“The Punishment Cure”: The GOP Pattern Of Afflicting The Afflicted While Comforting The Comfortable
Six years have passed since the United States economy entered the Great Recession, four and a half since it officially began to recover, but long-term unemployment remains disastrously high. And Republicans have a theory about why this is happening. Their theory is, as it happens, completely wrong. But they’re sticking to it — and as a result, 1.3 million American workers, many of them in desperate financial straits, are set to lose unemployment benefits at the end of December.
Merry Christmas.
Now, the G.O.P.’s desire to punish the unemployed doesn’t arise solely from bad economics; it’s part of a general pattern of afflicting the afflicted while comforting the comfortable (no to food stamps, yes to farm subsidies). But ideas do matter — as John Maynard Keynes famously wrote, they are “dangerous for good or evil.” And the case of unemployment benefits is an especially clear example of superficially plausible but wrong economic ideas being dangerous for evil.
Here’s the world as many Republicans see it: Unemployment insurance, which generally pays eligible workers between 40 and 50 percent of their previous pay, reduces the incentive to search for a new job. As a result, the story goes, workers stay unemployed longer. In particular, it’s claimed that the Emergency Unemployment Compensation program, which lets workers collect benefits beyond the usual limit of 26 weeks, explains why there are four million long-term unemployed workers in America today, up from just one million in 2007.
Correspondingly, the G.O.P. answer to the problem of long-term unemployment is to increase the pain of the long-term unemployed: Cut off their benefits, and they’ll go out and find jobs. How, exactly, will they find jobs when there are three times as many job-seekers as job vacancies? Details, details.
Proponents of this story like to cite academic research — some of it from Democratic-leaning economists — that seemingly confirms the idea that unemployment insurance causes unemployment. They’re not equally fond of pointing out that this research is two or more decades old, has not stood the test of time, and is irrelevant in any case given our current economic situation.
The view of most labor economists now is that unemployment benefits have only a modest negative effect on job search — and in today’s economy have no negative effect at all on overall employment. On the contrary, unemployment benefits help create jobs, and cutting those benefits would depress the economy as a whole.
Ask yourself how, exactly, ending unemployment benefits would create more jobs. It’s true that some of the currently unemployed, finding themselves even more desperate than before, might manage to snatch jobs away from those who currently have them. But what would give businesses a reason to employ more workers as opposed to replacing existing workers?
You might be tempted to argue that more intense competition among workers would lead to lower wages, and that cheap labor would encourage hiring. But that argument involves a fallacy of composition. Cut the wages of some workers relative to those of other workers, and those accepting the wage cuts may gain a competitive edge. Cut everyone’s wages, however, and nobody gains an edge. All that happens is a general fall in income — which, among other things, increases the burden of household debt, and is therefore a net negative for overall employment.
The point is that employment in today’s American economy is limited by demand, not supply. Businesses aren’t failing to hire because they can’t find willing workers; they’re failing to hire because they can’t find enough customers. And slashing unemployment benefits — which would have the side effect of reducing incomes and hence consumer spending — would just make the situation worse.
Still, don’t expect prominent Republicans to change their views, except maybe to come up with additional reasons to punish the unemployed. For example, Senator Rand Paul recently cited research suggesting that the long-term unemployed have a hard time re-entering the work force as a reason to, you guessed it, cut off long-term unemployment benefits. You see, those benefits are actually a “disservice” to the unemployed.
The good news, such as it is, is that the White House and Senate Democrats are trying to make an issue of expiring unemployment benefits. The bad news is that they don’t sound willing to make extending benefits a precondition for a budget deal, which means that they aren’t really willing to make a stand.
So the odds, I’m sorry to say, are that the long-term unemployed will be cut off, thanks to a perfect marriage of callousness — a complete lack of empathy for the unfortunate — with bad economics. But then, hasn’t that been the story of just about everything lately?
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 8, 2013
“Hell Bent On Another Crisis”: Will Congress Ever Grasp That The Debt Crisis Is Fake?
As the American people tried to celebrate last year’s holiday season while mourning the loss of 26 lives in Newtown, Connecticut, Congress and the White House were duking it out over the “fiscal cliff.”
Our leaders reached a temporary solution on New Year’s Day that averted some of the self-imposed toxic mix of mandated tax increases and discretionary spending cuts that threatened to trigger a new recession. In the end, they couldn’t agree on a comprehensive deal, so the sequester went into effect two months later with relatively little fanfare.
We’re still living with those $80 billion across-the-board cuts, which slashed research spending, kicked nearly 60,000 kids out of Head Start and forced Meals on Wheels to provide less help for the elderly and others in need.
Now they’re at it again. After October’s government shutdown, a new congressional committee got a Friday, December 13 deadline to reach an agreement on a budget for the 2014 fiscal year — which began more than two months ago. Come January 15, federal spending authority will run out again and we could begin 2014 with another shutdown.
On the surface, the conflict between President Barack Obama and the Republican Party is over how to cut yearly federal deficits, which pile up over time and increase the national debt. Republicans cite a “debt crisis” and construct economic doomsday scenarios to justify their insistence that Medicaid, Medicare and Social Security should be cut.
Obama says no — we need more revenue, and it needs to come from the very wealthy and corporations who don’t pay their fair share in taxes. Besides, the deficit is already much smaller – thanks to the ongoing sequester and two provisions in that New Year’s fiscal deal: a payroll tax cut for all workers and the end of the Bush-era tax cuts for the very richest Americans.
There are a couple of things wrong with this picture. To begin with, while the government is indeed operating at a deficit (albeit a much lower one) and as a consequence piling up debt, there is no debt “crisis.”
According to leading economists like Nobel Prize winner and New York Times columnist Paul Krugman, deficit spending can improve ailing economies, and we should actually have more of it until ours fully recovers from the deepest crisis we’ve seen since the Great Depression.
Secondly, Republicans don’t really care about deficits and debt. After all, they created both — largely through tax cuts for the wealthy and unpaid-for wars during the George W. Bush administration. Their whole argument is a smokescreen for their core agenda — massive wealth transfers from the poor and what’s left of the middle class to the rich — through regressive tax policies and dismantling the safety net.
This isn’t new. It’s been the Republican agenda for at least 30 years.
In 2011, Republicans brought the country to the brink of default for the first time in history by insisting that a raise in the debt ceiling (historically bipartisan and routine) be offset by program cuts. This year, they shut down the government because they didn’t get their way.
Obama has said that strategy won’t work again, and the current need to once again raise the amount the government can borrow is non-negotiable. And he has upped the ante with a new demand that any future cuts be offset by tax increases on the wealthiest and corporations.
We don’t yet know if the latest standoff will trigger a new round of cuts to programs low-income Americans depend on most. Right now the House is asking for a $40 billion cut in food stamps over the next decade, and Medicare and Social Security are always on their hit list.
What we do know is that Republicans seem bent on causing one “crisis” after another, and the country loses in the bargain.
By: Martha Burk, Director of the Corporate Accountability Project for the National Council of Women’s Organizations; Published in The Bill Moyers Blog, December 4, 2013
“Why Republicans Can’t Address Rising Inequality”: Even In The Face Of Reality, They Cannot Confess That They Aren’t Troubled At All
So far, the Republican response to President Obama’s historic address on economic inequality has not veered from the predictable clichés of Tea Party rhetoric. It was appropriately summarized in a tweet from House Speaker John Boehner, complaining that the Democrat in the White House wants “more government rather than more freedom” – and ignoring his challenge to Republicans to present solutions of their own.
But for Republicans to promote real remedies – the kind that would require more than 140 characters of text – they first would have to believe that inequality is a real problem. And there is no evidence that they do, despite fitful attempts by GOP leaders on Capitol Hill to display their “empathy” for the struggling, shrinking middle class.
Back when Occupy Wall Street briefly shook up the national conversation, House Majority Leader Eric Cantor and Budget Committee chair Paul Ryan both professed concern over the nation’s growing disparities of wealth and income. But their promises of proof that they care – and more important, of policy proposals to address what Cantor admits are “big challenges” – simply never materialized.
Meanwhile, working Americans learned what rich Republicans say in private about these sensitive topics when the “47 percent” video surfaced the following summer, in the final months of the 2012 presidential campaign. In Mitt Romney’s unguarded remarks to an audience of super-rich Florida financiers, the contempt for anyone who has benefited from public programs (other than banking bailouts) was palpable. Whether that sorry episode turned the election is arguable, but the Republican brand has never recovered – and the perception that Republicans like Romney and Ryan are hostile to the interests of working people remains indelible.
Of course, the House Republicans have done nothing to diminish that impression and everything to reinforce it. They have set about cutting food stamps, killing extended unemployment benefits, rejecting Medicaid expansion, as if competing in demonstrations of callous indifference. They complain about the lack of jobs – so long as they can blame Obama – but undermine every program designed to relieve the suffering of the jobless.
Callous or not, they are certainly indifferent to the injuries of inequality. In a party consumed by right-wing ideology and market idolatry, the further enrichment of the super-rich at the expense of everyone else is a feature of capitalism, not a bug. Whenever they bray about “getting government out of the way,” that means removing the last defenses against that process.
With Pope Francis and President Obama — a pair of the world’s most powerful voices — warning against the dangers of social exclusion and excessive greed, we can expect to hear expressions of remorse as well as rage from all the usual right-wing suspects. But what we shouldn’t expect is honesty. Republicans know that worsening inequality disturbs the great majority of Americans, so they cannot confess that they aren’t troubled at all.
Congress could begin to address the income gap, which conservative policies have exacerbated for three decades. Raising the minimum wage significantly would be a first step toward restoring fairness. Rebuilding the nation’s infrastructure and school systems, rather than letting them continuously decay, would raise employment substantially and improve incomes. Removing obstacles to unionization would begin to level the gross disparities in economic power between the 1 percent and the rest of us.
Now the president has vowed to fight inequality for the rest of his days in office. He is taking that fight directly to the Republicans who have frustrated so many of his initiatives. He will have to cast aside the last illusions of bipartisanship.
No matter what he does or says, he may not be able to win a higher minimum wage or a serious jobs program or universal pre-school with the other party controlling Congress. But if he consistently challenges us — and his adversaries — to restore an American dream that includes everyone, he may yet fashion a legacy worthy of his transformative ambitions.
By: Joe Conason, Featured Post, The National Memo, December 5, 2013
“Running Out Of Fresh Attacks”: Republicans Revive Mitt Romney’s Favorite Medicare Attack
With HealthCare.gov substantially improved and new insurance signups surging, Republicans have been forced to pivot to a new line of attack against the Affordable Care Act. On Tuesday, the National Republican Senatorial Committee issued a series of news releases accusing Democratic candidates of cutting Medicare through their support of the health care reform law.
“As the ObamaCare disaster continues to unfold, Mark Pryor and National Democrats have resorted to deceiving seniors using their old and discredited MediScare playbook,” reads the release targeting Senator Mark Pryor (D-AR).
“What’s new this year is the blatant hypocrisy that Mark Pryor and his liberal allies in Washington are exhibiting,” it continues. “Pryor’s deciding vote for ObamaCare cut $717 billion from Medicare—including nearly $5.4 billion directly from Arkansas ($10,296 per Medicare recipient in Arkansas).”
CNN reports that the NRSC campaign will target Senators Pryor, Mark Begich (D-AK), Kay Hagan (D-NC), Mary Landrieu (D-LA), Mark Udall (D-CO), Tom Udall (D-NM), Dick Durbin (D-IL), Jeanne Shaheen (D-NH), Jeff Merkley (D-OR), and Al Franken (D-MN), along with Senate candidates Rep. Bruce Braley (D-IA) and Rep. Gary Peters (D-MI).
If this line of attack sounds familiar, it’s because it was a centerpiece of Mitt Romney and Paul Ryan’s case against the Affordable Care Act in the 2012 elections. The Republican ticket repeatedly accused President Obama of having “robbed” and “raided” $716 billion from Medicare to “pay for Obamacare, a risky, unproven, federal takeover of health care.”
Of course, that attack ignored the fact that the overwhelming majority of the $716 billion actually represented reductions in how much Medicare pays hospitals and insurers, as WonkBlog’s Sarah Kliff explained last August. Medicare benefits themselves are not affected.
It also ignored the fact that Ryan’s own budget included the exact same $716 billion in cuts (with the implied promise of deeper cuts in the future to pay for trillions of dollars in new defense spending and tax cuts). He has also kept the savings in subsequent budget proposals. Nearly every Republican in Congress — including Rep. Tom Cotton (R-AR), Pryor’s chief rival in his 2014 re-election bid — has supported Ryan’s budget plans, significantly blunting the accusation’s impact.
Nonetheless, House Speaker John Boehner’s (R-OH) spokesman Brendan Buck told MSNBC that the attack is “a tried and true campaign hit” — ignoring that it totally failed to blunt the Democratic Party’s sweeping victory in 2012.
There’s no denying that Republicans had a good political month targeting the Affordable Care Act’s rocky rollout. But the fact that they are already returning to this easily debunked attack, which was proven to be unpersuasive in the last election, raises the question of whether they are running out of fresh attacks against the law. And with repeal seemingly off the table, one wonders where Republicans will turn if good news about the law continues to trickle out.
By: Henry Decker, Featured Post, The National Memo, December 4, 2013
“Will The GOP Ever Be Happy?”: No Matter The Facts, They Just Don’t Care If Healthcare.Gov Works Or Not
Healthcare.gov is well on its way to full stability, but Republicans refuse to acknowledge it. No matter the facts, the GOP is committed to the message that Obamacare has failed.
It wasn’t that long ago when Republicans were deeply concerned over the quality of the president’s healthcare website.
In a letter to Kathleen Sebelius, head of the Department of Health and Human Services, Rep. Darrell Issa and Sen. Lamar Alexander demanded answers for the massive glitches that attended the rollout of Healthcare.gov. “We are concerned by recent comments to the media that the system suffers from architectural problems that need design changes,” wrote the two GOP lawmakers, “We seek information about these problems as well as whether you still expect individuals to suffer a tax penalty if they do no purchase government-approved health insurance.”
Likewise, in a statement, Republican National Committee chairman Reince Priebus said that “Obamacare is collapsing under its own weight.” This was echoed by the Senate Republican Policy Committee, which called the website an “inexcusable train wreck” and wondered “how President Obama can tax uninsured Americans for not having something that they can’t purchase.”
The administration responded to all of this criticism—and more—with a promise that Healthcare.gov would work for the majority of users by December 1st. And it does. According to the administration, a five week “tech surge” has doubled the capacity of the online interface to the health care exchanges that form the core of the Affordable Care Act. As of this month, the website can handle 50,000 simultaneous users, for a total limit of 800,000 users per day. The site is functional more than ninety percent of the time, up from fifty-five percent of the time in October.
There is still a whole host of work to finish, especially on the back-end, where critical communications are made to insurers with regards to subsidies and eligibility. Overall, however, the White House has achieved more than 400 of the 600 fixes on its “punchcard” of repairs. Healthcare.gov is on the fast track to full stability, which will be a significant boost to the law and its prospects.
Given the extent to which Republicans were so concerned with the status of the website, you’d think they would greet this as good news, even as they continue to oppose the law. The message doesn’t have to be extensive. Something as simple as, “We still oppose the law, but we’re glad Americans haven’t been left in the cold,” would suffice.
Even that, however, is too generous for Republicans, who can’t concede any goodwill to the president’s health care law. “[The] website is least of Obamacare’s problems,” tweeted Sen. John Cornyn of Texas. “This isn’t just about a broken website, it’s about a fundamentally-flawed law,” wrote Michael Steel, a spokesperson for Speaker of the House John Boehner. And on ABC’s This Week, Oklahoma Senator Tom Cole said that “You never get a second chance to make a first impression, and the first impression here was terrible.”
The Republican complaints of two months ago were purely opportunistic. For them, it just doesn’t matter if Healthcare.gov is working, since Obamacare is destined to fail, reality be damned! At most, the broken website was useful fodder for attacks on the administration. Now that it’s made progress, the GOP will revert to its usual declarations that the Affordable Care Act is a hopeless disaster. Meanwhile, hundreds of thousands of Americans have gained access to health insurance thanks to the Medicaid expansion or the exchanges, and many more will join their ranks as the deadline for coverage approaches.
Republicans haven’t offered a response to this because, as of this moment, the party doesn’t have a response. Yes, there are conservative intellectuals with ideas for reform, but as an institution, the GOP has little to say about the constellation of problems in American health care. Even in their drive for repeal, Republicans failed to offer an alternative. At most, lawmakers like Bob Corker of Tennessee have tentatively called for “market-driven” reforms, like changes to the tax code, and allowing insurers to sell across state lines. Ironically, the Affordable Care Act allows for these changes, but that doesn’t seem to matter to the GOP.
It’s almost cliché to say that the Democratic Party is gambling its success on the Affordable Care Act. If it works, the party can point to a broad program that delivers needed benefits to millions of Americans. If it doesn’t, it’s hard to imagine how Democrats will re-earn the trust of a skeptical public, to say nothing of the fate of the uninsured and the broader consequences for liberalism.
In the same way, the Republican Party is gambling its fate on the failure of the law, with no attempt to grapple with the possibility of its success. What happens if Obamacare works as advertised? How do GOP leaders salvage a failed crusade? And more importantly, how do GOP voters react when the prospect of repeal is completely, unambiguously off the table?
By: Jamelle Bouie, The Daily Beast, December 2, 2013
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