“Fiscal Fever Breaks”: 2013 Was The Year Journalists And The Public Finally Grew Weary Of The Boys Who Cried Wolf
In 2012 President Obama, ever hopeful that reason would prevail, predicted that his re-election would finally break the G.O.P.’s “fever.” It didn’t.
But the intransigence of the right wasn’t the only disease troubling America’s body politic in 2012. We were also suffering from fiscal fever: the insistence by virtually the entire political and media establishment that budget deficits were our most important and urgent economic problem, even though the federal government could borrow at incredibly low interest rates. Instead of talking about mass unemployment and soaring inequality, Washington was almost exclusively focused on the alleged need to slash spending (which would worsen the jobs crisis) and hack away at the social safety net (which would worsen inequality).
So the good news is that this fever, unlike the fever of the Tea Party, has finally broken.
True, the fiscal scolds are still out there, and still getting worshipful treatment from some news organizations. As the Columbia Journalism Review recently noted, many reporters retain the habit of “treating deficit-cutting as a non-ideological objective while portraying other points of view as partisan or political.” But the scolds are no longer able to define the bounds of respectable opinion. For example, when the usual suspects recently piled on Senator Elizabeth Warren over her call for an expansion of Social Security, they clearly ended up enhancing her stature.
What changed? I’d suggest that at least four things happened to discredit deficit-cutting ideology.
First, the political premise behind “centrism” — that moderate Republicans would be willing to meet Democrats halfway in a Grand Bargain combining tax hikes and spending cuts — became untenable. There are no moderate Republicans. To the extent that there are debates between the Tea Party and non-Tea Party wings of the G.O.P., they’re about political strategy, not policy substance.
Second, a combination of rising tax receipts and falling spending has caused federal borrowing to plunge. This is actually a bad thing, because premature deficit-cutting damages our still-weak economy — in fact, we’d probably be close to full employment now but for the unprecedented fiscal austerity of the past three years. But a falling deficit has undermined the scare tactics so central to the “centrist” cause. Even longer-term projections of federal debt no longer look at all alarming.
Speaking of scare tactics, 2013 was the year journalists and the public finally grew weary of the boys who cried wolf. There was a time when audiences listened raptly to forecasts of fiscal doom — for example, when Erskine Bowles and Alan Simpson, co-chairmen of Mr. Obama’s debt commission, warned that a severe fiscal crisis was likely within two years. But that was almost three years ago.
Finally, over the course of 2013 the intellectual case for debt panic collapsed. Normally, technical debates among economists have relatively little impact on the political world, because politicians can almost always find experts — or, in many cases, “experts” — to tell them what they want to hear. But what happened in the year behind us may have been an exception.
For those who missed it or have forgotten, for several years fiscal scolds in both Europe and the United States leaned heavily on a paper by two highly-respected economists, Carmen Reinhart and Kenneth Rogoff, suggesting that government debt has severe negative effects on growth when it exceeds 90 percent of G.D.P. From the beginning, many economists expressed skepticism about this claim. In particular, it seemed immediately obvious that slow growth often causes high debt, not the other way around — as has surely been the case, for example, in both Japan and Italy. But in political circles the 90 percent claim nonetheless became gospel.
Then Thomas Herndon, a graduate student at the University of Massachusetts, reworked the data, and found that the apparent cliff at 90 percent disappeared once you corrected a minor error and added a few more data points.
Now, it’s not as if fiscal scolds really arrived at their position based on statistical evidence. As the old saying goes, they used Reinhart-Rogoff the way a drunk uses a lamppost — for support, not illumination. Still, they suddenly lost that support, and with it the ability to pretend that economic necessity justified their ideological agenda.
Still, does any of this matter? You could argue that it doesn’t — that fiscal scolds may have lost control of the conversation, but that we’re still doing terrible things like cutting off benefits to the long-term unemployed. But while policy remains terrible, we’re finally starting to talk about real issues like inequality, not a fake fiscal crisis. And that has to be a move in the right direction.
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 29, 2013
“Paul Ryan Lectures The Pope”: After All, “The Guy” Is From Argentina And Doesn’t Understand Capitalism
When 1.3 million Americans lose their unemployment benefits on Saturday, they can thank Rep. Paul Ryan. He took the lead in negotiating a bipartisan budget deal with Democratic Sen. Patty Murray, and on behalf of his party, held the line against continuing extended unemployment benefits for the long-term jobless.
Sure, a lot of Republicans share blame with Ryan. But he deserves extra-special (negative) credit for the deal, because he has lately had the audacity to depict himself as the new face of “compassionate conservatism,” insisting Republicans must pay attention to the problems of the poor. Friends say the man who once worshipped Ayn Rand now takes Pope Francis as his moral role model. Except he can’t help treating his new role model with arrogance and contempt.
It’s true that while knuckle-draggers like Rush Limbaugh attack the pope as a Marxist, Ryan has praised him, which I guess takes a tiny bit of courage since normally Republicans don’t like to buck the leader of their party. “What I love about the pope is he is triggering the exact kind of dialogue we ought to be having,” Ryan told the Milwaukee Journal-Sentinel. “People need to get involved in their communities to make a difference, to fix problems soul to soul.”
But he couldn’t suppress either his right-wing politics or his supreme capacity for condescension for very long. “The guy is from Argentina, they haven’t had real capitalism in Argentina,” Ryan said (referring to the pope as “the guy” is a nice folksy touch.) “They have crony capitalism in Argentina. They don’t have a true free enterprise system.”
Beltway journalists would have us believe Ryan’s love for the guy from Argentina is triggering genuine new interest in helping the poor. “My bet is that he’s on Pope Francis’ team,” a former Romney-Ryan advisor told BuzzFeed’s McKay Coppins, for a worshipful Ryan profile headlined “Paul Ryan finds God.”
I admit, I have been immune to Ryan’s various efforts to brand himself as a bright and innovative Republican over the years – and I continue to be. Let’s recall: The guy who impressed Ezra Klein as a serious albeit deficit-obsessed budget wonk turned out to be terrible at math – his heralded “Roadmap,” the Ryan budget, busted out the deficit for years and didn’t balance the budget until 2040, thanks to its generous tax cuts for the wealthy and corporations.
Now we’re supposed to believe Ryan is going to deliver an anti-poverty agenda as soon as the spring. “This is my next ‘Roadmap,’” Ryan told an aide, according to Coppins. “I want to figure out a way for conservatives to come up with solutions to poverty. I have to do this.”
Excuse me if I remain a skeptic. Ryan’s prescription for the poor is, and always has been, a dose of discipline. Even in 2010, with unemployment in his own district hovering around 12 percent, he voted against extending unemployment benefits on the grounds that they’d increase the deficit – and then reversed himself when they were coupled with an extension of Bush tax cuts, which of course added far more to the deficit than extended benefits.
Ryan has always defended his stinginess on safety net issues as tough love for the poor, giving them “incentives” to take a job, any job, to support their families.
“We have an incentive-based system where people want to get up and make the most of their lives, for themselves and their kids,” he says. “We don’t want to turn this safety net into a hammock that ends up lulling people in their lives into dependency and complacency. That’s the big debate we’re having right now.”
I don’t think Pope Francis would call our threadbare safety net a hammock.
Today, Ryan’s guide on the road to a GOP poverty agenda is the same man who has guided generations of Republicans into political self-congratulation and little else: Bob Woodson, a conservative proponent of what used to be touted as “black capitalism.” Now 75, Woodson runs the Center for Neighborhood Enterprise, and he helped inspire the dead-end “enterprise zone” movement beloved by some Republicans back in the 1980s and ’90s. Enterprise zones, which lowered taxes and created other incentives for businesses to invest and hire in low-income neighborhoods, were championed by the late Rep. Jack Kemp, who is one of Ryan’s political mentors. They have repeatedly been found to have “negligible” effects on employment, earnings and business creation in urban neighborhoods.
But Woodson apparently finds Ryan a one-man enterprise zone for restoring his national profile. (He last made headlines for attacking African-American Democrats at the GOP’s 50th anniversary of the March on Washington commemoration, insisting they let black issues languish while gays and immigrants became priorities.) Woodson is the star of Coppins’s Ryan piece, vouching for the Republican’s “authenticity” on poverty issues.
“The criminal lifestyle makes you very discerning, and everywhere I’ve taken Paul, these very discerning people have given me a thumbs up,” Woodson told Coppins. “You can’t lip synch authenticity around people like that.”
But when asked what Ryan has done tangibly for the poor, the Republican came up with one word: neckties. Apparently, according to Woodson, Ryan sent neckties to a classroom of teenagers after one admired his while he was visiting. So where conservatives used to preach that the poor should lift themselves up by their bootstraps, their new anti-poverty agenda involves neckties.
In the spirit of the holiday season, I have to admit there’s something a little bit touching about Ryan’s insistence that the GOP needs an anti-poverty agenda. Honestly, Jack Kemp would be a welcome addition to the modern Republican Party, which prefers to demonize the poor rather than empathize.
But forgive me if I can’t entirely believe in Paul Ryan’s “authenticity” on these issues. A guy so prideful that he thinks he can lecture the pope about capitalism doesn’t strike me as capable of the humility required to rethink his political beliefs. I have no doubt Pope Francis would support extended unemployment benefits, and a host of other policies to make life easier for poor people and help them find genuine opportunity. I don’t think he’d be satisfied with sending them neckties.
By: Joan Walsh, Editor at Large, Salon, December 28, 2013
“Merry Christmas From The GOP”: On December 28th Unemployment Benefits End For 1.3 Million Families
Three days after Christmas, unemployment benefits end for 1.3 million people who have exhausted their state unemployment benefits, but still can’t find a job.
To be eligible for unemployment benefits, you have to be actively looking for a job. Virtually all of these people would rather work, but can’t find a job in today’s economy where there are three applicants for every job available.
But when the budget deal was negotiated in Congress over the last several weeks, Republican negotiators refused to agree to continue those unemployment benefits. And at the same time, they demanded the continuation of tax breaks for big oil companies and loopholes for Wall Street billionaires who get their income from hedge funds.
Merry Christmas from the GOP.
Of course this kind of Christmas cheer comes from the same gang that routinely drags out the well-worn charge that progressives and Democrats are engaging in a “war on Christmas”. Maybe someone should force Republican Members of Congress to sit through a showing of “A Christmas Carol” and then explain why they think Ebenezer Scrooge is the hero.
Over the last decade the far right, that now dominates the GOP, has conducted a real war on the values that we celebrate at Christmas.
In case they missed it, Christmas is about giving, and sharing and loving your neighbor. It’s about family. Christmas has nothing to do with greed or selfishness or paying people poverty level wages so you can maximize your bottom line.
The Christmas spirit is not about cutting off an economic lifeline for over a million people so the wealthiest in the land can continue to prosper beyond imagining. And remember many of those same wealthy people who are doing so well are personally responsible for the recklessness that caused the Great Recession and cost the jobs of those whose unemployment benefits they now believe we can “no longer afford”.
You hear a lot from the right wing about having to make “tough choices” because some things “we just can’t afford”. Ironically those “things we cannot afford” never include the things that benefit the very wealthy.
In fact, as surprising as it may seem to many Americans, there is more bounty in the land this Christmas, than at any time in our nation’s history. Our income per capita – and our productivity per person – has increased by 80% over the last 30 years. But over those same 30 years, average incomes for most Americans were stagnant – and virtually all of that increased income and wealth went to the top 1%.
That is bad enough. But then to insist that our country “can’t afford” to continue paying unemployment benefits to people who can’t find a job – and by the way – cut off their benefits three days after Christmas – that is an outrage.
Many on the right are so out of touch with ordinary Americans that they argue that providing unemployment benefits makes people “dependent”. This of course completely ignores the fact that to qualify you have to have been working and lost your job for no fault of your own; you have to be actively looking for work; and the maximum benefits in many states are very low.
Ask the Koch brothers to support a family on the $258 per week maximum benefit in Louisiana, or the $275 per week maximum benefit in Florida – or even the $524 per week maximum benefit in Ohio.
People don’t want to stay on unemployment benefits. They want to find a job that provides them with income and benefits that allow them to give a better life to their families and their kids. They want to make a contribution and feel that they do worthwhile work. Most Americans want to be proud of what they do for a living – they don’t want to be “dependent” on anyone.
You have to be from another planet to believe that most people will become “dependent” on a total income of $275 per week.
Unemployment benefits provide workers and their families with an economic shot in the arm to get them through being laid off in an economy when jobs are still hard to come by.
And let’s be real clear why jobs are so hard to come by. Jobs are still hard to come by because of the policies of those very same right wing politicians who refused to reign in the orgy of reckless speculation on Wall Street that resulted in a ruinous financial collapse from which the economy is still recovering.
Jobs would be a lot easier to come by if the GOP did not do everything it could to block President Obama’s American’s Jobs Act that would create millions of jobs in both the public and private sectors by investing in teachers, and infrastructure.
Jobs would be a lot easier to come by if the GOP were not fixated on cutting government investment at a time when virtually all economists – including the Federal Reserve Chairman – believe we need more fiscal stimulus and that the policy’s of the Republicans in Congress continue to be a major drag on economic growth.
In fact the non-partisan Congressional Budget Office estimates that failing to continue federal unemployment benefits will cost the economy 240,000 jobs and slow the growth of the overall economy by .2%.
Those who receive unemployment benefits spend virtually every dime on the goods and services they need to live. That spending provides jobs to thousands of other Americans. So cutting federal unemployment benefits will actually create a quarter million more people who are unemployed. Great work GOP.
So here is the bottom line. It turns out that a society that reflects the spirit of Christmas – one where we have each other’s back – where we care about each other and not just ourselves – a society like that is better for everyone.
In fact, it turns out that the “moral” thing to do – the “right” thing to do – is also the “smart” thing to do.
It turns out that progressive values like loving your neighbor as your self – are the most precious possessions of humanity because they are the values that will allow us and our children to prosper and survive.
And that’s why the spirit of Christmas doesn’t just belong to Christians – or Catholics or Baptists or Episcopalians – or anyone. The Christmas spirit belongs to everyone on our small fragile planet. And that spirit embodies exactly the set of values that we must use to chart our course not just on Christmas Day but 365 days each year – including December 28th when over a million families will lose the economic lifeline that provides them a bridge to a better life.
By: Robert Creamer, The Huffington Post Blog, December 23, 2013
“Making The Poor, And The U.S. Poorer Still”: It’s Both Unjust And Economically Unsound For Congress To Cut Benefits To The Poor
Congress may take up legislation this week to cut food stamps. The Senate passed a bill in June mandating $4 billion in cuts over 10 years; the House version, passed in September, imposes nearly $40 billion in reductions. A conference committee has been charged with resolving these differences. Somehow, this negotiation is occurring amid the worst poverty levels in two decades, a weak overall economy and rapidly falling budget deficits. Under these circumstances, it would be economically and morally unsound to carry out the cuts.
Nearly 20 percent of Americans are officially poor or near poor. The Census Bureau reports that 15 percent of the population — nearly 47 million people — lives in poverty, including 22 percent of children. For an individual, this means annual income of $12,000 or less. For a family of four, the poverty threshold is $24,000 or less. Consider what living on those amounts would mean.
Roughly 18 million other people are near poor, living within 130 percent of the poverty line, according to census data. For individuals, this means earning $15,000 or less. These people often weave in and out of official poverty, depending on the month.
Most Americans living in poverty experience hunger or the pervasive fear of it. The U.S. Department of Agriculture reported that 49 million Americans, including 16 million children, lived in food-insecure households last year. That means that at some point in 2012, these households did not have enough food or were uncertain of having enough. That is as if all of California, Oregon and Washington were experiencing hunger or were afraid of it. There are serious social, economic and health consequences; for instance, diabetes, obesity and other chronic conditions afflict Americans who don’t have access to adequate nutrition.
Total federal spending on the Supplemental Nutrition Assistance Program (SNAP), this country’s main hunger prevention program, was $82.5 billion in fiscal 2013. To some that sounds like a lot, but it’s a small fraction of a $3.5 trillion budget and $16 trillion economy. This is evident when per-capita benefits are studied: The 2009 American Recovery and Reinvestment Act temporarily raised the weekly SNAP benefit by $25 to $33 for a family of four. But that temporary increase was allowed to expire this fall, so the SNAP benefit is back to the lower figure, or less than $1.40 per person per meal. These are small amounts relative to grocery costs, and even then only those with incomes below 130 percent of the poverty line are eligible for the aid.
It is hard to reconcile traditional American values of hard work and generosity with the levels of poverty and fear of hunger in our country, especially because large shares of those suffering this plight work. Nearly 11 million working Americans had annual income below the poverty line last year.
The working poor or near poor are also disadvantaged by our tax system. When a low-wage worker gets a raise or his or her spouse joins the workforce, food stamps are cut back. The family’s Medicaid eligibility is in jeopardy, and earned-income tax credit refunds are reduced or eliminated. A November 2012 Congressional Budget Office analysis concluded that the marginal tax rate imposed on increased income for such workers can be as much as 95 cents on every additional dollar earned. This is counterproductive.
Food stamps aren’t just a question of social justice; they are also a matter of economic policy. SNAP spending was increased in 2009 as part of the stimulus legislation to help rescue the economy. Like other elements of that legislation, the idea was to put money into the pockets of financially distressed Americans who would immediately spend it. The CBO reported that this legislation was largely effective in protecting the economy. More broadly, investments such as SNAP equip the poor and near poor to succeed economically. Good nutrition — as well as health care, education and secure housing — is a requisite for productivity, helping unemployed or marginally employed workers move into better jobs. This also allows them to build a better life for their children.
We believe that it would be both unjust and economically unsound for Congress to cut benefits to the poor and near poor. It has been a generation since our country last had a robust conversation about combating poverty. Now is the time to reinvigorate that conversation, not cut needed benefits.
“Today’s GOP”: Clueless, Heartless, And Gutless
The most charitable thing you can say about the Republican Party is that it has an image problem. Even if you support its policies, no clear-eyed observer can deny that on any given day the GOP looks clueless, heartless, and gutless.
Just take today. For all of President Obama’s problems and their correlation to the future of the Democratic Party (see: lack of credibility and competence), it takes just four stories to see how much worse things are for the GOP.
“Invisible Child: Dasani’s Homeless Life“ is a wrenching New York Times portrait of a girl stuck in poverty in the shadow of Manhattan’s opulence. More than that, it’s the story of our times.
In the short span of Dasani’s life, her city has been reborn. The skyline soars with luxury towers, beacons of a new gilded age. More than 200 miles of fresh bike lanes connect commuters to high-tech jobs, passing through upgraded parks and avant-garde projects like the High Line and Jane’s Carousel. Posh retail has spread from its Manhattan roots to the city’s other boroughs. These are the crown jewels of Mayor Michael R. Bloomberg’s long reign, which began just seven months after Dasani was born.
In the shadows of this renewal, it is Dasani’s population who have been left behind. The ranks of the poor have risen, with almost half of New Yorkers living near or below the poverty line. Their traditional anchors—affordable housing and jobs that pay a living wage—have weakened as the city reorders itself around the whims of the wealthy.
Long before Mayor-elect Bill de Blasio rose to power by denouncing the city’s inequality, children like Dasani were being pushed further into the margins, and not just in New York. Cities across the nation have become flash points of polarization, as one population has bounced back from the recession while another continues to struggle. One in five American children is now living in poverty, giving the United States the highest child poverty rate of any developed nation except for Romania.
Written by Andrea Elliott and illustrated by photographer Ruth Fremson, Dasani’s story is an indictment of a political system that is aiding and abetting America’s division by class, where the rich get richer, the poor get poorer, and the middle class gets squeezed into oblivion. Both major parties are complicit, but Republicans, more than Democrats, seem especially eager to widen and exploit American inequality. Take the next story, for example.
“Rand Paul: Unemployment Benefits Extension Would Be a ‘Disservice’ to Workers.” Unless Congress extends the Emergency Unemployment Compensation program, 1.3 million long-term jobless Americans will lose their benefits during the holidays. That’s good news, says the senator from Kentucky who hopes to be the 2016 GOP presidential nominee.
“When you allow people to be on unemployment insurance for 99 weeks, you’re causing them to become part of this perpetual unemployed group in our economy,” Paul argued on Fox News Sunday, citing an unnamed study. “I do support unemployment benefits for the 26 weeks that they’re paid for. If you extend it beyond that, you do a disservice to these workers,”
He’s wrong, and he’s making the GOP look clueless. Studies typically cited by the GOP are old and irrelevant to the current economy, which is in the midst of a once-a-century economic shift that makes it extraordinarily difficult for some workers to adjust.
Obama and fellow Democrats support the extension but seem unwilling to make it a precondition for a short-term budget deal. That means Republicans will probably get their way, and the have-nots will have less. Making matters worse …
“Making the Poor Poorer” is an op-ed in The Washington Post by Clinton-era Treasury Secretary Robert Rubin, Deputy Treasury Secretary Roger Altman, and economist Melissa Kearney. They argue that GOP-led plans to reduce food stamps would be “economically and morally unsound.” Despite shrinking social mobility and durable unemployment, Congress is poised to reduce a benefit that currently amounts to just $1.40 per person per meal. It looks heartless.
“It is hard to reconcile traditional American values of hard work and generosity with the levels of poverty and fear of hunger in our country, especially because large shares of those suffering this plight work,” they wrote. “Nearly 11 million working Americans had annual income below the poverty line last year.”
Republicans argue that the food-stamp program is growing, which they blame on Democrats rather than a global economic revolution and the lingering effects of a recession rooted in Clinton- and Bush-era policies. It most cases, poverty isn’t the fault of the poor. Trust us, the GOP says. And yet …
“The Bogus Claim That Obama Is ‘Closing’ the Vatican Embassy” is a Washington Post story that has nothing to do with the economy but everything to do with trust. Former Florida Gov. Jeb Bush and the Republican senatorial campaign committee falsely accused the White House of closing the embassy. The committee went so far as to call the White House anti-religion, a hateful slur. This is what political parties do: Find and create issues that divide Americans, exploit our ignorance and fear, and repeat.
The Republican Party, in particular, doesn’t have the courage to defy extreme elements of its coalition, such as those who pushed the Vatican-closing story. Bush knew or should have known that the story was wrong. The same goes for the National Republican Senatorial Campaign Committee. Indeed, sources tell me that there was some internal debate about whether to launch the attack. Level heads didn’t prevail. Gutless won.
By: Ron Fournier, The National Journal, December 9, 2013
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