Greg Sargent is reporting tha the White House says they will make sure that the Chained CPI sell-out won’t hurt the most vulnerable seniors. I don’t know if they are basing this on the Simpson-Bowles formula, but if they are, it’s bullshit:

As part of deficit-reduction negotiations, some policy makers have proposed switching to the chained consumer price index (CPI) to calculate the cost-of-living adjustment (COLA) for Social Security and other programs. The chained CPI would lower the annual COLA, reducing the value of Social Security benefits more and more over time. It is not a more accurate measure of inflation for the elderly – and it would be especially harmful to women, because on average they live longer than men, rely more on income from Social Security, and are already more likely to be poor.

Recognizing that the chained CPI targets the oldest, poorest Americans, some deficit-reduction plans propose an increase in Social Security benefits for long-term beneficiaries in an attempt to mitigate the cuts from the chained CPI. This analysis examines how effective the “20-year benefit bump-up” proposed in the Bowles-Simpson Fiscal Commission report would be in protecting the typical single elderly woman – a woman with an initial benefit of $1,100 per month, the median benefit for single women 65 and older – and other vulnerable beneficiaries from the impact of the chained CPI.

• The cut from the chained CPI would reduce her monthly benefits by an amount equal to the cost of one week’s worth of food each month at age 80. She would still have two years to wait before receiving any help from the bump-up.
• The Bowles-Simpson bump-up would restore her monthly benefits to current law levels for only two years – and then benefits would fall behind again.
• By age 95, the cut in her benefits would equal the cost of three days’ worth of food each month.

Take a look at those dollar amounts. Is there any good reason we are even thinking about cutting benefits instead of raising them? On what planet does anyone think that people who have that kind of money don’t need every last cent just to keep a meager meal on the table.

Here’s a little contrast for you:

Durbin is out there saying this is too heavy a lift for the Democrats. Pray he’s right. Or better yet, call your Senator of either party and tell him or her that you are adamantly opposed to cutting Social Security benefits. It’s shocking that you should have to do it, but considering the language of the last campaign it shouldn’t be surprising:

EHRER: All right? All right. This is segment three, the economy. Entitlements. First — first answer goes to you, two minutes, Mr. President. Do you see a major difference between the two of you on Social Security?

OBAMA: You know, I suspect that, on Social Security, we’ve got a somewhat similar position. Social Security is structurally sound. It’s going to have to be tweaked the way it was by Ronald Reagan and Speaker — Democratic Speaker Tip O’Neill. But it is — the basic structure is sound.

Here’s what I wrote about that the day after that debate:

Now they are talking about “tweaking” the way benefits are calculated, which will probably hit the baby boomers, mostly women, who manage to live the longest, the hardest. Of course, if they don’t fix that once they see the misery they’ve caused among the oldest and most vulnerable part of the population, the oldest Americans of the next generation will suffer just as much.

These “tweaks” always look unexceptional on paper. But if you are one of the millions of people who are looking at a very meager income in your elder years, barely enough to survive really, a “tweak” becomes a life-threatening blow.

The problem with this entire conversation is that Social Security is already inadequate. It’s barely enough to keep the elderly out of grinding poverty and compared to other industrialized nations it’s a joke. Benefits need to be raised not cut. But the grand success of the relentless fear mongering from deficit fetishists like Alan Greenspan and Pete Peterson over the years is that the entire conversation revolves around the idea that the system is so unstable that the only possible “compromise” is to agree to “tweak” benefits and pare them back over time — until the system loses its essential value to the American people and they can finally turn it into an investment vehicle.

The president says he’s ready to “tweak.” And we know that Mitt Romney can hardly wait to take a meat ax to it. If he were to win, I’m guessing the conservative Democrats in congress would rush to jump on his bandwagon. (They certainly always have before.) So, it would appear that your best chance is to vote for progressives who will stand up to either Romney or Obama when it comes to Social Security.

And we got some in. Unfortunately, they aren’t in the congress yet. On the other hand, you can still call your congressional Rep and Senator of either party and tell them that you do not want cuts to Social Security. There may be enough fear of the rickety third rail left out there to stop this.

Poll after poll has shown that the public rejects the millionaire-oriented, tax-cutting, government-slashing austerity plan known as “Simpson Bowles.” And yet politicians in both parties keep trying to force it through the legislative process under the banner of a “Grand Bargain.” Word is they’re going to try again, either during the lame-duck session or when the new Congress convenes in January.

That plan was originally called “Bowles Simpson,” but its well-financed architects soon ran afoul of the “BS” acronym. But “BS” can stand for something else, too: “bait and switch.” That’s exactly what they’ll be doing if politicians force a “BS” austerity plan on the public after the votes have been counted.

For years voters didn’t even consider the deficit a very important issue. They correctly considered job creation a much higher priority. Now, after years of media hype, some (though by no means all) of the polls say that this issue is a top concern for voters. But voters don’t want any cuts in specific programs – except defense.

That’s always an invitation for politicians and pundits to sneer at the ignorance and illogic of the electorate. But economic analysis supports the voters, not the insiders, on this one. It makes a lot more sense to raise taxes on the wealthy now, invest in jobs and growth, and pivot to deficit concerns once the economy’s growing at a healthy clip.

Polling in 2010 showed that a large majority of voters, including 75 percent of Republicans and 76 percent of self-described Tea Party members, opposed cutting Social Security to reduce the deficit. That’s a key Simpson Bowles provision (although they’ve tinkered with the wording after being battered in the polls.) And seventy percent of voters polled were either “somewhat” or “highly uncomfortable” with the Simpson Bowles plan when it was released.

They may get it anyway.

The politicians who are pushing a “Grand Bargain” object, of course, when their “Simpson Bowles” recipe is described as “pro-millionaire” or “anti-tax.” Bill Clinton, one of this austerity program’s most aggressive salespeople, even brought the Democratic Convention crowd to its feet when he mocked Mitt Romney for saying he’d make up for his millionaire and billionaire tax cuts with unspecified “revenue enhancements” at some future date.

But that’s the same thing the Simpson Bowles plan would do. One of the key features of this so-called “deficit reduction” plan is a cut in top tax rates for the wealthy and ultra-wealthy, accompanied by what they describe as “tax reform and simplification.” Ask yourself: Why would anyone offer tax cuts – or tax”simplification,” for that matter – in a deficit reduction plan? It makes no sense, unless …

… unless it really isn’t a “deficit reduction” plan at all.

Sure, they say they’ll make up the lost revenue by eliminating unspecified tax breaks. But, as with Romney’s plans, there aren’t any tax breaks big enough to make the difference. In order to offset the increased deficits caused by these cuts they’d have to gut tax exemptions that are vital for the middle class, like the cuts that fund employer-based health care. Child deductions and home mortgage interest would also be on the chopping block.

But why would a deficit plan make its own job harder? The answer is, it wouldn’t – unless its real agenda was anti-government and pro-millionaire, not anti-deficit and pro-majority.

Far-right politicians like Mitt Romney and Michele Bachmann are merely reading from a prepared script when they claim that deficit reduction is a moral issue. ” It is simply immoral in my view,” Romney said last year, “for us to continue to rack up larger and larger debts and pass them on to our kids, knowing full well that we’ll all be dead and gone before it’s paid off.”

“This is a moral issue,” Bachmann said about deficit reduction in a recent debate. “We can’t go down the path that we’re in.” (I think she meant “path we’re on,” but never mind.)

Bachmann’s staked a position to the right of the Simpson Bowles austerity plan – essentially advocating for no government at all – while her Democratic opponent unfortunately embraced the right-wing proposal. It’s a sign of the times, and of our broken political system, that there are so many races in which neither candidate is expressing the view of the most voters – and often of the majority in both parties.

And it’s a sign of American journalism’s weakness that nobody’s asking candidates like Romney and Bachmann questions such as: If it’s immoral to saddle our young people with these debts, why won’t you raise taxes on people like yourselves Or, If it’s immoral to saddle young people with debt, how can it be moral to cut education funding and deny them the chance to better themselves?

Thankfully, some Democratic candidates are pushing back on the austerity groupthink. New York Sen. Chuck Schumer pushed back on the growing and misguided consensus by stating what should have been obvious. ““These promises of lower rates amount to little more than happy talk when the math behind them doesn’t add up,” said Schumer, adding “… you can’t have your cake and eat it too.”

But the cake-eaters have been crowding the dessert table. They’ve been especially vocal on Social Security – another issue that has no business in a deficit plan, since it’s forbidden by law from adding to the deficit. Virginia Senatorial candidate Tim Kaine had the common sense to point that out, and said specifically that he would reject the Simpson Bowles plans for cutting its benefits. Kaine also observed that the replacement of Medicare with vouchers in the GOP’s Congressional budget is “not a cost-saving, but a cost-shifting plan.”

The problem with the Simpson-Bowles deficit hustle is that it’s always a “cost-shifting plan.” Cuts in Federal spending inevitably lead to increased spending at the state level (as has happened with education), to increased out-of-pocket costs (which will happen with Simpson Bowles-style Medicare cuts), or to the greatest and most tragic expense of all: the loss of a productive human life, sacrified to cuts in education or jobs.

No less a personage than Vice President Joe Biden offered a “flat guarantee” that there would be no changes to Social Security, while talking with a group of Virginia voters. He might want to have a conversation with his boss, since the President has needlessly offered to include Social Security cuts in deficit deals.

But the President’s recent comments on deficit reduction were almost holographic in their ambiguity. “If I’ve won,” the President said, “then I believe that’s a mandate for doing it in a balanced way.” Does that mean he’d consider his victory a “mandate” to cut deficits, or to ensure it’s done in a balanced way? It sounds like the latter, but it’s not clear.

It’s unfortunate that the President isn’t clearer and more forceful on this issue, but one thing’s for certain: While he mentions “Simpson Bowles” often, he’s not running on an unequivocal program of cuts to Medicare and Social Security, drastic reduction in other forms of government spending, and lower taxes for the wealthy.

And that is Simpson Bowles.

Nobody – nobody – is running on a straight Simpson Bowles ticket. That’s because it’s as toxic politically as it would be economically, were it to become law. It would make a mockery of the democratic process to impose this austerity plan on voters who were never given the chance to vote for – or against – it.

Originally posted at Capital Gains and Games.

Bruce Bartlett emailed me to say that, rather than cancel the sequester as I recommended, we should get the band back together and reconstitute the anything-but-super committee to give it another chance to come up with a deficit reduction plan.

Sorry, Bruce…But I just don’t see the need to go there yet again.

How many federal budget commissions, special committees, advisory groups, and private negotiations do we need to fail before we admit they don’t work? Think about just the past few years: The Biden-Cantor negotiations, the Obama-Boehner summit negotiations, the B-S (that is, Simpson-Bowles) commission, the anything-but-super committee, the gang of six — fail, fail, fail, fail, fail.

Again? Really?

What about the politics of the current situation is different enough from the last time the anything-but-super committee met and failed that makes anyone think a compromise on taxes and Medicare is more likely? Yes, the sequester that was more than a year away when the committee failed the last time is now only several months from happening. And, yes, the military spending community is far more active now than it was before in opposing at least the Pentagon portion of the sequester.

But a super committee sequel (“The Deficit Strikes Back”?) would have to be given several months and would report after the election during the lame duck session of Congress. Not only would that be a very tight timetable that would be hard to meet, reporting after the election would take away much of the influence the defense spending community would have on the negotiations.

In other words, the sequester would still be the most likely outcome.

And…I don’t see how another super committee is going to make the GOP any more likely to compromise. To the contrary, my expectation is that a Romney loss, a failure to take over the Senate or a loss of seats in the House — any one of which seem plausible at this point — is going to result in Republicans being less rather than more likely to compromise on budget issues. It’s not at all hard to imagine the tea party wing of the party insisting that any of those failures happened because Republicans were not steadfast enough in their opposition to tax increases and not insistent enough on spending cuts.

In other words, the election is far more likely to result in the GOP doubling down on its tax and spending intransigence rather than the kind of kumbaya moment that would be needed for a reconstituted super committee to actually be super.

Both political parties have “an aversion to telling the truth,” says The Washington Post. The truth? That newspaper’s editors are part of a small but powerful billionaire-funded circle that seems to believe that any facts which don’t support their distorted and unpopular ideas are deviations from the “truth.”

With a few selected phrases, President Obama and former President Clinton appeared to endorse this tiny faction’s recovery-crushing austerity approach last week in Charlotte. But the rest of their speeches, along with others given at the convention, were a strong rejection of the privately-authored set of policy proposals known as “Simpson-Bowles.”

That’s good, since Simpson-Bowles so closely resembles the Republican Party Platform that the Democrats could wind up running against themselves.

Voters should embrace the Democrats’ stirring anti-austerity rhetoric. They should also encourage Democratic leaders to embrace their own rhetoric, to stop ‘triangulating’ themselves into invisibility and speak plainly and directly to the American people:

In other words, Democrats should say they oppose any cuts to Medicare or Social Security benefits. They should say they’ll use government resources to create and protect the jobs we need – for teachers, firefighters and police officers, among others. And that the face facts and address the real cause of the government’s long-term budget deficit.

The Circle

The “truth”? To paraphrase Jack Nicholson in “A Few Good Men,” the members of this circle can’t handle the truth.

But then, contradiction is their stock in trade: They call themselves “bipartisan,” though their views are opposed by majorities in both parties. They call themselves “civil,” although they engage in relentlessly ad hominem attacks on their critics. They call themselves “truth-tellers,” although all but the most extreme and ideological economists reject their ideas. And they insist that they’re the only ones displaying “courage,” as if advocating for the rich and powerful has ever been the brave thing to do.

Who are they? They’re the small group of politicians, ex-politicians, consultants and advisors who are closely connected to anti-government billionaire Pete Peterson. Several of them were appointed to the President’s Deficit Commission, in what is most generously described as a colossal error in judgment.


This small but well-funded cadre has convinced a number of key media outlets, chief among them The Post, that long-term government deficits are our chief problem—this in a time of growing wealth inequity, wage stagnation, declining consumer confidence, and the widespread human anguish that has been brought on by extraordinarily high (and extraordinarily long-term) unemployment.

The Editors

You’d think the Post would change up its editorial positions once in a while, if only to avoid the appearance of being a house organ for the crowd that’s pushing low tax rates for millionaires and billionaires while advocating cuts to Medicare and Social Security for everyone else. But they can’t seem to help themselves.

They “can’t recall a single hard truth the politicians told us” at the conventions, the paper’s editors wrote this weekend. Which “truth” went untold and un-”hardened”? “The national debt,” say the Editors.

And yet Obama mentioned the national debt, his “bipartisan debt commission,” and the “deficit” (our annual shortfall) quite a few times. Biden mentioned the national debt too. And Bill Clinton devoted five or ten minutes to the subject in the “arithmetic” portion of his speech.

The Democrats’ emphasis on debt reduction was, in our opinion, misplaced—at least while the country struggles through a jobs and wage stagnation crisis. But the Editors are wrong to claim it wasn’t mentioned.

Then again, to this crowd the “truth” only seems to mean one thing: their truth, and their program.

The Program

This small circle is pushing a clear, simple program: Even lower tax rates for corporations and the wealthiest Americans. Benefit cuts to Social Security, along with changes to Medicare that (especially in today’s political climate) would cause its slow deterioration and eventual collapse. Limits on how much money the government can spend, irrespective of the need at any given time.

If you think that looks a lot like Paul Ryan’s budget, which is now the GOP’s official budget, or like the Republican platform, you’re right. Even the GOP’s lower tax rates for millionaires and billionaires are in the Simpson-Bowles proposal.

Is that what President Obama was endorsing when he said these words? “I’m still eager to reach an agreement based on the principles of my bipartisan debt commission.” (That commission actually deadlocked and failed to issue any conclusions; he is referring to a document which was privately prepared by Simpson and Bowles, its two co-chairs.)

Or what Bill Clinton was endorsing when he spoke of “the kind of balanced approach proposed by the Simpson-Bowles Commission, a bipartisan commission (sic)”? (Clinton was endorsing an approach that depends twice as much on cuts as it does on tax increases for the wealthy; that doesn’t sound “balanced” to us.)

Only Joe Biden kept a slight distance from the Simpson/Bowles proposal, suggesting only that it came from a “respected” source. Said Biden: “They rejected every plan put forward by us, by the bipartisan Simpson-Bowles Commission (sic) they referenced or by any other respected group.”

Equal Time

The Simpson-Bowles tax plan is very similar to the one Bill Clinton was mocking last week when he talked about those unspecified “I’ll tell you after the election” loopholes President Obama made fun of this policy too: “Have a surplus? Try a tax cut. Deficit too high? Try another.”

Joe Biden said “President Obama knows that creating jobs in America, keeping jobs in America, bringing jobs back to America is what the president’s job is all about.” And that was after his moving tribute to his wife’s work as a teacher – which is, after all, a government-funded job.

And just two weeks ago Joe Biden told some older voters in a Virginia diner that he could “flat guarantee” there would be no changes to Social Security if he and the President were re-elected.

So why did the President, former President Clinton, and Vice President Joe Biden all name-check Simpson-Bowles last week?

The Inkblot

You’ll have to ask them. But maybe the plan has become a kind of political Rorschach test, a shapeless inkblot meant to conjure up “reasonableness.”

There is a slightly fluid element to the otherwise far-right proposals made by two individuals, Alan Simpson and Erskine Bowles, after their commission ended in deadlock and failure. (You wouldn’t know it by reading their document, but the commission never issued a report).

The Simpson/Bowles proposal does, for example, say this: “Don’t disrupt the fragile economic recovery. We need a comprehensive plan now to reduce the debt over the long term. But budget cuts should start gradually so they don’t interfere with the ongoing economic recovery. Growth is essential to restoring fiscal strength and balance.”

It also says: “Protect the truly disadvantaged. We must ensure that our nation has a robust, affordable, fair, and sustainable safety net.”

And the proposal also reiterates the need for additional tax revenue – even though it would do so through some unspecified “loophole closing” sleight of hand that would almost certainly hit the middle class much harder than it would wealthy Americans. Under Simpson/Bowles, billionaires would see their already rock-bottom tax rates (35 percent, compared with 91 percent under Dwight Eisenhower) reduced even further to 27 percent.

(Another Simpson/Bowles scenario would eliminate the even lower rate on “hedge fund” management fees and capital gains – but in return it would lower the top tax rate to 23 percent!)

The Problem

Contrary to what the Circle would have you believe, only one issue is driving our government’s long-term deficit problem, and it isn’t Social Security: It’s Medicare. Unfortunately, fixing that problem would require a complete overhaul of our profit-driven health care system.

Simpson and Bowles basically throw their hands in the air. Their plan’s hodge-podge of suggestions implicitly says “we have no idea what to do about Medicare.” Instead, in what looks like the policy equivalent of throwing an entire deck of cards on the floor and saying “pick one,” they toss out a grab bag of unrelated ideas.

One of those ideas is “an all-payer system,” where government (or insurers, acting together) would establish uniform reimbursement rates for all medical providers. That’s an ace in the deck, and the Democrats should grab it. While they’re at it, if they’re serious about deficit reduction they should go one step further and come up with an even more effective cost-cutting proposal: Revive the public option they traded away during dealings over the health care bill.

In the end, the guaranteed solution to our Medicare cost problem—which is our deficit problem—is “Medicare For All.” But we’re told that this approach isn’t “politically feasible.” It would certainly take “courage,” which may be why we haven’t heard Alan Simpson, Erskine Bowles, or the editors of the Washington Post pushing for it.

Guess they have “an aversion to telling the truth.”

The Race

Did the Democrats embrace their opponents’ platform when they embraced “Simpson-Bowles,” which they misleadingly presented as the work of a “bipartisan commission”? Were they playing some sort of deep game, counting on their opponents to be intransigent so they can appear reasonable?

Or were they making the decision to run on a platform of benefit cuts to Social Security and Medicare? That would be political suicide, and a grim harbinger of things to come under a second Obama term.

If that’s the case then voters, especially Democratic ones, have an opportunity and an obligation: They should inundate the White House with phone calls and emails asking the Democrats to declare their unequivocal support for the Democratic portions of their convention and pre-convention speeches: Job creation, “fair share” taxation for millionaires and billionaires, and defending Social Security and Medicare benefits from that small circle who will go to any lengths to cut them.

But the race is on, and the finish line is within sight. If voters are going to persuade the White House to make a course correction, they’d better do it soon. One thing is clear: If Democrats don’t do a better job distinguishing themselves from the GOP than they did in 2010, they’ll get the same outcome.

Obama isn’t enjoying that bump because a few people mentioned a “Simpson-Bowles” plan. The bump came from talk about jobs, protecting Social Security and Medicare, and asking millionaires to pay their fair share. Call it what you want, but the right economic plan is also a winning political platform.

But the Simpson-Bowles plan, even if it’s presented as “Austerity Lite,” will hurt the Democrats. And it will spell disaster for people who depend on Social Security or Medicare, people who need a job, or … well, for pretty much everyone. American voters want these programs protected. They’ve rejected the austerity economics that’s currently wounding Europe. And they appreciate it when someone represents their interests.

The party that speaks for these voters will find better rewards than anyone else can offer – even the billionaire-funded insiders who make up the Circle and want to leave the rest of us in a hole.

It had to happen sooner or later: Jamie Dimon, the bank CEO who’s become the public face for our greedy and corrupt banking system, is openly backing the austerity plan pushed by former Senator Alan Simpson, the arrogant and abusive voice of our country’s bought-and-sold elite “bipartisan” consensus. Will the Democratic Party led by Barack Obama stand up to that corporate consensus, or submit to it?

The “Simpson Bowles” plan is designed to force the American people to pay for the wealth, greed, and criminality of the banking class that Jamie Dimon has chosen to represent. The day after Dimon’s testimony another institution announced that it was planning to impose the Simpson Bowles austerity plan on us: the Presidential Administration of Barack Obama, as represented by Treasury Secretary Tim Geithner.

What did Jamie know?

The Senators dutifully made a show of their concern about JPMorgan Chase’s multibillion dollar losses. They were shocked – shocked! – that gambling was gong on in his establishment.

That hearing should have focused on the need for tougher bank regulations, which Dimon has been vigorously fighting, and on the epidemic of criminal behavior and mismanagement within his own bank. The Senators should have grilled Dimon on the disparity between his public statements about his bank’s financial conditions and risk controls and what we now know was really going on behind the scenes.

It’s not only wrong to intentionally make misleading statements of that kind – it’s also a crime. Yet the Senators never raised the question that should have been at the core of their hearing:

What did Jamie know and when did he know it?

The Committee never asked Dimon about his statement that the unit behind these trades, the “CIO,” had been using a “new risk management model” that reduced its daily risk of potential losses by nearly half – from $167 billion under the old model to $67 billion.

The Committee didn’t ask Dimon why this change, which was never announced publicly, didn’t constitute a material misrepresentation under securities law.

The Committee didn’t ask Dimon to elaborate on reports that the CIO unit reported to him directly, bypassing the usual chain of command.

The Committee didn’t ask Dimon about reports that he personally approved the trades in question.

The Committee didn’t ask Dimon about the many documented crimes committed by the bank under his leadership – crimes that have led to billions of dollars in settlements.

The Committee didn’t ask Dimon whether he could reassure them that the crimes have stopped.

The Committee didn’t ask Dimon whether he would cooperate with authorities to make sure that the people who committed these crimes within his organization are brought to justice.

The Committee didn’t ask Dimon about his own legal obligation under Sarbanes-Oxley to affirm that all risk controls and anti-fraud measures are in place and adequate.

The Committee didn’t ask Dimon why he should be considered an expert on effective banking with a track record of this kind.

The Committee didn’t ask Dimon for more details on the “clawbacks,” or revoking of past bonuses, he said the bank would impose on some executives. And they didn’t ask whether his pay would be clawed back too, since the unit reported directly to him and he reportedly approved the trades.

The Committee didn’t ask Dimon how that or any other reasonable measure could be taken against a bank CEO who also holds the position of Board Chair, thereby making it impossible for shareholders to rebuke or restrain him, or why regulations should not forbid a dual role which gives a banker such unrestrained power.

The Committee didn’t ask Dimon what he meant when he said that “some issues” about the multibillion-dollar loss had already come to light when he told investors and analysts that it was a “tempest in a teapot” on an April 13 phone call, and whether this was a deception that rose to the level of investor fraud.

The Committee didn’t ask Dimon why he continues to call the CIO’s trades “hedges,” which are in effect a form of insurance against adverse changes in the business environment (the classic example of a true “hedge” would be an airline that buys oil derivatives to protect itself against the losses it would experience if fuel prices soared unexpectedly), when the CIO’s bets appear to be much more like gambling-style hedge fund behavior. (Sen. Merkley tried to ask him, but was flummoxed by the five-minute rule and his servile colleagues).

The Committee didn’t ask Dimon how anybody, much less Jamie Dimon, could argue against stronger regulations after a fiasco like this one.

But then, why would they? As George Zornick reportes, almost all of the Senators on the Banking Committee have received campaign contributions from JPMorgan Chase.

Closed-Captioned

The hearing should have been conducted with closed-captioning for the morally unimpaired, so that the real meaning of the questions and of Mr. Dimon’s answers was clear to the audience. Unfortunately that closed captioning would have bordered on the obscene, since 90 percent of Dimon’s responses would have led to a caption that read “I own you b*tches, so let’s get this over with.”

Senaors Jeff Merkley and Bob Menendez tried to challenge Dimon, but were boxed in by the five-minute limit given to each Senator for questions and answers. Merkley asserted that JPMorgan Chase wouldn’t have survived without the taxpayers’ bailout. He’s almost certainly right, but Dimon was allowed to repeat his assertion that JPM didn’t need the money and only took it at the government’s request “so that the other banks would take the money too.”

How did the Republicans do? Sen. Jim DeMint reassured Dimon that his colleagues “can hardly sit in judgment of your losing $2 billion.” (The figure is actually $3 billion now, according to Dimon’s reckoning, and possibly much more: But then, who’s counting?) “”You’re not located in my state,” said Sen. Mike Johanns of Nebraska, “and I doubt that you’re probably considering locating in my state, although it’d be a great place for you to do business.” Sen. Bob Corker of Tennessee just wanted to sit at the feet of the master: If you were sitting on this side of the dais, what would you do to make our system safer?”

The role assigned to Republicans is that of openly servile solons who make no secret of their eagerness to serve at Wall Street’s beck and call. “Washington exists to serve the banks,” said Rep. Spencer Bachus of the House Banking Committee, “not the other way around.” How did the Democrats fare?

Merkley and Sen. Bob Menendez of New Jersey struggled against the limitations imposed by the five-minute rule and their colleagues’ servility. For the rest of them it was lob balls all the way. Dimon was allowed to strut, preen, and pontificate with an airly of thinly-disguised contempt – an emotion that was well-earned on Wednesday.

Tell you what, Jamie: You can be on our bank’s board if we can be on yours.

Not a single Senator asked Dimon about the propriety of his seat on the Board of the New York Gederal Reserve. JPM received $48 billion in secret, direct emergency loans, and it also benefited from the $107.3 billion in loans given to Morgan Stanley.- and that all of that money was given to Dimon’s institution while he held a power position on the Board of the New York Federal Reserve, and on the committee that decides the Fed’s executives salaries and other compensation.

The Federal Reserve was created by an act of Congress. It is our bank, not theirs. Yet its boards are dominated by the very bankers that benefit from its generosity – which is ultimately our generosity. The Committee didn’t ask Dimon about that either.

Not a single Senator raised the obvious question: We bailed out JPMorgan Chase. So why don’t we have a seat on your board, instead of the other way around?

What does Jamie know?

“This is not your hearing,” Sen. Merkley told Dimon. The good Senator was sadly wrong. It was Dimon’s hearing, and never more so than at the end, when he was given the opportunity to pontificate about the US economy. That’s a subject he understands even less than legitimate finance. That’s when he gave his pitch for Simpson Bowles, as Dana Milbank reported.

“If we had done something remotely like Simpson-Bowles,” Dimon said in response to Sen. Michael Bennet, D-Colo., at the end of the hearing, “you would have increased confidence in America. You would have shown a real fix of the long-term fiscal problem. I think you would have had … a more effective tax system that is conducive to economic growth.”

This is the common hoax: That more “trickle-down economics” would spur the economy, and that investor confidence would rise under austerity pollcies and bring the entire economy with it. How’s that working’ out for ya, Europe?

That wasn’t Dimon’s only pitch, of course. He also repeated his efforts to leave badly-managed and criminally-inclined organizations like his own free to operate without adult supervision – that is to say, unregulated. He complained about the complexity of Dodd-Frank, saying “I would prefer a simple, clean, strong regulatory system with real intelligent design, and that’s not what we did. We created a really complex [set of rules]… And it’s not clear to me who has the responsibility or the authority.”

What Dimon didn’t say is that the complexity was only created because Washington chose to allow too-big-to-fail banks like his to keep existing. There’s a simple, common-sense solution that doesn’t require all the red tape: Break them up. But to accommodate Mr. Dimon and his peers, lawmakers chose instead to create some mild safeguards to reduce the likelihood that we’ll have to bail the banks out instead.

But his Simpson Bowles testimony was the centerpiece of his platform this week. That closed-captioning system would have read like this: We can no longer afford to pay your Medicare costs, and we want your Social Security trust fund for other purposes, because guys like me ruined the economy and the only other way to restore our society is by asking us to pay our fair share in taxes. And trust me, as long as I’m writing checks to the guys I’m looking at right now, that ain’t gonna happen.

Not a single Senator asked Dimon why anybody would listen to the economic advice of anybody with a track record like his.

Dimon and Simpson

Ashford and Simpson were the songwriting duo that sang “Ain’t No Mountain High Enough.” Dimon and Simpson are the corporate-politics duo that want to give us “Ain’t No Austerity Grim Enough.”

Alan Simpson is the former Republican Senator, who is now retired and enjoying a fat pension from the American people whose retirement security he has dedicated his remaining years to destroying. He’s funded by right-wing billionaire Pete Peterson, who has also co-opted leading Democrats like Bill Clinton into his miserly efforts.

Simpson employs a variety of tools on behalf of the “bipartisan” power elite’s agenda, most notably obscenity, dishonesty, and personal abuse. His last venomous outburst was directed against Nancy Altman and Eric Kingson of Social Security Works (with whom I’ve had a very pleasant working association).

Nancy and Eric are two of the most courteous and thoughtful people I know, and Simpson’s snarling personal attack on them stands in stark contrast to their own civility. Simpson, of course, served as the co-chair of President Obama’s “Deficit Commission” – which addressed Social Security, too, even though Social Security doesn’t contribute to the deficit. And the President who routinely chastises other for failing to disagree in a civil manner has yet to rebuke Simpson for his discourtesy.

Simpson’s (relatively) silent partner is Erskine Bowles, the Clinton Democratic insider turned hedge fund millionaire.

Geithner’s Path

And then there’s Tim Geithner, who said on Thursday that the right economic path “really began with Bowles-Simpson and that’s where it’s going to end.” Geithner said that the President’s Fiscal Year budget “differs in slight–in small respects from that basic framework, [but] is very close to that basic design. That’s the neighborhood in which we’ve planned to govern.”

Geithner said that “the only path to resolution politically [and] growing essentially economically, and I think that’s where it’s going to end up.”

Geithner said Simpson Bowles was the perfect recipe: “tax reforms that raise a modest amount of revenue tied to spending savings across the government that’s still preserving some room to invest in things that matter to how we grow moving forward.” He added, “There’s no plausible way to get there economically or politically without that kind of balanced framework again that marries tax reform with broader spending reforms,”

Geithner is joining leading Democrats on the Hill like Sen. Max Baucus and Rep. Nancy Pelosi in backing the plan. And take careful note of the fact that they’re all using the phrase “tax reform” instead of “tax increases.” They don’t just plan to pay for the wealth and misdeeds of the Dimon crowd with your Social Security and Medicare benefits. They also plan to raise your taxes, not theirs. The Simpson Bowles plan would actually lower the top tax rate for people like Jamie Dimon, while “tax reform” would tax away tax deductions for the middle class’s health insurance, mortgages, and other expenses.

Welcome to Your Corporatocracy

And that’s how things work in our Corporatocracy: They decide, we submit. The Unholy Trio of Dimon, Simpson, and Geithner ride across our national landscape like the Three Horsemen of the Economic, corporate-politics Apocalypse.

This year it’s going to be incumbent on the Democratic Party to prove that it’s something more than the oligarchy’s more genteel rubber stamp. And it’s not going to be able to do that unless it rejects the wildly unpopular and unfair Simpson Bowles plan in favor of the only approach that can rescue the middle class and our economy over all.

But that would involve standing up to Jamie Dimon – and his campaign checks.

At the June 18-20 Take Back the American Dream conference, we’ll organize to stop Simpson-Bowles from passing Congress in the December “lame duck” session. Hear Robert L. Borosage, Van Jones and Melissa Harris-Perry on “Winning in November – So We Can Win in December and Beyond” and hear Rep. Jan Schakowsky, Damon Silvers and Molly Katchpole offer “An Agenda to Win in November–and Prevent a Train Wreck in December.” Click here to register.

***

Chris Matthews had something of a scoop on MSNBC’s Morning Joe program today. He indicated that yet another Democratic leader in Congress has succumbed to the austerity-based political fever that’s decimating that party on Capitol Hill.

He didn’t put it quite that way, of course, but that’s the gist of it. The headline could read something like this:

Yet another Democrat stricken with the dreaded “Simpson Bowles virus.” The subhead could be, “Plague claims latest victim during private conversation with broadcaster. Number of cases may reach epidemic proportions, say experts.”

Springtime in Washington: You can count on austerity fever to strike this town before the last cherry blossom sheds its petals.

That Matthews Magic

Now, I know that the progressive Internet likes to give Chris Matthews a hard time, and not altogether without reason. But I find the guy very likable, warts and all, so I’m not going to go all ad hominem on him. (Hopefully that’s not our style anyway.)

Fact is, Chris was doing great for a while this morning, forecefully and eloquently laying down exactly the kind of advice that President Obama and his party leaders need. Sure, Matthews and the rest off the Joe Scarborough panel slung their fair share of cliches – “Friday was a game change,” that sort of thing – but Matthews was nailing it.

“This election’s going to be about the guy on the mound,” he said, noting our lagging growth rate and terrible job numbers. “He’s not performing out there,” said Matthews, “not the way the voters score this thing. if he can’t change the economic numbers, which he can’t, he’s got to talk about … what he’s up against … how he’s brought back the auto industry, and how he has to do a lot more in public sector investment.”

Then Matthews really hit his stride, saying of the President:

I don’t understand why he thinks small. Why doesn’t he say “Look, we brought back the auto industry. Why don’t we bring back the highways? Why don’t we do what Eisenhower did – upgrade what he did in the fifties? Why is Europe ahead of us on fast rail, the chunnel, the bullet trains …. Why is everything falling apart? Why don’t we invest in our public sector while interest rates are practically zero and there are all these unemployed people out there?”

Matthews added:

“This is a good time to do stuff. Instead he has this pusillanimous highway bill up there on the Hill, and this so-called jobs bill that I don’t even know what’s in it. If they’re going to say no to spam, make ‘em say no to steak. Have a big program, let Congress say no to it, alongside a good debt reduction program down the road.”

Wow, Chris. We don’t think you’ve been reading us, but you’re playing our song.

“He doesn’t seem to have anything on his plate right now,” Matthews added, “and that’s his main problem as pitcher. You don’t think of him as out there pitching.” He even inspired the Republican Scarborough to offer up a riff or two. Scarborough added:

You run straight into the fire, and everywhere you go you say, “You know what. Things aren’t great right now. But if we didn’t do what we did your ATMs would have stopped working. If we didn’t do what we did Detroit would’ve stopped working”

The host concluded with the reasonable observations that “Democrats seem to be afraid to tell people what they believe and what they did.” To which Matthews responded, “How about this? (The President) should say ‘My way is the highway. We’re gonna do it the way Eisenhower did it.’”

I never thought I’d say these words, especially in response to a suggestion that Democrats start kickin’ it Eisenhower style, but: Amen, brother. Amen.

The Dream Is Over

Then Matthews pivoted to policy specifics. “You go over the steps,” he said. “Why didn’t he back Simpson/Bowles?”

Damn it, Chris Matthews! You were doing so well!

The President, said Matthews, could say that Simpson Bowles “does things I hate, but it goes somewhere. Matthews continued:

(The President could say) “It does stuff I don’t like. I hate it, I hate it. But we gotta start somewhere. I got eleven votes (for the Simpson Bowles proposal, which failed to pass within the Deficit Commission). I wish I’d gotten fourteen, but damn it, I don’t care how many votes you got. You got my vote.”He coulda done that.”

Then came the anonymous Congressional leader, of whom Matthews said:

I talked to a leader in Congress yesterday, a Democrat – a moderate Democrat – and he said “The number one thing we could do for the market, for confidence, for the consumer, for the investor, for the retiree, the about-to-be retiree, is a long-term debt reduction plan agreed to by this government. That means the Republicans in the House, the Democrats in the Senate, and the President agree to a deal that we’re going to stick to to reduce the debt.

Finally we heard the closer on Matthews’ Simpson Bowles pitch:

it seems to me that this would be … the greatest gong out there, we’d all hear it and say, “Dammit, those guys can do their jobs.” I know it’s going to be hard before the election. But the President ought to be out there saying ‘I’m first, put me down first, I’m John Hancock, I’m signing on.” And (he should) lead the way on debt reduction, long term, and short-term job creation. Everybody knows what they want done. They want jobs now, and long-term debt reduction.

They do? Let’s think about that for a moment.

By Popular Demand

As US News reported in March, “A Harris Poll found only 12 percent of the public want to see a cut in Social Security, 21 said they want to cut federal aid to education and 22 said they favor cuts federal healthcare programs.”

Simpson Bowles would do all three.

An April poll showed that 79 percent of voters thought it was important to address the jobs crisis, as opposed to 73 percent who thought the deficits were important. And more importantly, when asked by Gallup in January what worried them most, only 16 percent said the deficit. 26 percent said jobs, 10 percent said our continuing economic decline, 6 percent said outsourcing, and 3 percent said Medicare and Medicaid.

When asked in March what they worry about “a great deal,” 71 percent said the economy, 60 percent said the availability and affordability of healthcare, 55 percent said unemployment, and 48 percent said the Social Security system. 60 percent said “Federal spending and the government deficit.”

When you stack up Simpson Bowles against the things it would hurry, that’s 60 percent in favor and 234 against. “Everybody knows what they want done,” all right, and Simpson Bowles ain’t it.

Let Us Count the Ways

Matthews quoted his unnamed Congressional Democrat as saying “The number one thing we could do for the market, for confidence, for the consumer, for the investor, for the retiree, the about-to-be retiree, is a long-term debt reduction plan.” How would that work out for the parties he listed?

The Market: In a little-noted (except by us) development, the stock market actually tanked the last time there was deficit reduction deal. Why? Because government cuts means a smaller GDP and therefore less consumer spending. And less consumer spending means less profits – unless you’re a bank.

The Consumer: Conservative economists believe in a theory which says that government debt discourages spending, because people know that those debts will someday lead to higher taxes so they’d better save their money. But for some reason they don’t believe that people will hold on to their money once they realize the government plans to cut their Social Security and Medicare, which is deeply embedded in the Simpson Bowles proposal.

And they don’t think that consumers will be discouraged from spending, or have their confidence shaken, by the adoption of a plan which will cost the economy a projected 4 million jobs.

The Investor: People are seeing their 401k’s get hammered because there’s no consumer confidence. People aren’t spending – either because they don’t have jobs, or because they’re in an underwater home, or because their wages have stagnated, or because they’re fearful for the future. Often it’s a case of “all of the above.”

As we noted earlier, investors got the living daylights beaten out of them after the last deficit deal. They’d get hurt just as badly when this one was announced, too – and every time another jobs report came out after that.

Retirees and soon-to-be retirees: Simpson Bowles proposes radical cuts to Medicare, and insists on cutting Social Security rather than contemplate raising taxes on the wealthy. Think this’ll turn ‘em on? Talk about a Social Security deal, along with the Medicare reimbursement cuts, help the Democrats lose Congress in 2010.

If this plan becomes law, will people really say “Dammit, these guys can do their jobs”? Or with they say, “Dammit, I just lost mine”?

Strange Medicine

The fact is, the Simpson Bowles plan does nothing to build jobs except delay its draconian cuts by ten months. There’s no stimulus spending in it. And what kind of political naiveté would lead insiders like Matthews and his unnamed House leader (probably Steny Hoyer) to think that Republicans will back any kind of job creation plan?

In practical terms, a sentence like “jobs in the short-term, deficits cuts in the long term” is meaningless when applied to Simpson Bowles. That plan would briefly avoid any direct action to cost the country more jobs, but then would begin to trigger a wave of increased unemployment.

Saying “jobs now, then Simpson Bowles” is like saying “We’ll fix your broken leg today and then amputate it tomorrow.” It makes no sense.

The Wrong Problem

“Long-term debt reduction” isn’t our most urgent problem by a long shot. Our government debt’s been this high before (as a percentage of GDP ) – specifically, it was higher during the World War II and postwar years. Those are the years that finally ended the Depression, and paved the way for those Eisenhower accomplishments that had Chris Matthews waxing so lyrical.

And you know what’s even crazier? Right now they’re paying the Federal government for the privilege of lending it money. That’s right: The Federal government can borrow at negative interest rates, because the world’s investors have so much confidence in the security of an investment in the US Treasury. So why aren’t we borrowing the money we need to rebuild our crumbling infrastructure, educating our kids, and pull ourselves out of this economic quagmire?

We can pivot to debt concerns once our economy’s moving again, and once they’ve stopped paying our government to borrow.

The Sting

When the Simpson Bowles proposal isn’t serving the interests of the wealthy with crackpot logic, it stoops to outright fraud. Its much-vaunted “tax increases,” for example, involve eliminating the kinds of tax breaks that are keeping many middle-class families afloat (like employer health and mortgage interest deductions).

The Simpson Bowles plan to “save Social Security” involves cutting benefits for recipients in 2080 as much as they’d be cut if Congress did nothing at all. Why? To deflect the idea of eliminating the payroll tax cap. (Simpson Bowles merely raises the cap slowly until it reaches 90 percent of all US income – a level it had reached twenty years ago, before income inequality put most of our economic growth above the cap’s reach.)

The Simpson Bowles plan doesn‘t increase taxes for the wealthy – unless you believe that Congress will cut unnamed “loopholes” so much that it more than makes up for SB’s most outrageous feature: It actually lowers the top tax rate for wealthy individuals and corporations.

Simpson Bowles offers only bogus “savings” measures for Medicare. It’s only concrete proposal is to cap spending growth at GDP plus 1 percent – an artificial formula that would soon have seniors stripped of medical care under current health inflation rates. Why didn’t they offer concrete cost-cutting proposals? Because those would require limiting the runaway corporate profits that are devastating our health economy.

Like we were saying: Fraud.

A Party Under the Influence

How did Chris Matthews and his unnamed friend get it so wrong? Self-perpetuating Clinton-era economic blunders are a big part of it. The half-billion dollars that Pete Peterson has spent promoting ideas like this in the last three years along can’t have hurt either. That pays for a lot of ideologically-driven economists – many of them with Democratic pedigrees – peddling nonsense at a lot of seminars, “summits,” and dinner parties.

That’s how the world ends: Not with a bang, but with a whimper – and plenty of hors d’ouevres.

Whatever its source, the Fantasyland Democrats are inhabiting will soon collide with reality – just as it did in 2010, when Republicans ran to their left with a bogus “Seniors’ Bill of Rights.”

Chris Matthews had a scoop, all right: Democratic leaders on the Hill have come down with the same contagious self-deception that’s sabotaged their party so many times before. Once again, the fever’s running high along the Potomac. The folks on the Hill are dropping like flies.

And, frankly, Chris old friend, although we sorta love ya, you’re looking a little peaked there yourself.

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 Tax Evaders Of The 1%

OurFuture.org’s Sam Pizzigati: On Tuesday, the annual federal income tax filing deadline came and went with America’s super rich once again stiffing Uncle Sam for hundreds of billions of dollars in taxes due … The tiny handful of audits the special IRS task force has completed did recover $47.7 million in unpaid taxes. At that recovery rate, if the IRS had completed audits on all the taxpayers making over $10 million, the federal treasury would likely have picked up over $200 billion … why aren’t IRS officials doing more to audit the super rich? … Congress over recent years has consistently declined to adequately fund IRS tax-collection operations.”

Simpson-Bowles Backers Look To Lame Duck

Simpson-Bowles advocates think Obama-Romney debate will increases chances for passage. NYT: “Mr. Romney accuses the president and his party of resisting needed changes in Medicare and other entitlement programs; Mr. Obama insists that Mr. Romney’s opposition to any tax hikes would eviscerate vital government functions … their campaign arguments … could help prepare the public for a compromise as long as the candidates preserve some room for postelection maneuvering … [Yet the] Simpson-Bowles plan was defeated overwhelmingly last month when offered as an alternative in the House budget debate.”

New book reveals divisions within GOP after 2010 elections. W. Post: “The freshman resistance caused feuds among Boehner and his lieutenants that led some to fear a mutiny, heightened several showdowns with President Obama and eventually led to fissures among the rookies … the group is poised to play a pivotal role in a lame-duck session in which Congress must reach a compromise to keep more than $5 trillion worth of automatic tax hikes and spending cuts from kicking in Jan. 1.”

Deficit once again overshadowing jobs crisis. The New Yorker’s James Surowiecki: “The phenomenon in which a sizable chunk of the workforce gets stuck in place, and in effect becomes permanently unemployed, is known by economists as hysteresis in the job market. This is, arguably, what happened to many European countries in the nineteen-eighties—policymakers did little when joblessness soared, and their economies got stuck, leaving them with seemingly permanent unemployment rates of eight or nine per cent. The good news is that there’s not much evidence that hysteresis has set in here yet. The bad news is that we can ride our luck only for so long.”

Romney budget slams the poor. AP: ” Reducing government deficits Mitt Romney’s way would mean less money for health care for the poor and disabled and big cuts to nuts-and-bolts functions such as food inspection, border security and education.”

Romney hopes you have forgotten that Bush policies wrecked the economy, says NYT’s Paul Krugman: “How does the campaign deal with people who point out the awkward reality that all of the ‘Obama’ job losses took place before any Obama policies had taken effect? … [And] Romney is essentially advocating a return to those very same Bush policies.”

AZ Anti-Immigrant Law Faces Supreme Court

Supreme Court hears arguments on AZ anti-immigration law this week. McClatchy: “…the justices must decide whether Arizona went too far with a crackdown that includes ordering police to routinely check the legal residency status of people they stop. The court’s final answer this election year could ignite Capitol Hill, other states and, not least, Hispanic voters.”

Obama campaign reminds Latino voters who blocked immigration reform. TPM: “‘To say because you have an implacable group of Republicans in the Congress who simply aren’t to let that move, that the president hasn’t kept his promise, is a little bit disingenuous,’ [David] Axelrod said [on CNN.]”

Breakfast Sides

60 Minutes explores why no one at Lehman Brothers has been held accountable for the 2008 financial crisis: “There is one plausible explanation why SEC hasn’t has not gone after top Lehman executives. As it turns out, some of Lehman’s most egregious accounting shenanigans took place right under the noses of government regulators. … The very fact that government regulators were inside the company with access to its books and records would complicate any prosecution of Lehman officials.”

President displays increased willingness to exercise executive power in response to obstruction. NYT: ” In February 2011, Mr. Obama directed the Justice Department to stop defending the Defense of Marriage Act … In the following months, the administration increased efforts to curb greenhouse gas emissions through environmental regulations, gave states waivers from federal mandates if they agreed to education overhauls, and refocused deportation policy in a way that in effect granted relief to some illegal immigrants brought to the country as children. Each step substituted for a faltered legislative proposal.”

ObamaCare will save Medicare beneficiaries $208 billion through 2020. USA Today: “The new numbers are based on savings so far: 32.5 million people used preventive services last year with no costs to themselves, senior citizens saved $3.2 billion for prescription drugs that fall in the ‘doughnut hole’ in 2010 and 2011, and the government recovered $4.1 billion in 2011 in anti-fraud efforts. CMS also projected savings based on portions of the health care law that will be enacted soon, such as penalties for hospitals for readmitting patients for the same health episode, and paying providers based on quality standards.”

The Washington Post’s Ezra Klein takes issue with my argument — detailed in The Zombie Rises: The Return of Simpson Bowles — that the American elite consensus on austerity will take us down the same path that Europe is heading towards recession. But he misses the point.

Ezra argues that people living in parts of America like Nevada suffer a higher unemployment than “most of Europe.” And others living in Virginia are “better off than most of Europe.” Sure, and those who live in the Nordic countries of Europe are far better off than those living in Greece, Italy, Spain, and Portugal (that are suffering though brutal austerity programs). Which incidentally was my point. Austerity inflicted on weak economies adds to the misery.

Then he argues that America is in a much stronger position than Europe because investors assume America is going to survive, while growing numbers are starting to question whether the euro zone is sustainable. “The euro zone doesn’t have a debt problem. It has a continued survival problem. America’s got a debt problem.”

But that’s an argument with conservatives who keep railing about America’s deficits will make us the next Greece. Neither Ezra nor I believe that.

I was making a different argument. America has a jobs problem. Austerity will make it worse, and might make the debt problem worse too. And proof of that is in England where austerity inflicted on an economy just beginning a halting recovery drove it back into recession. And the proof is in the euro zone where the austerity that Germany has inflicted on the countries in trouble has producing rising unemployment, increasing misery and chaos, while making reduction of deficits more difficult, and doing nothing to lift the confidence of investors.

We can learn from Europe. One of them is the lesson Ezra teaches: that conservative hystrionics are wrong: our deficits won’t turn us into Greece in the bond market because no investor thinks we will default – notwithstanding the loopiness of congressional Republicans – and no one thinks we might break apart. And one of them is the lesson I suggest: that austerity inflicted on weak economies like this one will add to misery, not cure it.

President Obama and many Democrats spent much of 2011 talking about deficits instead of doing something about jobs. Now, a too-close election is on the horizon (too-close because of spending 2011 talking about deficits instead of doing something about jobs) and we’re being forced back to talking about deficits instead of jobs — by a Democrat!

Senate Budget Committee Chairman Kent Conrad says he is going to introduce the “Simpson-Bowles” deficit plan as his fiscal year 2013 budget resolution. This is a plan put forward by Alan Simpson, a retired Republican Senator who hates Social Security, and Erskine Bowles, a member of the Board of Wall Street’s Morgan Stanley. So here we are once again with the same old same old plan from the same old same old elites. Namely: cuts in Social Security and other things We, the People do for each other, combined with even more tax cuts for the rich. This austeridiocy plan to grow the economy by taking money out of the economy is a billionaire-backed zombie that never dies.

CNN: Bowles-Simpson back on table,

A key senator said Tuesday he would try to revive the so-called Bowles-Simpson plan as a starting point in negotiations over a long-term debt-reduction plan.

Democrat Kent Conrad, the Senate Budget Committee chairman, announced he would present the plan as his opening bid at the committee’s budget mark-up on Wednesday.

Murdoc’s (FOX) WSJ: Conrad’s Budget Surprise: Simpson-Bowles,

A key senator said Tuesday he would try to revive the so-called Bowles-Simpson plan as a starting point in negotiations over a long-term debt-reduction plan.

… The original Bowles-Simpson plan would reduce deficits by at least $4 trillion over 10 years by cutting defense and discretionary spending, curbing federal entitlement costs and reforming the tax code.

“Reforming” the tax code as used here means lowering tax rates for the rich and corporations, getting rid of a number of deductions to make it look like it isn’t such a big tax cut and then later putting back lots of new deductions and breaks for the rich and corporations.

Now Mr. Conrad could try to force the first Senate vote on the measure, though it would likely first come from the members on his committee. Mr. Conrad was on the Simpson-Bowles commission and voted for the plan in 2010. He’s also on the so-called Gang of Six lawmakers looking for a legislative path to put the proposal into law. The plan was originally designed by former Republican Sen. Alan Simpson of Wyoming and former Clinton White House Chief of Staff Erskine Bowles.

Push It Through After Election?

Citizens don’t get to vote on austerity plans.

This time they’s going to try to get this austerity plan through when few are paying attention: after the election but before the newly elected Congress comes in. This way democracy won’t get in the way, and the public doesn’t get a chance to react and hold legislators accountable. This might sound rather like the Greek austerity plan to cut working people’s wages, cut the things the Greek government does for its people, lay off public employees, and especially yo sell off the things the public owns and operates so a wealthy few can profit.

When the Greek Prime Minister proposed letting the public vote on this austerity plan he was removed, and bankers took control of the country, this is how it went:

Nov. 1, 2011: Greek PM puts bailout deal to public vote

Nov. 2: Greece sticks to bailout vote, as U.S., Europe weigh options

Nov 3: Greek prime minister abandons referendum on Greek debt plan

Nov. 9: Greek prime minister set to resign

Nov. 10: Ex-banker Papademos is new Greek prime minister

Ezra Klein talked with Conrad about his budget plan, and reports on the conversation in the Washington Post, Can Simpson-Bowles really pass the Senate?,

I’ve heard from some of my Republican colleagues who … said you’re doing exactly what needs to be done but we’re not going to be able to do something like this until after the election. And I think that’s true for many Democrats as well. … Simpson-Bowles put the vote of the commission after the 2010 election to try and insulate it from politics as much as possible. That’s what we’re trying to do here … I don’t expect a vote after the election.

… We should be swift to say to people, however, that compared to current law, it’s a $1.8 trillion tax cut.

Grand Bargain – Till They Go Back On The Deal

Aside from the whole subvert-democracy thing where they decide this after the election so no one can be held accountable, the record for “deals” is not good. The “debt-ceiling” hostage deal finally ended with Republicans agreeing to “sequestration” that includes military spending cuts. But it hasn’t worked out that way:

TPM: Bait And Switch: GOP Leaders Renege On Debt Limit Deal Defense Cuts

Oh, and if you really do want to do something about the deficit, think about this: Jobs Fix Deficits!

After President Obama declined to embrace any specific recommendation from the Simpson-Bowles proposal that originated in his deficit commission, you might have thought that the plan would be buried for good, But key senators won’t let it die the death the public feels it deserves. Politico reports:

Under [Senate Budget Chair Kent] Conrad’s scenario, the annual spring budget resolution would be expanded to 10 years and effectively adopt deficit reduction targets set by the commission [Note: there are no targets set by the White House deficit commission, because it failed to adopt a plan. There is the Simpson-Bowles proposal named after the co-chairs which some commissioners supported.] Within these parameters, Conrad has discussed allowing a free-wheeling debate in the committee to build a bipartisan consensus on how to meet these goals.

A second, parallel effort, led by Sens. Saxby Chambliss (R-Ga.) and Mark Warner (D-Va.), seeks to transform the [Simpson-Bowles proposal] into real legislation that could be debated—and amended—but would give senators a comprehensive plan as a starting point.

It’s all fine and good if senators want to get together and take deficit reduction seriously, but why use the Simpson-Bowles plan as the starting point? It’s a colossal failure.

The whole idea of having a bipartisan deficit commission was to show that if both sides put aside partisanship and ideological rigidity that we could finally come up with the best possible proposal that the vast majority of Americans would rally behind.

But that didn’t happen.

What we got was a proposal that largely focused on areas that have little to no bearing on our fiscal health, while barely touching upon the main driver of our deficits: health care costs.

We got a proposal that failed to prioritize jobs by slashing the federal workforce and by waiting until unemployment was reduced to tolerable level before embarking on cuts.

And we got a proposal that saw its main provisions be rejected by the public in poll after poll after poll.

Simpson-Bowles was a policy bust and a political fizzle.

If it was brilliant policy and a popular smash hit, then I suspect the President would have had a lot more nice things to say about it at his State of the Union address. He clearly saw the writing on the wall, why can’t these senators?

Now, sometimes we shouldn’t govern by polls, because what’s necessary may not be popular at the moment.

But the Simpson-Bowles approach to deficit reduction is far from the only way to achieve deficit reduction.

The Citizens Commission, the Economic Policy Institute, Rep. Jan Schakowsky and former SEIU chief Andy Stern all have plans that would successfully reduce the deficit and receive far greater public support, based on the polling we have seen.

Yet these senators are still treating Simpson-Bowles like it’s only game in town.

A serious deficit hawk wouldn’t waste time with a failed proposal. A serious deficit hawk would go back to the drawing board, then size up what’s necessary to do and what the public will accept.

These men are not only failing to be serious, they are acting like the blind ideologues whom they claim to deride, clinging to their Simpsonism no matter what facts are put before them.