “are off the table,” Boehner said, repeating the dubious argument that planning to raise revenue many years down the road would hurt job creation now. If you’re looking for deficit reduction, Boehner barked, “the joint committee only has one option — spending cuts and entitlement reform.”

A new Bloomberg poll on Thursday reconfirmed voter anger at Washington’s inability to compromise — on budgets, on jobs policy, on long-term deficits. On the same day, the speaker gave a lesson by example of why it’s been so hard.

True, Boehner’s speech followed news that President Obama is scaling back the entitlement reforms he would favor in a long-term budget reform package, retreating from concessions he was willing to make over the summer to strike a debt deal. Both sides, then, are hardening their positions. But Obama’s remains politically braver than Boehner’s, since the president says he still wants to achieve some balance between raising revenue and cutting spending through reforms to Medicare, the protection of which Democrats are desperate to use as a campaign issue.

That is the key to deficit-cutting, drilled home in study after study: You can’t expect to fix America’s finances with tax increases alone or with spending cuts alone. Plans that lack this essential balance would fail either because their math doesn’t add up (the GOP’s Ryan plan) or because they would be reversed the second the other party took control of the government (the Congressional Progressive Caucus’s proposal…and the Ryan plan).

A deficit plan must also be balanced in another way — against premature budget austerity while the economy is sluggish, which Obama designed his latest jobs plan to avoid. Boehner said on Thursday there might be room for limited agreement with Obama. But not much, signalling disapproval of even the sorts of temporary tax cuts that would have been an obvious choice for Republicans for decades — until now.

Boehner might just be gearing up for further negotiations. But the speaker’s demonstration that he and his party are still in thrall to the ideological fantasies he described on Thursday aren’t going to enhance Americans’ confidence — in their leaders, or in their economic future.

 

By: Stephen Stromberg, The Washington Post, September 15, 2011

September 18, 2011 Posted by | Class Warfare, Congress, Conservatives, Deficits, Democrats, Economic Recovery, Economy, Elections, Federal Budget, GOP, Government, Ideologues, Ideology, Jobs, Lawmakers, Middle Class, Politics, President Obama, Public, Republicans, Right Wing, Tax Increases, Tax Loopholes, Taxes, Teaparty, Unemployed, Voters, Wealthy | , , , , , , | Leave a comment

Memo To Speaker Boehner: Time To Get Off “My Way Or The Highway” Hypocrisy

In a wide-ranging speech about jobs and the budget on Thursday, House Speaker John A. Boehner (R-Ohio) trumpeted the worthy goals of cleaning up the tax code and reducing long-term deficits, and he had a few promising words about how to achieve them. “If we want to create a better environment for job creation,” the speaker said, “politicians of all stripes can leave the ‘my way or the highway’ philosophy behind.”

Yet Mr. Boehner also insisted that Congress’s Joint Select Committee on Deficit Reduction has only “one option”: the Republican way.

President Obama has proposed a jobs plan, but there’s only one job the GOP wants.

Congress should remove inefficient carve-outs, credits and loopholes in the tax code, he said, but “not for the purposes of bringing more money into the government.” Tax increases “are off the table.” “Spending cuts and entitlement reform” are the only ways the joint committee can reach its $1.5 trillion deficit-reduction target.

Mr. Boehner isn’t the only one toughening his stance as the joint committee gets underway. President Obama is retreating from reforms to Social Security that he was ready to consider during the summer debt-limit negotiations. But Mr. Obama still expresses a willingness to reform Medicare, an ideological and political compromise.

Willingness on both sides is essential. Reams of expert studies have found that any deal to significantly reduce long-term deficits must achieve a balance between money-saving reforms to increasingly expensive entitlement programs and a sizable boost in federal revenue. Plans that don’t reflect this balance would fail because their math wouldn’t add up, they wouldn’t be politically durable, or both.

While planning for long-term fiscal sustainability, Congress also cannot risk enhancing economic hardship now by moving too quickly toward budget austerity. Mr. Obama’s recently announced jobs plan seeks to avoid this with new spending and temporary tax cuts that economists say will help guard against a double-dip recession. Here, too, however, Mr. Boehner indicated Thursday that the chances for cooperation with Republicans is limited, saying that he doesn’t favor “short-term gimmicks.”

Poll after poll has shown that Washington leaders’ inability to surrender ideological ground is poisoning Americans’ faith in their national leadership — perhaps even in the very institutions of government. Mr. Boehner and his party should live up to the speaker’s own standard — and leave the “my way or the highway” philosophy behind.

 

By: Editorial Board, The New York Times, September 16, 2011

September 18, 2011 Posted by | Budget, Class Warfare, Congress, Conservatives, Debt Crisis, Economic Recovery, Economy, Elections, GOP, Government, Ideologues, Ideology, Jobs, Lawmakers, Medicare, Middle Class, Politics, President Obama, Republicans, Right Wing, Social Security, Tax Increases, Taxes, Teaparty, Unemployed, Wealthy | , , , | Leave a comment

The GOP Magical World Of Voodoo ‘Economists’: Repeal The 20th Century

If you came up with a bumper sticker that pulls together the platform of this year’s crop of Republican presidential candidates, it would have to be:

Repeal the 20th century. Vote GOP.

It’s not just the 21st century they want to turn the clock back on — health-care reform, global warming and the financial regulations passed in the wake of the recent financial crises and accounting scandals.

These folks are actually talking about repealing the Clean Air Act, the Clean Water Act and the Environmental Protection Agency, created in 1970s.

They’re talking about abolishing Medicare and Medicaid, which passed in the 1960s, and Social Security, created in the 1930s.

They reject as thoroughly discredited all of Keynesian economics, including the efficacy of fiscal stimulus, preferring the budget-balancing economic policies that turned the 1929 stock market crash into the Great Depression.

They also reject the efficacy of monetary stimulus to fight recession, and give the strong impression they wouldn’t mind abolishing the Federal Reserve and putting the country back on the gold standard.

They refuse to embrace Darwin’s theory of evolution, which has been widely accepted since the Scopes Trial of the 1920s.

One of them is even talking about repealing the 16th and 17th amendments to the Constitution, allowing for a federal income tax and the direct election of senators — landmarks of the Progressive Era.

What’s next — repeal of quantum physics?

Not every candidate embraces every one of these kooky ideas. But what’s striking is that when Rick Perry stands up and declares that “Keynesian policy and Keynesian theory is now done,” not one candidate is willing to speak up for the most important economic thinker of the 20th century. Or when Michele Bachmann declares that natural selection is just a theory, none of the other candidates is willing to risk the wrath of the religious right and call her on it. Leadership, it ain’t.

I realize economics isn’t a science the way biology and physics are sciences, but it’s close enough to one that there are ideas, principles and insights from experience that economists generally agree upon. Listening to the Republicans talk about the economy and economic policy, however, is like entering into an alternative reality.

Theirs is a magical world in which the gulf oil spill and the Japanese nuclear disaster never happened and there was never a problem with smog, polluted rivers or contaminated hamburger. It is a world where Enron and Worldcom did not collapse and shoddy underwriting by bankers did not bring the financial system to the brink of a meltdown. It is a world where the unemployed can always find a job if they really want one and businesses never, ever ship jobs overseas.

As politicians who are always quick to point out that it is only the private sector that creates economic growth, I found it rather comical to watch the governors at last week’s debate duke it out over who “created” the most jobs while in office. I know it must have just been an oversight, but I couldn’t help noticing that neither Mitt Romney nor Perry thought to exclude the thousands of government jobs included in their calculations — the kinds of jobs they and their fellow Republicans now view as economically illegitimate.

And how wonderfully precise they can be when it comes to job numbers. Romney is way out front when it comes to this kind of false precision. His new economic plan calculates that President Obama would “threaten” 7.3 million jobs with the ozone regulation that, in fact, the president had just canceled. By contrast, Romney claims his own plan will create 11 million jobs in his first term — not 10, not 12, but 11 million.

When you dig into such calculations, however, it turns out many are based on back-of-the-envelope extrapolations from industry data that totally ignore the dynamic quality of economic interactions.

One recent example comes from the cement industry, which now warns that new regulations limiting emissions of sulfur dioxide and nitrogen oxide could close as many as 18 of the 100 cement plants in the United States, resulting in the direct loss of 13,000 jobs.

Then again, where do you think all those customers of the 18 plants will get their cement? Do you think they might get some of it from the other 82 plants, which in turn might have to add a few workers to handle the additional volume? Or that a higher price for cement might induce somebody to build a modern plant to take advantage of the suddenly unmet demand? Or perhaps that higher prices for cement will lead some customers to use another building material produced by an industry that will have to add workers to increase its output? And what about the possibility that the regulation will encourage some innovative company to devise emissions-control equipment that will not only allow some of those plants to remain open but generate a few thousand extra jobs of its own as it exports to plants around the world.

Such possibilities are rarely, if ever, acknowledged in these “job-scare studies.” Also left out are any estimates of the benefits that might accrue in terms of longer, healthier lives. In the Republican alternative universe, it’s all costs, no benefits when it comes to government regulation. As they see it, government regulators wake up every morning with an uncontrollable urge to see how many jobs they can destroy.

If consistency is the hobgoblin of small minds, then these Republican presidential candidates are big thinkers, particularly on fiscal issues.

In the Republican alternative universe, allowing an income tax cut for rich people to expire will “devastate” the U.S. economy, while letting a payroll tax cut for working people to expire would hardly be noticed. Cutting defense spending is economic folly; cutting food stamps for poor children an economic imperative.

My favorite, though, is a proposal, backed by nearly all the candidates along with the U.S. Chamber of Commerce, to allow big corporations to bring home, at a greatly reduced tax rate, the more than $1 trillion in profits they have stashed away in foreign subsidiaries.

“Repatriation,” as it is called, was tried during the “jobless recovery” of the Bush years, with the promise that it would create 500,000 jobs over two years as corporations reinvested the cash in their U.S. operations. According to the most definitive studies of what happened, however, most of the repatriated profits weren’t used to hire workers or invest in new plants and equipment. Instead, they were used to pay down debt or buy back stock.

But fear not. In a new paper prepared for the chamber, Republican economist Douglas Holtz-Eakin argues that just because the money went to creditors and investors doesn’t mean it didn’t create jobs. After all, creditors and shareholders are people, too — people who will turn around and spend most of it, in the process increasing the overall demand for goods and services. As a result, Holtz-Eakin argues, a dollar of repatriated profit would have roughly the same impact on the economy as a dollar under the Obama stimulus plan, or in the case of $1 trillion in repatriated profit, about 3 million new jobs.

It’s a lovely economic argument, and it might even be right. But for Republican presidential candidates, it presents a little problem. You can’t argue, at one moment, that putting $1 trillion of money in the hands of households and business failed to create even a single job, and at the next moment argue that putting an extra $1 trillion in repatriated profit into their hands will magically generate jobs for millions.

It took a while, but even Richard Nixon came around to declaring himself a Keynesian. Maybe there is still hope for Perry and the gang.

By: Steve Pearlstein, Columnist, The Washington Post, September 10, 2011

September 14, 2011 Posted by | Affordable Care Act, Banks, Class Warfare, Congress, Conservatives, Constitution, Economic Recovery, Economy, Environment, Environmental Protection Agency, Federal Budget, Global Warming, GOP, Government, Health Reform, Ideologues, Ideology, Jobs, Medicaid, Medicare, Middle Class, Politics, Public, Regulations, Republicans, Right Wing, Social Security, Taxes, Tea Party, U.S. Chamber of Commerce, Unemployed, Wealthy | , , , , , , , , , , , | Leave a comment

Corporations Can Show Their Patriotism By Hiring

Former President Bush was roundly derided a decade ago for  urging Americans traumatized by the September 11 attacks to go shopping. He  may, in fact, have been onto something.

Certainly,  shopping on its own is a facile and   inadequate response to a tragedy that required a new assessment of our  national security  procedures and how much of our revered American civil  liberties we  were willing to give up to achieve security—or perhaps, a sense  of  security. That conversation needs to continue, especially in the area of   civil liberties retrenchment.

But  Bush was right about something, and that is that ours is a  consumer-driven  economy. This is arguably a bad basis for a modern  economy; there is only so  much we can consume (the obesity epidemic is  only one sign of our  over-indulgence). And people were foolishly taking  out home equity loans on  wildly over-valued properties and then using  the money not to improve the  property (thus, theoretically, increasing  its value), but to buy other things.  This is not sensible. But the  reality is, our economy runs on people buying  things, and with the  economy in the state it’s in, people aren’t shopping  anymore. Since  people aren’t buying, companies aren’t creating jobs. Many  corporations  are making record profits and holding huge amounts of cash, but  they  don’t want to take on more workers because the demand is not there.

So,  here’s a 10-years-after tweak of Bush’s suggestion: if corporate  America wants  to shows its collective patriotism, its leaders should  hire someone. Hire even  a dozen people, if you run a large company, or  even one employee, if you own a  small business. Some public officials  are worried about raising taxes on the  wealthy, arguing that the  well-off are job creators. Well, create some jobs,  first, and that  argument will have more merit. And remember: taking on another  employee  isn’t a cash loss, ultimately, because it creates a new customer (and  a  taxpayer who won’t be getting unemployment  insurance anymore, either). If  shopping was the answer a decade ago,  hiring someone is the answer now. It’s  the patriotic thing to do.

 

By: Susan Milligan, U. S. News and World Report, September 12, 2011

September 12, 2011 Posted by | Businesses, Class Warfare, Conservatives, Consumers, Corporations, Economic Recovery, Economy, GOP, Jobs, Labor, Middle Class, Mortgages, Politics, Public, Republicans, Right Wing, Taxes, Unemployed, Wealthy | , , , , , , | Leave a comment

Out Of The Shadows: Bush And Cheney Remind Us How We Got Into This Mess

Thank you, George W. Bush and Dick Cheney, for emerging from your secure, undisclosed locations to remind us how we got into this mess: It didn’t happen by accident.

The important thing isn’t what Bush says in his interview with National Geographic or what scores Cheney tries to settle in his memoir. What matters is that as they return to the public eye, they highlight their record of wrongheaded policy choices that helped bring the nation to a sour, penurious state.

Questions about whether President Obama has been combative enough in dealing with the Republican opposition — or sufficiently ambitious in framing his progressive agenda — seem trivial when viewed in this larger context. Obama is tackling enormous problems that took many years to create. His presidential style is important insofar as it boosts or lessens his effectiveness, but its importance pales beside the generally righteous substance of what he’s trying to accomplish.

It was the Bush administration, you will recall, that sent the national debt into the stratosphere and choked off federal revenue to the point of asphyxiation. Bush and Cheney decided to fight two wars without even accounting — let alone paying — for them. Rather than raise taxes to cover the cost of military campaigns in Afghanistan and Iraq, Bush opted to maintain unreasonable and unnecessary tax cuts.

So far, the wars and the tax cuts have cost the Treasury between $4 trillion and $5 trillion. If Bush had just left income tax rates alone, nobody except Ron Paul would be talking about the debt.

My aim isn’t to attack Bush but to attack his philosophy. When he was campaigning for the White House in 2000, the government was anticipating a projected surplus of roughly $6 trillion over the following decade. Bush said repeatedly that he thought this was too much and wanted to bring the surplus down — hence, in 2001, the first of his two big tax cuts.

Bush was hewing to what had already become Republican dogma and by now has become something akin to scripture: Taxes must always be cut because government must always be starved.

The party ascribes this golden rule to Ronald Reagan — conveniently forgetting that Reagan, in his eight years as president, raised taxes 11 times. Reagan may have believed in small government, but he did believe in government itself. Today’s Republicans have perverted Reagan’s philosophy into a kind of anti-government nihilism — an irresponsible, almost childish insistence that the basic laws of arithmetic can be suspended at their will.

The Bush administration also pushed forward Reagan’s policy of deregulation — ignoring, for example, critics who said the ballooning market in mortgage-backed securities needed more oversight. When the 2008 financial crisis hit, Bush did regain his faith in government long enough to throw together the $800 billion TARP bailout for the banks. But he failed to use the leverage of an aid package to exact reforms that would ensure that the financial system served the economy, rather than the other way around.

Faced with similar circumstances, would today’s Republican leadership react at all? Or is it the party’s view that the proper role of government would be to stand aside and watch the world’s financial system crash and burn?

This is a serious question. Just a few weeks ago, the Republican majority in the House threatened to force the United States government to default on its debt obligations — a previously unthinkable act of brinkmanship. Everything is thinkable now.

The Bush administration took Reagan’s tax-cutting, government-starving philosophy much too far. Today’s Republican Party takes it well beyond, into a rigid absolutism that would be comical if it were not so consequential.

We face devastating unemployment. Many conservative economists have joined the chorus calling for more short-term spending by the federal government as a way to boost growth. But the radical Republicans don’t pay attention to conservative economists anymore. The Republicans’ idea of a cure for cancer would be to cut spending and cut taxes.

Perhaps they’re just cynically trying to keep the economy in the doldrums through next year to hurt Obama’s chances of reelection. I worry that their fanaticism is sincere — that one of our major parties has gone completely off the rails. If so, things will get worse before they get better.

Having Bush and Cheney reappear is a reminder to step back and look at what Obama is up against. You might want to cut him a little slack.

By: Eugene Robinson, Opinion Writer, The Washington Post, September 1, 2011

September 3, 2011 Posted by | Class Warfare, Congress, Conservatives, Debt Crisis, Deficits, Economic Recovery, Economy, Elections, Federal Budget, Financial Institutions, GOP, Government, Government Shut Down, Ideologues, Ideology, Jobs, Lawmakers, Middle Class, Mortgages, Neo-Cons, Politics, President Obama, Public, Regulations, Republicans, Right Wing, Tax Increases, Tax Loopholes, Taxes, Teaparty, Unemployed, War, Wealthy | , , , , , , , , , , , , , , | Leave a comment

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