“The Big Shrug”: A Combination Of Complacency And Fatalism By Fiscal Policy Makers That Nothing Need Be Done Or Can Be Done
I’ve been in this economics business for a while. In fact, I’ve been in it so long I still remember what people considered normal in those long-ago days before the financial crisis. Normal, back then, meant an economy adding a million or more jobs each year, enough to keep up with the growth in the working-age population. Normal meant an unemployment rate not much above 5 percent, except for brief recessions. And while there was always some unemployment, normal meant very few people out of work for extended periods.
So how, in those long-ago days, would we have reacted to Friday’s news that the number of Americans with jobs is still down two million from six years ago, that 7.6 percent of the work force is unemployed (with many more underemployed or forced to take low-paying jobs), and that more than four million of the unemployed have been out of work for more than six months? Well, we know how most political insiders reacted: they called it a pretty good jobs report. In fact, some are even celebrating the report as “proof” that the budget sequester isn’t doing any harm.
In other words, our policy discourse is still a long way from where it ought to be.
For more than three years some of us have fought the policy elite’s damaging obsession with budget deficits, an obsession that led governments to cut investment when they should have been raising it, to destroy jobs when job creation should have been their priority. That fight seems largely won — in fact, I don’t think I’ve ever seen anything quite like the sudden intellectual collapse of austerity economics as a policy doctrine.
But while insiders no longer seem determined to worry about the wrong things, that’s not enough; they also need to start worrying about the right things — namely, the plight of the jobless and the immense continuing waste from a depressed economy. And that’s not happening. Instead, policy makers both here and in Europe seem gripped by a combination of complacency and fatalism, a sense that nothing need be done and nothing can be done. Call it the big shrug.
Even the people I consider the good guys, policy makers who have in the past shown real concern over our economic weakness, aren’t showing much sense of urgency these days. For example, last fall some of us were greatly encouraged by the Federal Reserve’s announcement that it was instituting new measures to bolster the economy. Policy specifics aside, the Fed seemed to be signaling its willingness to do whatever it took to get unemployment down. Lately, however, what one mostly hears from the Fed is talk of “tapering,” of letting up on its efforts, even though inflation is below target, the employment situation is still terrible and the pace of improvement is glacial at best.
And Fed officials are, as I said, the good guys. Sometimes it seems as if nobody in Washington outside the Fed even considers high unemployment a problem.
Why isn’t reducing unemployment a major policy priority? One answer may be that inertia is a powerful force, and it’s hard to get policy changes absent the threat of disaster. As long as we’re adding jobs, not losing them, and unemployment is basically stable or falling, not rising, policy makers don’t feel any urgent need to act.
Another answer is that the unemployed don’t have much of a political voice. Profits are sky-high, stocks are up, so things are O.K. for the people who matter, right?
A third answer is that while we aren’t hearing so much these days from the self-styled deficit hawks, the monetary hawks — economists, politicians and officials who keep warning that low interest rates will have dire consequences — have, if anything, gotten even more vociferous. It doesn’t seem to matter that the monetary hawks, like the fiscal hawks, have an impressive record of being wrong about everything (where’s that runaway inflation they promised?). They just keep coming back; the arguments change (now they’re warning about asset bubbles), but the policy demand — tighter money and higher interest rates — is always the same. And it’s hard to escape the sense that the Fed is being intimidated into inaction.
The tragedy is that it’s all unnecessary. Yes, you hear talk about a “new normal” of much higher unemployment, but all the reasons given for this alleged new normal, such as the supposed mismatch between workers’ skills and the demands of the modern economy, fall apart when subjected to careful scrutiny. If Washington would reverse its destructive budget cuts, if the Fed would show the “Rooseveltian resolve” that Ben Bernanke demanded of Japanese officials back when he was an independent economist, we would quickly discover that there’s nothing normal or necessary about mass long-term unemployment.
So here’s my message to policy makers: Where we are is not O.K. Stop shrugging, and do your jobs.
By: Paul Krugman, Op-Ed Columnist, The New York Times, June 9, 2013
“Time For Issa To Put Up Or Shut Up”: Proof That White House Was Not Involved In IRS Tea Party Targeting Finally Exposed
Appearing this morning on CNN’s “State of the Union” and “CBS Sunday Morning”, Rep. Elijah Cummings, the ranking Democrat on the House Oversight Committee chaired by Rep. Darrell Issa, revealed that the manager responsible for the Cincinnati screening team involved in the 501(c)(4) investigations of conservative tea party groups—and the man that apparently first referred the issue to IRS technical office in Washington—has now weighed in on the controversy.
The Cincinnati based manager—a long-time employee of the IRS who self-identifies as a “conservative Republican”—was interviewed on Thursday by the staff of the Oversight Committee. What he had to say might well be the beginning of the end of Darrell Issa’s campaign to lay the blame for the IRS fiasco at the White House doorstep.
According to the transcript of the interview, the still unnamed supervisor was asked, “Do you have any reason to believe that anyone in the White House was involved in the decision to screen tea party cases?”
The manager’s response? “I have no reason to believe that.”
The gentleman is in a unique position to know what actually happened as he was the supervisor who, in 2010, sent the matter to the IRS technical office in Washington for further guidance after an IRS screener under his supervision identified an applicant for 501 (c)(4) status as a “high profile’” conservative organization. According to the manager, he forwarded the case to the Washington based technical folks for their guidance so that the matter could be treated “with consistency”.
What this tells us is that this was not a case of Washington instructing the Cincinnati office to target Tea Party applicants but rather it was the Cincinnati office that first sought guidance from the IRS in Washington as to how to handle the matter. This is a far cry, indeed, from what Chairman Issa has been trying to sell to the American public through his constant—yet fully unsubstantiated—claims that the targeting originated in White House.
According to the transcripts, the manager is now on record saying that there was no political motivation or instruction originating in the White House or anywhere else in the nation’s capital, noting “I do not believe that the screening of these cases had anything to do other than consistency and identifying issues that needed to have further development.”
In response to the interview with the Cincinnati supervisor, Representative Cummings suggested this morning that “Based upon everything I’ve seen the case is solved, and if it were me, I would wrap this case up and move on to be frank with you.”
Of course, Cummings desire to put the matter to bed is unlikely to happen. Certainly, any hope that the tide can be turned on the full-scale GOP attack on the President will require that the public gets a look at the actual transcripts to see the full interview—a matter that has, in and of itself, been chock full of controversy.
While Chairman Issa made news last week by promising to release full transcripts in support of his still unsupported claims in this matter, he has failed to release a word of testimony despite numerous requests from various reporters and columnists, including myself.
It was during Issa’s own “State of the Union” appearance last Sunday when he stated that interviews with workers in the Cincinnati IRS office indicated that targeting Tea Party applicants was “a problem that was coordinated in all likelihood right out of Washington headquarters – and we’re getting to proving it. My gut tells me that too many people knew this wrongdoing was going on before the election, and at least by some sort of convenient, benign neglect, allowed it to go on through the election. I’m not making any allegations as to motive, that they set out to do it, but certainly people knew it was happening.”
Despite Issa’s indication that the transcripts of interviews with the Cincinnati employees would be forthcoming, the transcripts have not been released including the transcript with the manager providing the testimony that would appear to clear the White House.
Representative Cummings is now demanding that all of the transcripts be released for review.
Speaking to Candy Crowley on this morning’s edition of “State of The Union”, Cummings said:
“I wrote Chairman Issa on Thursday and I wrote to him this morning. I want those transcripts to be released,” Cummings said. “I’m willing to come on your show next week with the chairman with the transcripts if he agrees to do that. If he doesn’t, I’ll release them by the end of the week.”
Good.
It’s far past time for Issa to back up his over-the-top allegations with some evidence–evidence that even conservative Republican Senator Lindsey Graham acknowledges has not been forthcoming.
While there is no reason to imagine that the anti-Obama forces will actually allow the truth to get in the way of their political narrative—nor will there be any shortage of Americans who will be more than willing to ignore the testimony of the one man in the Cincinnati who actually knows what happened—the truth may serve to accomplish one real benefit for which we can all be grateful—
Just maybe, Darrell Issa’s fifteen minutes of truly illegitimate and undeserved fame may finally be over.
Hallelujah.
By: Rick Ungar, Op-Ed Contributor, Forbes, June 9, 2013
“Special Hide The Money Designations”: The IRS Should Outlaw All Social Welfare Political Fronts
If you’re covered in political stink, it might be prudent to avoid yelling “dirty politics” at others.
Lately, a mess of right-wing Tea Party groups have been wailing nonstop that they have been targeted, harassed and denied their civic rights by partisan, out-of-control, Obamanistic IRS thugs (no adjective too extreme when assailing Obama or the IRS). The groups certainly are right that it’s abhorrent for a powerful agency to run a repressive witch-hunt against any group of citizens just because of their political views. After all, liberals have frequently felt the lash of such official repression by assorted McCarthyite-Nixonite-Cheneyite forces over the years, and it must be condemned, no matter who the victims.
In this case, however, the right-wing groups were not targeted by government snoops and political operatives, but tagged by their own applications to be designated by the IRS as 501(c)(4) “social welfare” groups. This privileged status would allow them to take unlimited bags of corporate cash without ever revealing to voters the names of the corporations putting up the money. The caveat is that 501(c)(4)s are supposed to do actual social welfare work and cannot be attached to any candidate or party, nor can politics be their primary purpose.
Forget what the rule says, though. Such notorious political players as Karl Rove and the Koch brothers have cynically set up their own pretend-welfare groups, openly using them as fronts to run secret-money election campaigns. Suddenly, hundreds of wannabe outfits were demanding that they be given the special hide-the-money designation, too, brazenly lying about their overt political purpose. Some even asserted that they were engaged in no political activity, when their own websites bragged that they were.
It was these groups’ stupidity and audacity that prompted the IRS inquiries, and their current hissy fit about the agency is really just a PR effort to let them continue their “social welfare” fraud.
I think of a “social welfare charity” as being an altruistic enterprise, like The Little Sisters of the Poor — not the avaricious Little Koch Brothers of the Plutocracy.
Yet the brothers have created their very own 501(c)(4) charity, which they used last year as a political front group for funneling $39 million into campaigns against Democrats. Interesting, since, the law bans these tax-exempt entities from spending more than 49 percent of their funding on political efforts to promote their “issues.”
Yet, there they are — hordes of political (c)(4)s, mostly right-wing, operating primarily as political pipelines for secretly gushing corporate money into raw, partisan campaigns. Their hocus-pocus lawyers and congressional consiglieres have badgered the IRS into handing them the (c)(4) get-out-of-jail-free card, then defied the agency to stop them as they dump millions of corrupt dollars into our elections.
For example, American Action Network, a “charity” created by Wall Street lobbyists, has spent two-thirds of its revenue on elections, including putting up $745,000 from secret donors to elect Sen. Ron Johnson of Wisconsin. How ironic, then, that Johnson is now one of the Tea Party mad dogs howling at IRS officials.
It’s scandalous, Johnson shrieks, that some Tea Party groups have not been given (c)(4) status, because IRS agents have had the temerity to question whether the groups actually are charitable enterprises — or just rank political outfits fraudulently posing as charities.
While Tea Party groups should not be singled out for IRS scrutiny, neither should they be allowed to cheat in elections by shamefully masquerading as Little Sisters of the Poor. That’s the real IRS scandal.
By: Jim Hightower, The National Memo, June 5, 2013
“Blind To The Past And The Future”: Republicans Are Ignorant Of The Lessons Of History And Impervious To The Wisdom Of Experience
As a new effort at comprehensive immigration reform inches its way forward in the Senate, dissent from many conservatives is revealing their true contempt for, and fear of, the possibility that demographic groups who look different from their base will accrue power.
The questions are: Is providing a pathway to citizenship (or at least permanent residency) for the 11 million people in this country illegally an act of humanity and practicality? Or is it an electoral imperative to which opposition ultimately guarantees political suicide?
The answer probably is “yes” to both, although many Republicans seem to think the opposite.
President George W. Bush, a supporter of a pathway to citizenship, spoke to The Huffington Post about the current efforts for comprehensive immigration reform, saying, “I think the atmosphere, unlike when I tried it, is better, maybe for the wrong reason.”
Bush continued: “The right reason is it’s important to reform a broken system. I’m not sure a right reason is that in so doing we win votes. I mean when you do the right thing, I think you win votes, as opposed to doing something that’s the right thing to win votes. Maybe there’s no difference there. It seems like there is to me though.”
But that distinction — humanitarianism over opportunism — is as lost on as many of Bush’s fellow Republicans today as when he was in office. They don’t even accept the logic of long-term electoral viability over extinction.
The most outlandish example of conservative rhetoric in its truly offensive glory on this subject came in an interview last week with Phyllis Schlafly, a prominent conservative activist, on the news site PolicyMic. In it she said:
“I don’t see any evidence that Hispanics resonate with Republican values. They have no experience or knowledge of the whole idea of limited government and keeping government out of our private lives. They come from a country where the government has to decide everything. I don’t know where you get the idea that the Mexicans coming in resonate with Republican values. They’re running an illegitimacy rate that is extremely high. I think it’s the highest of any ethnic group. We welcome people who want to be Americans. And then you hear many of them talk about wanting Mexico to reclaim several of our Southwestern states, because they think Mexico should really own some of those states. Well, that’s unacceptable. We don’t want people like that.”
There are so many stereotypes and fallacies in that statement that it’s not even worth unpacking, but it is a great illustration of some deep-rooted conservative views.
The one thing I will take the time to contest is the notion that even if Republicans changed their rhetoric and tactics, they wouldn’t gain traction with Hispanics (not all of whom are Mexican, by the way, Ms. Schlafly).
According to exit poll data, from the early 1980s to the early 2000s, Republicans made significant headway in closing the gap between the number of Hispanics who voted for Democratic candidates to the House of Representatives and those who voted for Republicans, shrinking a 50-point Democratic advantage in 1982 to just 12 points in 2004.
But then came Bush’s attempt at comprehensive immigration reform and the enormous pushback it got from Congressional Republicans. Just before Christmas in 2005, the Republican-led House passed an enforcement-only immigration bill that sparked huge protests.
In the 2006 elections, the Democratic advantage among Hispanic voters for House races shot back up to 48 points. That year, Democrats recaptured the House and the Senate, and took control of a majority of governorships.
Republicans, seemingly ignorant of the lessons of history and impervious to the wisdom of experience, are hellbent on revisiting 2005. While the Democratic advantage among Hispanics in presidential races is large and growing, the Democratic advantage in House elections has slowly begun to shrink again. And Hispanics, seemingly excited by the movement on immigration reform and optimistic about its prospects, have developed sharply more favorable opinions of Congress. A full 56 percent of Hispanics hold Congress in high esteem, up from 35 percent in November 2011, according to an ABC News/Washington Post Poll.
So what do some Republican lawmakers want to do to the only segment of the population in which a majority now has a favorable opinion of Congress? Spurn them and dash their hopes.
Brilliant, if you want to cement Democratic preference among Hispanics in perpetuity.
By: Charles M. Blow, Op-Ed Columnist, The New York Times, June 1, 2013
“When All Else Fails”: Marco Rubio’s Solution To The IRS Controversy Is To Repeal Obamacare
The old joke went that the Republican solution to any problem from bad jobs report to a cloudy Monday was “cut taxes!”
It was funny because it was true. Days after the 9/11 attacks, White House officials were reportedly on the phone with Capitol Hill saying that the stunned economy necessitated huge capital gains and dividend tax cuts, even though they knew a war was probably coming.
Marco Rubio (R-FL) has perfected the GOP’s new version of this old trope: using every problem as a justification to repeal Obamacare.
The U.S. senator picks a letter a week to answer on YouTube. This week, “Larry” from Florida repeated the “IRS will be in charge of your health care” backwash that has been circulating in the right-wing media from the Drudge Report to AM radio.
Repealing President Obama’s signature achievement is as popular now as cutting taxes, probably because the Affordable Care act raises taxes on the richest 2 percent to help working families afford health care.
But the connections between health care reform and the IRS are dubious, says the Washington Post‘s Fact-checker Glenn Kessler:
Clearly, Republicans would like to raise doubts about the health-care law by associating it with the stench of the IRS scandal. But it’s a bit much to suggest that the IRS would now be running health care in the United States, especially since the law leaves the employer-based system largely intact. After all, as Republicans frequently note, the Department of Health and Human Services has been charged with writing the thousands of pages of regulations that will govern benefit packages, the running of health-care exchanges and the like.
The IRS, by contrast, is mostly the bill collector. It will validate whether people have insurance, but as we noted last week, it will have no access to private health-care data. As McClatchy News put it — in an article cited by [National Republican Congressional Committee communications director Andrea] Bozek — “The Internal Revenue Service is an important cog in the implementation of the Patient Protection and Affordable Care Act of 2010.” A “cog” does not mean it is in charge of people’s health care.
Rubio has alienated many conservatives by embracing immigration reform with a path to citizenship that will not be held up by constant demands to secure a border that’s more secure than it has been in decades. So even though Rubio knows there’s no hope of repealing Obamacare until 2021 — or more likely, no hope of repealing it ever – he’ll keep repeating this empty talking point until he finds one that works better.
By: Jason Sattler, The National Memo, May 29, 2013
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