Washington is agog with fiscal cliff hysteria. With everyone focused on how to reduce deficits, isn’t it time for a little common sense? Most Americans think their tax dollars are wasted in Washington. So why not start with a focus on reducing waste?

That would mean starting with the Pentagon, the largest source of waste, fraud and abuse in the federal government.

The Government Accountability Office does an annual report identifying the most inefficient and wasteful bureaucracies. And at the top of their list is the Pentagon.

The GAO “found evidence of duplication, overlap, or fragmentation” within the Pentagon’s endeavors. The Pentagon also “does not prioritize requirements, consider redundancies across proposed programs, or prioritize and analyze capability gaps in a consistent manner.” The GAO believes that close to $250 billion spent annually on the Pentagon’s programs could be streamlined. That would total more than $2 trillion wasted over 10 years. For example, consolidating common functions of the military medical command structure alone would result in savings ranging from $281 million to $400 million annually.

Many of the Pentagon’s programs are experiencing rapid cost overruns in several major weapons systems. In 2011, cost overruns added an extra $135 billion to the already staggering $1.68 trillion long-term acquisition budget. Since 2008, the price for military weapons has risen by an alarming 38 percent.

Apparently, the Pentagon’s philosophy is to spend first and ask questions later. The amount of waste from programs that have not been fully tested or researched is astonishing. For instance, $31.1 billion was lost due to inefficiencies within manufacturing and design processes in just the past year.

The worst part about this is that the Pentagon has not been held accountable for its waste and abuse. The Pentagon has become so big and complex that it can’t be audited, much less pass an audit. In other words, it cannot account for how it spends its money. Another GAO report found that the Pentagon “continues to lack the processes and system capabilities to reliably identify, aggregate and report the full cost of its investment,” which is estimated at over $1 trillion. It is disturbing that the Pentagon has no idea how much money it actually has or where all of the money that it spent went. Yet, the same bureaucracy cries foul when faced with budget cuts.

The huge five-sided money pit has flushed away enough taxpayer dollars. There is no easy answer to America’s looming financial crisis, but there are steps in the right direction. During budget negotiations, we don’t need compromise; we need common sense. If you want to reduce deficits, start by cutting waste and fat, not muscle. Don’t cut benefits for the vulnerable; cut waste in the largest and most costly bureaucracy in the Western world: the U.S. Pentagon.

Austerity is back in the news, and the news about austerity is never good. We’ve only had de facto austerity on this side of the pond. So as usual, the news is from Europe, where the austerians are going full-tilt boogie. Our homegrown austerians, like their European counterparts, tell us that the kind of severe austerity underway in Europe is necessary to reduce the deficit. Everything from food stamps to Medicaid and Medicare — everything except defense spending — must be cut in order to reduce the deficit. 

The thing is, it hasn’t worked. In Greece, Europe’s austerity poster child, austerity has shrunk the economy and increased the national debt. 

Greece’s draft budget for 2013 has forecast a deeper recession and worse debt problems than previously thought.

The economy is expected to shrink by 4.5% next year, and government debts to rise to 189% of economic output.

Greece held inconclusive negotiations with its rescue lenders on Wednesday over the economic reforms needed to release further bailout funds.

The government also faces opposition to the reforms from coalition partners and unions have called a general strike.

Finance Minister Yannis Stournaras held a conference call on Wednesday with his counterparts from the Eurogroup of eurozone finance ministers, as well as representatives of the International Monetary Fund and European Central Bank.

The German Finance Minister Wolfgang Schaeuble said afterwards that Athens still needed to do more.

Austerity is literally killing Greece. Yet the austerians demand more. 

Austerity only increased inequality in Portugal. Now, after painful austerity measures that hit ordinary Portuguese and public sector workers hardest failed to reduce the deficit, Portuguese citizens are planning to rally against new tax increases. 

Anti-austerity protesters in Portugal are planning street rallies as the country’s parliament is expected to approve big tax rises in a new budget.

The centre-right government in Lisbon is hoping to reduce its budget deficit as part of the 78bn-euro (£63bn; $101bn) EU-IMF bailout deal.

However, the proposed 2013 budget could face a challenge in court.

Portugal has already cut public sector wages and raised taxes, triggering a series of street demonstrations.

Unemployment in Portugal is at a record high, and people have faced sharp reductions in their incomes. None of it seems to have made a dent in Portugal’s debt problem. Yet the austerians demand more.

Austerity has been disastrous for Ireland, which once made the top ten on the Heritage Foundation’s Index of Economic Independence.

The Central Statistics Office released its yearbook of Ireland, giving a comprehensive picture with facts and figures on key areas of life, including population, education and the economy.

It revealed that the look of the labour market worsened in 2011, with jobs and pay still in decline since the recession.

The number of people in work fell to 1.821 million since 2010, while those unemployed rose 3.7 per cent to 304,500.

… A staggering 23 per cent of people had hit the deprivation rate by 2010 and were experiencing two or more types of poverty.

In September, Spain braced for further austerity measures even as hungry Spaniards foraged in trash bins for food. But Spain’s economy contracted for a fifth quarter, because of austerity-driven inflation.

Spain’s economy contracted for a fifth quarter, undermining efforts to plug the budget deficit that’s pushing the nation closer to a bailout, while austerity measures kept inflation at a 17-month high.

Gross domestic product declined 0.3 percent in the three months through September and 1.6 percent from a year earlier, the National Statistics Institute said today, compared with an Oct. 23 estimate from the Bank of Spain of a 0.4 percent contraction. Consumer prices, based on European Union methodology, rose 3.5 percent from a year earlier, INE said.

The deepening of Spain’s five-year slump, which is prompting record loan defaults at the nation’s banks and job cuts at companies including Gamesa SA, adds to pressure on Prime Minister Mariano Rajoy as he resists requesting international aid. While tax hikes he’s implementing as part of his austerity program are depressing consumption, they are also spurring inflation, which threatens to add 3 billion euros ($3.9 billion) to the country’s pension bill.

All across the EU, austerity has driven joblessness to a record high. 

The jobless rate in the euro area climbed to a record in September as the fiscal crisis and tougher austerity measures threatened to deepen the economy’s slump.

Unemployment in the economy of the 17 nation single currency area rose to 11.6 per cent from 11.5 per cent in August, the European Union statistics office Eurostat said today. That’s the highest since the data series started in 1995.

Some 18.5 million people were unemployed in the euro area in September, up 146,000 from the previous month.

At 25.8 per cent, Spain had the highest jobless rate in the currency bloc.

Portugal’s unemployment rate was at 15.7 per cent, while Ireland reported a jobless rate of 15.1 per cent. France’s jobless rate was at 10.8 per cent.

Italy’s jobless rate rose to its highest point in 13 years, at 10.8 per cent on a seasonally adjusted basis.

Yet the austerians demand even more. 

Americans should pay attention to the saga of austerity in the EU, for a couple of reasons. First, because conservatives here at home are committed to the same agenda that’s failed in Europe.

If Mr. Obama wins, he’ll presumably go back to pushing for modest stimulus, aiming to convert the gradual recovery that seems to be under way into a more rapid return to full employment.

Republicans, however, are committed to an economic doctrine that has proved false, indeed disastrous, in other countries. Nor are they likely to change their views in the light of experience. After all, facts haven’t gotten in the way of Republican orthodoxy on any other aspect of economic policy. The party remains opposed to effective financial regulation despite the catastrophe of 2008; it remains obsessed with the dangers of inflation despite years of false alarms. So it’s not likely to give up its politically convenient views about job creation.

And here’s the thing: if Mitt Romney wins the election, the G.O.P. will surely consider its economic ideas vindicated. In other words, politically good things may be about to happen to very bad ideas. And if that’s how it plays out, the American people will pay the price.

Second, if good things end up happening to bad political ideas here in the U.S., we may need to follow the example of Europeans who are standing up and saying “No,” when the austerians keep demanding more.

The upcoming presidential debate on foreign policy will undoubtedly feature warnings from Republican candidate Mitt Romney that defense spending cuts from the Obama administration will compromise the nation’s ability to defend itself.

What you will not hear, at least from Romney, is any acknowledgement that billions of Defense Department dollars could be saved simply by paying defense contractors no more than what they would get if they were on the federal payroll.

That simple proposal is just one item in a long list of changes to our defense spending that could enable us to meet our defense needs while spending far less than we do today.

It is contained in a letter sent to the leaders of the House and Senate armed services committees by several labor leaders and government watchdog groups. It’s not common knowledge that a Defense Department contractor can be paid as much as $763,029, 90 percent more than the salary of the president of the United States and about four times the salary of a comparable government employee.

Sen.Joe Manchin, D-W.Va., has sponsored an amendment to the 2013 defense authorization bill that would cap the taxpayer-paid salaries of defense contractor workers at $230,700, in line with the cap on salaries of federal employees. The contractor could pay that employee a higher salary, but it couldn’t do so out of federal funds.

As the letter points out, the compensation cap on government contracts has more than doubled since 1998, outpacing inflation by 53 percent. It has also outpaced the rate of federal employee salary growth by close to 50 percent.

In fact, defense contractors were authorized a 10 percent increase in allowable compensation even though soldiers were only allowed a 2 percent pay increase and the salaries of other federal employees have been under a two-year freeze that started October 2010.

Ross Eisenbrey at the Economic Policy Institute writes that “capping allowable reimbursement of compensation at $200,000 per employee would result in savings of at least $5 billion a year, just in Department of the Army contracts, almost 10 percent of the entire $55 billion defense budget cut required in 2013 by the Budget Control Act.”

After all, he adds, “the Secretary of Defense earns $200,000 to manage a military workforce of 1.4 million and a civilian workforce of 771,000 personnel. U.S. senators are paid $174,000 a year. An enlisted soldier’s starting pay is less than $20,000 a year. And the average salary of American workers is less than $43,000 a year. It is grossly unfair to expect working people to pay for the inflated salaries for defense contractor employees.”

There is much more, of course, to be said about the insistence that the nation can’t cut defense spending, even as Romney continues to propose an impossible mix of tax cuts and federal deficit reduction. As the Center for International Policy pointed out in July, “Nearly all of the purported ‘cuts’ to the Pentagon’s budget are actually reductions in the rate of growth, rather than true cuts in funding levels. In reality, even if sequestration is fully enacted as planned under the 2011 Budget Control Act, the Pentagon’s base budget would only return to 2006 levels (adjusted for inflation), which at the time was among the highest levels of spending since World War II.”

Because of money authorized in previous budgets that have yet to be spent on various projects, contractors have plenty of money in the pipeline to keep workers on the payroll, even if the sequestration – the so-called “fiscal cliff” – takes effect. So the warnings that these possible cuts in the proposed defense budget must inevitably lead to a wave of industry layoffs is false.

It would be worth asking in the debate whether taxpayers should be footing the $26.2 million a year compensation bill for people like Wes Bush, the CEO of Northrop Grumman, which derives most of its business from the federal government and which, as Andre Francisco at the Project for Government Oversight writes, “is part of a bloated defense industry that produces weapons so consistently behind schedule and over budget that an on-time, on-budget program would be cause for a parade.”

We saw the costly absurdity of defense contracting run amok during the war in Iraq. That exercise in conservative outsourcing orthodoxy by the Bush administration resulted in as much as $60 billion in waste, according to the congressional Commission on Wartime Contracting. That in itself should be a lesson to be wary of the fear-mongering from the right and the military-industrial complex that if we dramatically cut defense spending we will compromise our security and put hundreds of thousands of people out of work.

Senate Majority Leader Harry Reid says a Bain Capital partner told him Mitt Romney won’t show his tax returns because he paid no taxes for ten years.

Romney offers a nonsense response – essentially challenging REID to show us Romney’s tax returns, to prove it.
Romney to Reid: ‘Put up or shut up’ on source of ‘untrue’ tax claims,

Mitt Romney lashed back at Harry Reid on Thursday in an interview with Fox News’ Sean Hannity, saying the Senate majority leader needs to “put up or shut up” after airing allegations about Romney’s taxes.
Reid, a Nevada Democrat, first raised eyebrows Tuesday by saying in a news interview that someone had told him Romney went 10 years without paying taxes. He would only identify his source as an investor in Romney’s former venture capital firm, Bain Capital, and he acknowledged, “I’m not certain” it’s true.

Look Over There!

Romney’s “look over there!” defense makes absolutely no sense. Reid can’t “prove a negative” but Romney can clear it all up in an instant by showing us his tax returns. This “nonsense” defense reminded me of the famous “Chewbacca Defense:”

Two items in the news: a congressional committee warns that Chinese telecom companies might be spying on us, and the Secretary of Defense warns about “cybersecurity.” One report even says that Chinese-made equipment used in businesses here sends data to China at night! What’s the story?

CBS’ 60 Minutes recently had a story about the Chinese telecommunications company Huawei. Huawei is a giant Chinese telecommunications company. Founded in 1987 by a Chinese military officer, the company started out making phone and data “switching” systems to handle the communication needs of businesses in China. Over time and, according to a 60 Minutes report, with “steady, extensive support from the Chinese government” and “industrial espionage,” Huawei has grown to become the largest telecommunications equipment maker in the world. (For example, several years ago Cisco sued Huawei for copying Cisco’s products (and then selling them for much lower prices) — even going so far as having the same typos in their instruction manuals. Huawei settled the lawsuit.)

Here is the 60 Minutes segment, Huawei probed for security, espionage risk

The 60 Minutes segment reported on a report by the House Permanent Select Committee on Intelligence that warned of potential cyber-espionage by Huawei and another Chinese telecom, and ZTE. The report follows an an 11-month investigation of the companies. WaPo: Chinese telecom firms Huawei and ZTE pose security threat, congressional investigators say,

Rep. Mike Rogers (R-Mich.) said committee investigators received “numerous allegations” from U.S. companies that equipment bought from Huawei sent unauthorized data to computers in China.

“That’s a serious problem,” Rogers said at a news conference to release the results of an 11-month investigation into Huawei and another Chinese tech giant, ZTE. “It could be a router that turns on in the middle of the night, starts sending back large data packs, and it happens to be sent back to China.”

Rogers declined to identify companies that had complained about suspicious data transfers. But he and Rep. C.A. Dutch Ruppersberger (Md.), the committee’s ranking Democrat, recommended that the U.S. government and American firms avoid using equipment from the Chinese firms for tasks that involve large amounts of sensitive data. The two lawmakers said the firms’ close ties to the Chinese government pose a threat to national security.

Let me repeat this: the committee warns of reports that some equipment manufactured by these companies, used in our business and other communications, turns on in the middle of the night and sends large amounts of data to China. The committee report also describes possible bribery used to get that equipment placed in certain key locations. And the report says the committee had obtained internal documents from former employees of Huawei showing that the company supplied services to a “cyberwarfare” unit in the People’s Liberation Army. (I’ll let the reader read between the lines here. Hint: the suspicion is that they get the equipment placed into key strategic locations, then the equipment stores up vital proprietary business and government communications during the day and then sends it overnight to China where they can mine it for trade secrets and other useful information.)

Another worry is that there may be hidden “back doors” in this equipment that would allow key switches to be turned off as part of a coordinated cyberattack on our country.

At the same time, Secretary of Defense Leon Panetta gave a speech warning about the threat of “cyberattack.” NY Times: Panetta Warns of Dire Threat of Cyberattack on U.S.,

Defense Secretary Leon E. Panetta warned Thursday that the United States was facing the possibility of a “cyber-Pearl Harbor” and was increasingly vulnerable to foreign computer hackers who could dismantle the nation’s power grid, transportation system, financial networks and government.

… “An aggressor nation or extremist group could use these kinds of cyber tools to gain control of critical switches,” Mr. Panetta said. “They could derail passenger trains, or even more dangerous, derail passenger trains loaded with lethal chemicals. They could contaminate the water supply in major cities, or shut down the power grid across large parts of the country.”

… The most destructive possibilities, Mr. Panetta said, involve “cyber-actors launching several attacks on our critical infrastructure at one time, in combination with a physical attack.” He described the collective result as a “cyber-Pearl Harbor that would cause physical destruction and the loss of life, an attack that would paralyze and shock the nation and create a profound new sense of vulnerability.”

Panetta is trying to get Congress to pass a bill requiring “new standards at critical private-sector infrastructure facilities — like power plants, water treatment facilities and gas pipelines — where a computer breach could cause significant casualties or economic damage.” But so far the Chinese Republicans have managed to block passage. From August, Cybersecurity Bill Is Blocked in Senate by G.O.P. Filibuster,

The bill’s most vocal opponents were a group of Republican senators led by John McCain of Arizona, who took the side of the U.S. Chamber of Commerce and steadfastly opposed the legislation, arguing that it would be too burdensome for corporations.

The bill would have established optional standards for the computer systems that oversee the country’s critical infrastructure, like power grids, dams and transportation.

So who could be against strengthening our essential infrastructure from potential cyberattack? I mean, besides China? Yet, Senate Republicans went so far as to filibuster this bill saying it would cost American companies too much. It’s funny how often the interests of America’s giant corporations, the Chamber of Commerce and the Republican Party so often align against our own national interest, no? Wait, are we talking about this Chamber of Commerce?

Note – in the 1990s the Clinton administration, aware that certain non-US interests were monitoring the business communications of American companies, attempted to get a standardized encryption chip built into all voice and
email devices. Had this occurred anyone intercepting these communications could not decipher them.

Another note – maybe these companies know what they are doing. For a long time the airlines were able to block the government from requiring them to secure access to airplane cockpits because it would cost money to do so. Then came 9/11 – which was directly enabled by this ease of access to cockpits. How did that work out for the airlines? Let’s see, 9/11 Airline Bailout: So, Who Got What?

Propelled by … the airlines’ considerable lobbying clout, Congress, over the course of just two days, introduced, passed, and got presidential approval for a $15 billion bailout.

So the airlines got paid $15 billion for having blocked regulations requiring them to secure the cockpit! Maybe there is method to the madness of blocking cybersecurity requirements!

One last point: if you work in telecommunications, or if your company has sensitive information that you do now want stolen, please spend the time to read this report.

Earlier this week, The Washington Post’s Chris Cillizza wrote a piece that began with what was intended as a rhetorical question: “Quick, name President Obama’s best moment in the 2012 campaign so far? What about Mitt Romney’s high point?”

Cillizza was trying to suggest that neither candidate has had a high point, to make the case that the campaign has been “mediocre”, “small” and devoid of substance.

But it’s not a head-scratcher what President Obama’s best moment has been: his convention.

He and his party delivered a proud defense of his record and his philosophy that “government can be a force for good.”

He made a case for a second term agenda that would “reward[] companies that open new plants and train new workers and create new jobs here in the United States of America”, set “higher taxes on incomes over $250,000″, “reduce our deficit without sticking it to the middle class”, “continue to reduce the carbon pollution that is heating our planet” and “recruit a hundred thousand math and science teachers” … just to name a few policy goals.

After the voters saw Obama make his case, and saw Clint Eastwood make Mitt Romney’s case (wasn’t that Romney’s high point?), the polls indicate voters sided with Obama.

Cillizza’s dismissal of the substantive basis for Obama’s successful campaign to date leads him to a very pernicious conclusion: “… the relative smallness of this race — in spite of the declarations by both candidates that this election is about big things — virtually ensures that neither party emerges on Nov. 7 with a meaningful mandate…”

Excuse me? President Obama is on his way to back-to-back majority vote victories, something no president has done since Ronald Reagan, and no Democratic president has done since Franklin Roosevelt.

And he will have accomplished it in a race where each candidate’s standard stump speech draws a stark ideological contrast on the role of government nearly every day.

If that doesn’t give a president a mandate, then no election can.

Originally posted at Capital Gains and Games.

Take a look at this story by Jeremy Herb from The Hill yesterday and be prepared to stifle a huge scream.

As Herb wrote, former Secretary of Defense Robert Gates and former Joint Chiefs Chairman Admiral Mike Mullen complained at a program hosted by the Center for Strategic and International Studies about “Washington’s inability to grapple with the budget and debt problems facing the country.”

But shortly thereafter, Gates and Mullen make it clear that something that would do what they said they wanted by reducing the deficit and resulting in less federal debt — the sequester — is unacceptable because the sequestration Pentagon cuts “would be devastating (to the Pentagon) and lead to a hollow force.”

The logical next step for someone interested in reducing the deficit and debt but cutting military spending the right way should be to provide an outline, a guide path or even just a subtle indication of what that should look like. But like everyone else involved in the stop-the-military-sequester campaign, Gates and Mullen are completely silent on how it should be done if a sequester is the wrong way to do it. They want the deficit reduced but they don’t want military spending to suffer in the process.

I’m on the record with the notion that the sequester spending cuts for both domestic and military appropriations scheduled to happen in January are (1) the wrong fiscal policy, (2) the wrong way to cut appropriations and (3) the wrong programs to be cutting. (See below for what I’m suggesting as an alternative.)

But my problem with what Gates and Mullen said, and what many of the Pentagon contractors keep saying is that their position is significantly less credible because they so far have refused to provide an alternative that in their view would be the right way. Should it be done over a longer period of time? Involve different parts of the budget? Include a reduction in personnel?

That refusal makes Gates, Mullen and the rest of the military spending community no different from those who say that the budget can be reduced by cutting waste, fraud, and abuse without being willing to identify anything in the  budget that is wasteful, fraudulent, or abusive. Or it makes them part of the make-someone-else-suffer-because-my-spending-can’t-be-touched-ever wing of American politics.

In other words, by saying that the sequester is the worst way to cut the budget without providing even a hint of an alternative, Gates and Mullen et al have to be seen for what they really are — defenders of the status quo who are as much a part of the problem as the politicians about which they’re complaining.

(Note…For those of you asking to hear my alternative to this January’s sequester…as I said here, along with the rest of the fiscal cliff policies, the sequester spending cuts are the wrong fiscal policy at the wrong time and my preference is that they just be canceled. The spending caps for fiscal 2014 and beyond should be kept in place until we get a clearer picture of how the economy will be performing at that time.)

Your reading assignment is this great piece in the New York Review of Books by Jacob Hacker and Paul Pierson entitled What Krugman & Stiglitz Can Tell Us. There’s a lot to it, but I homed in on this particular piece:

A majority of Americans have consistently told pollsters that creating jobs is a much higher priority than tackling the deficit. And when asked how deficits might be reduced, the public strongly endorses increasing taxes on the wealthy and cutting defense spending. The problem is not that these ideas couldn’t guide policy. It’s that they have almost no political traction in Washington. The most influential Republican budget plan—the blueprint put forward by Representative Paul Ryan and given even greater prominence by his selection as Mitt Romney’s running mate—would do just the opposite of what most people say they want. The plan would add to the Bush tax cuts for the wealthy; increase, rather than cut, defense spending; and enact huge cuts in social programs for the poor and middle class, including Medicaid and Medicare. These are changes that polls show Americans (including, at least with respect to Medicare, even Tea Party supporters) strongly oppose.

While the Ryan budget is at odds with the stated priorities of the majority of Americans, one group appears quite supportive of its general thrust—the superrich. Most polls reach few if any extremely wealthy Americans. But thanks to a pilot poll recently commissioned by a team of political scientists, we now know that the very rich are indeed different from the rest of Americans: They place much higher priority on deficit reduction and cutting spending, and much, much lower priority on reducing unemployment.*

This explains most of the wealthy celebrity Villagers (and those who expect to be wealthy, celebrity Villagers in the near future) flogging deficit reduction as if the future of the Republic depends upon it.There’s no mystery as to “what’s the matter with the Village.” It’s class bias, pure and simple.

Read the whole piece, it’s very illuminating.

This thesis fits with this interesting post today about the Chicago teacher’s strike, which featured this memorable quote:

Billionaire wise hobbit Warren Buffet once told school reformer Michelle Rhee that the easiest way to fix schools was to “make private schools illegal and assign every child to a public school by random lottery.” In England, the notion of banning private education—while highly unlikely—has long been a part of the political debate entertained by major-party candidates.

Why did he say this?

Nationwide, where 10% of the nation’s students—and 16% of the white ones from families making more than $75,000 per year—attend private schools, the stratification is similar. White and asian students enroll in private schools at twice the rate of black and hispanic ones, according to Harvard University’s Civil Rights Project. Nearly two thirds of private-school students are from wealthy families. In the nation’s 40 largest school districts, one in three white students attends private school (the number is one in ten for black students).

I’ll just quote Charles Pierce and leave it at that:

I am not flexible about this. If you want to look tough at the expense of public-school teachers, you are a snob or a coward, or perhaps both. Every member of this MSNBC panel that Digby found, including all the liberals and all the Democrats thereon, can bite me, seriously. If I have to read one more smug, Ivy League writer from Slate talking, as the big strike goes on, about public-school teachers as though they were unruly hired help, I may hit someone with a fish.

*The average wealth of those polled was around $14 million; the average annual income was just over $1 million. See Larry Bartels, Benjamin Page, and Jason Seawright, “Democracy and the Policy Preferences of Wealthy Americans,” paper presented at the annual meeting of the American Political Science Association, Seattle, September 2011.

h/t to RK

Each morning, Bill Scher and Terrance Heath serve up what progressives need to effect change on the kitchen-table issues families face: jobs, health care, green energy, financial reform, affordable education and retirement security.

MORNING MESSAGE: The Bogus Brief For Big Banks

OurFuture.org’s Richard Eskow: “[Retired JPMorgan Chase CEO Bill] Harrison’s apologia is as mediocre in its conception, as deceptive in its packaging, as vacant in its morality, and as unimpressive in its execution as JPMorgan Chase itself … ‘A … fallacy,’ writes Harrison, ‘is that large financial institutions have become too complex to manage.’ That’s a shame because, if it’s true, both Harrison and Dimon have lost their best defense for the serial crimes and mismanagement which occurred at JPM under their leadership.”

Uncovered Bain Docs Show “Aggressive” Tax Avoidance

Gawker uploads 950 pages of Bain docs: “…they reveal the mind-numbing, maze-like, and deeply opaque complexity with which Romney has handled his wealth, the exotic tax-avoidance schemes available only to the preposterously wealthy that benefit him … and the deeply hypocritical distance between his own criticisms of Obama’s fiscal approach and his money managers’ embrace of those same policies. They also show that some of the investments that Romney has always described as part of his retirement package at Bain weren’t made until years after he left the company.”

Docs shows Bain employs many “arcane” tax avoidance strategies. ABC: “The private equity firm founded by Republican presidential candidate Mitt Romney made use of arcane techniques in several of its Cayman Islands-based funds to avoid U.S. taxes … ‘The only reason they structure it that way is to avoid tax,” said Rebecca Wilkins, senior counsel with the group Citizens for Tax Justice. “It just confirms what everyone already believes about the tax system — that it’s rigged. That the rules are rigged to favor the well off.’”

NYT finds Romney may be profiting from Bain breaking the law: “Bain private equity funds in which the Romney family’s trusts are invested appear to have used an aggressive tax approach, which some tax lawyers believe is not legal, to save Bain partners more than $200 million in income taxes and more than $20 million in Medicare taxes. Annual reports for four Bain Capital funds indicate that the funds converted $1.05 billion in accumulated fees that otherwise would have been ordinary income for Bain partners into capital gains, which are taxed at a much lower rate.”

Romney hugs Bain in WSJ oped: “A broad message emerges from my Bain Capital days: A good idea is not enough for a business to succeed. It requires a talented team, a good business plan and capital to execute it … My business experience confirmed my belief in empowering people. … My faith in people, not government, is at the foundation of my plan to strengthen America’s middle class … I’m not sure Bain Capital could have grown or turned around some of the companies we invested in had we faced today’s anti-business environment.”

If Obama is so “anti-business,” why did Romney say that “Big business is doing fine”? ABC: “‘We’ve got to make it easier for small businesses. Big business is doing fine in many places – they get the loans they need, they can deal with all the regulation,’ said Romney, speaking to a group of supporters at a private fundraiser in Minnesota. Romney then added that the reason that big businesses are ‘doing fine in many places’ is because they are able to invest their money in ‘tax havens.’ … his remarks tonight sounded similar to those made by Obama in June in which he said the private sector was ‘doing fine.’ … while Romney said tax havens were helping businesses succeed during his remarks tonight, the candidate’s own personal finances have come under scrutiny after it was revealed that some of his investments were placed in offshore accounts in the Cayman Islands.”

Romney Unveils Energy Plan Written By Oil CEOs

Romney energy plan a “radical shift” written with the help of the oil industry, reports NYT: “Giving states control over the energy resources on millions of acres of federal lands would be a radical shift from decades of policies under both Democratic and Republican presidents, dating all the way to Theodore Roosevelt, who first set aside vast tracts of territory to preserve wildlife … An individual close to the Romney campaign said that Mr. Romney’s staff drafted the proposal in consultation with industry executives, including Harold Hamm, an Oklahoma billionaire who is the chairman of the campaign’s energy advisory committee and chief executive of Continental Resources, an oil and gas driller.”

And it can’t realistically be done, says Politico: “Asked if the United States could ever reach energy independence, Alex Flint, a nuclear energy industry official and former top Senate GOP aide, replied that such a plan wouldn’t rely so heavily on oil … While giving states greater control over drilling on federal lands is an idea long advocated by conservative lawmakers, mainly from the West, it’s also sure to run into a groundswell of opposition from Democrats, including the kinds of moderates Romney would need to build a working coalition … Romney’s plan calls for North American energy independence, but that relies on two countries he wouldn’t have authority over even if elected.”

“Romney’s Energy Plan Ignores the Success of Solar and Wind” argues Bloomberg edit board.

Ryan Has Crazy Ideas Not Backed By Numbers

NYT’s Paul Krugman details the fundamentally crazy Ryan beliefs: “In pushing for draconian cuts in Medicaid, food stamps and other programs that aid the needy, Mr. Ryan isn’t just looking for ways to save money. He’s also, quite explicitly, trying to make life harder for the poor — for their own good … he declared that he always goes back to ‘Francisco d’Anconia’s speech on money’ [the part of "Atlas Shrugged" that] denounces the notion of paper money and demands a return to gold coins … What does it say about the party when its intellectual leader evidently gets his ideas largely from deeply unrealistic fantasy novels?”

TNR’s Timothy Noah shows how Ryan uses funny numbers: “…Ryan said: ‘Defense spending is not half of all federal spending, but it’s half of the cuts approximately in the sequester’ … but [defense spending] more than half of all discretionary spending. And discretionary spending was the only spending included in the sequester; entitlements, which is where the big non-defense spending lies, were excluded.”

Breakfast Sides

After beating back SEC, money market funds still face possible regulation from Fed. Bloomberg: “Fed Governor Daniel Tarullo has said the central bank could tighten rules on banks’ borrowing from money-market funds, and Boston Fed President Eric Rosengren has said officials have the option to force banks to back their money funds with capital. The Fed and the Treasury could also work through the Financial Stability Oversight Council, a new regulatory panel formed under the Dodd-Frank Act, to seize oversight of money funds from the SEC and grant that power to the Fed.”

Midwest wells drying up from drought. NYT: “Gov. Jay Nixon of Missouri has moved aggressively to provide relief to farmers whose wells have run dry, allocating more than $25 million in state aid to either improve the wells or help farmers get water by other means.”

“Corporate Profits Rebound But Household Income Falls” reports ThinkProgress: “…household incomes have fallen behind, dropping nearly five percent from June 2009 to June 2012 … Corporate profits are at record levels, reaching an all-time high of 11 percent of the nation’s gross domestic product in July. But instead of re-investing that cash into jobs that will help the economy recover, corporations are sitting on cash