MORNING MESSAGE: Smart Talk On The Next Austerity Disaster
OurFuture.org’s Robert Borosage and Richard Eskow: “Mass unemployment, declining wages, and faltering growth suggests the United States has already suffered too much austerity, too soon. And yet the political debate is focused on how much more to impose. … Now Congress has created an even more precarious fiscal peril to extort even greater cuts. … Not surprisingly, polls suggest that most Americans believe that cutting spending will help the economy, not harm the recovery. The reality is that spending is not out of control, the deficit is already plummeting, and we should be focused on fixing the economy to make it work for working people, not on austerity driven by wrong-headed deficit hysteria.”
Flirting With, Or Fighting, Austerity Disaster
Sequestration cuts no longer the ‘bad policy’ bogeyman for Congress, reports The Hill: “When the prospect of $1 trillion in across-the-board cuts to both defense and non-defense spending was included in the 2011 Budget Control Act, leaders in Washington said the cuts would never happen — the across-the-board reductions were “bad policy” to be used as a “forcing mechanism.” But lawmakers have increasingly become open to the prospect that the cuts will, in fact, occur in 2013, after a two-month delay was included in the New Year’s Eve “fiscal-cliff” deal.
What sequestration would do to housing and economic development aid in each state is detailed by a new Center for Budget and Policy Priorities study.
How Very Serious People are completely missing the boat on the budget: Barkley Rosser on EconoSpeak: “I am talking about WaPo ed page editor, Fred Hiatt (who gave this bum this job anyway?) and of course my favorite non-economist posing as one, Robert J. Samuelson. … As it is, both studiously ignore the much more reasonable column on the same page by E.J. Dionne who cites both Martin Wolf and Bruce Bartlett on how it is “madness” to be so worked up about the deficit.”
Infrastructure spending will reduce our long-term debt, says Mark Thoma at The Fiscal Times: “It puts people to work on projects that promote economic growth – economic growth is one of the best ways to reduce the long-run debt burden – and money spent on infrastructure maintenance and repair saves us money in the long-run.”
Take action: Join a Rally to Protect Our Future on Jan. 30: “Working families will be gathering at congressional offices across the country on Wednesday to fight bad budget policies that would hurt both families and the recovering U.S. economy. Specifically, they will be telling members of Congress to reject any benefit cuts to Social Security, Medicare or Medicaid; close loopholes for Wall Street and the richest 2%; and cancel the sequestration crisis they created for themselves and the rest of the country.”
OurFuture.org’s Richard Eskow details the Treasury secretary’s record: “By any objective measure except one, Geithner’s tenure failed to achieve its goals. And that one success, in rescuing the mega-banks of Wall Street, may prove to be the undoing of Obama’s legacy. If bank misdeeds cause another crisis, which is very possible, he may be remembered for little else.”
Dean Baker says Geithner saved Wall Street, but not the economy. “It’s impossible to know whether the economy would have bounced back more quickly and we would be closer to full employment now without the bailouts, since none of us know what other policies would have been pursued. We do know that we would have been freed of the albatross of a horribly bloated financial sector that sucks the life out of the economy and redistributes income upward to the very rich. For that fact, Timothy Geithner bears considerable responsibility.”
“Top executives at firms that received taxpayer bailouts during the financial crisis continue to receive generous government-approved compensation packages, a Treasury watchdog said in a report released on Monday,” reports The New York Times. “All but one of the top executives at the failed insurer A.I.G. — which required more than $180 billion in emergency taxpayer financing — received pay packages worth more than $2 million. And 16 top executives at the three firms earned combined pay of more than $100 million.”
Contrast: Iceland President Olafur Ragnar Grimsson in Davos discusses how letting banks fail and shunning austerity measures enabled Iceland to recover more robustly from the economic downturn than the rest of Europe.
Meanwhile, in Wall Street predation: States force jobless to pay needless fees to big Wall Street banks in order to get their benefits. It’s “because of state policies encouraging them to get the money through bank-issued payment cards, according to a new report from a consumer group. People are using the fee-heavy cards instead of getting their payments deposited directly to their bank accounts. That’s because states issue bank cards automatically, require complicated paperwork or phone calls to set up direct deposit and fail to explain the card fees, according to a report issued Tuesday by the National Consumer Law Center, a nonprofit group that seeks to protect low-income Americans from unfair financial-services products. … Banks including JPMorgan Chase & Co., U.S. Bancorp and Bank of America Corp. seized on government payments as a business opportunity.”
Today In Conservative Crazy
Republicans descend on the National Review’s post-election summit: “Any hack can roll into a political conference, find the most outré attendees, and pretend that the room was packed with nothing but. National Review is a standard target of this sort of journalism. At least three times, liberals have embedded on the magazine’s biennial post-election cruises, and come out with feature-length contributions to the Those Crazy Conservatives genre. … But toward the end of the conference on Sunday, I sit in on a panel titled “What is a conservative foreign policy?” And in it, National Review’s Andrew McCarthy asks why Huma Abedin had been allowed, for so long, to work alongside Secretary of State Hillary Clinton, holding a security clearance.”
Fox anchor is convinced millions of new taxpayers would be bad for America because of Obamacare. Jed Lewison: “Meet Stuart Varney, a Fox Business News anchor who appeared on the mothership earlier Monday to tell Fox viewers why they should be very troubled at the prospect of immigration reform. According to Mr. Varney, granting citizenship to the 11 million people currently living in America without legal status would be a fiscal disaster for the country because they would suddenly become “eligible for Obamacare.”"
The underside of Bobby Jindal’s “Great Big Speech to the RNC in Charlotte last week” according to Ed Kilgore: “Bobby’s never very clear about the ultimate object of his policy ideas, such as they are. … the Smartest Guy In Every Room just isn’t thinking or talking very coherently. And any Republican should be very worried if this is the best the GOP’s got.”
Immigration Debate Update
President Obama will offer an immigration plan, not an immigration bill. Politico: “[White House] officials said the president’s plan would be more in depth than both the blueprint he released in 2011 and the set of principles announced Monday by a bipartisan group of senators. But he won’t produce a specific bill as long as the Senate is making progress, the officials said.”
Markos Moulitsas finds Senate bipartisan proposal “surprisingly good”: “It’s actually a smart ploy by Republicans—pretend to move ahead on immigration while doing their best to prevent those immigrants from ever casting votes that will undoubtedly be cast against them. But here’s the silver lining—if the fate of those in-limbo immigrants really depends on those border-state governors, then look out. Because our challenge in the South has been motivating Latino voters into turnout out. If Texas Latinos voted at the same rates as California Latinos, the Lone Star State would already be a swing state. And nothing will motivate them more than giving them the opportunity to decide the fate of their mothers, fathers, daughters and sons, cousins and aunts and extended family”
Why it would be hard for the GOP to benefit from immigration reform (Jamelle Bouie): “The reason is straightforward: Latinos are more liberal than the median voter. According to the most recent Pew poll on these questions (released last year), 75 percent of Hispanics say they support bigger government with more services, compared to 41 percent of the general population. Fifty-one percent say abortion should be legal, and 59 percent say “homosexuality should be accepted by society.” There just isn’t much appetite among Latinos for the traditional small government approach of the GOP. Comprehensive immigration reform may reduce hostility towards the Republican Party, but it won’t increase vote share.”
Executive Director of America’s Voice Frank Sharry unhappy with conservative Senate immigration proposals. “Some conservatives say this group of immigrants should be given permanent work permission but never be given a chance to become citizens. Others, such as Sen. Marco Rubio, R-Fla., argue that members of this group should be eligible for citizenship only if they go through established channels and go to the back of the line. The first proposal would lead to a de jure citizenship restriction. Since the end of slavery, America has never created a separate class of people who can never earn citizenship, and we should not start now. The second proposal would lead to a de facto citizenship restriction. The established channels are so restrictive and the current lines so backlogged that most of the 11 million would remain ineligible for citizenship for decades, if ever.”