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How to solve the “debt crisis”

 

This morning, Dean Baker responds to yet another know-nothing right wing rant about the deficit, by suggesting we can solve the deficit problem by hiring unemployed college grads to write equally ignorant pieces about the deficit.

But this piece suggests an easy route for dealing with the deficit. Clearly there is a big market for deficit hawks. (I assume that Mr. Ferguson was well-paid for this piece.) It certainly is not difficult to train someone to write this stuff. Suppose that we set up educational programs that will train millions of deficit hawks to write stuff for the Peter Peterson—BBC—Financial Times crew. We split the payments between our former students and the government.

This would be a great win-win-win story. Otherwise unemployed college grads could get good-paying jobs being deficit hawks. Taxpayers would get a cut of their payments, helping to bring down the deficit. And, even Peter Peterson, the BBC, and the Financial Times would gain because they would be able to find deficit hawks who would be every bit as knowledgeable as Niall Ferguson and would work for much less. (We could assure the deficit hawks that our students would not be more knowledgeable because then they probably would not write such dreck.)

There you have it: a plan for compromise and bipartisanship. Do we have a deal?

(via Beat the Press)

Well, this idea will never be adopted, because long term, it actually might make a dent in the deficit. No, there is only one way to make the deficit problem go away, and the Republicans are really, when you listen, being fairly clear about it. We must restore them to power. Then deficits don’t matter, or at least no one talks about them anymore, and really, in this country, isn’t that the same thing? Look at how well we’ve solved the climate change problem.

 

Friday Night Music

Somewhat topical; Arlo Guthrie, Emmy Lou Harris and others singing Woody Guthrie’s Deportee. Just goes to show some things never change. Obama’s announcement today was no doubt politically motivated, but unlike some politically motivated gestures I could mention, it was the right thing to do.

By the way, it looks like I can pick them. My usual method of picking videos, especially if I’m looking first on my Ipad, is to add the winners to my youtube favorites. I’m not terribly good about removing them from the list, and looking back, it appears that the majority of them have now been removed because of copyright claims. Yet more examples of shortsighted stupidity on the part of the big media companies.

At least he picked the right victims

It is an interesting fact that the two people who have actually been prosecuted, since the great meltdown, as a result of financial scams, were men who specialized in relieving the already rich of their money, while the folks who simply gambled with everyone’s money have gone not only scot-free, but have been the recipients of government largesse (we cannot call it welfare as it went to the rich). There is a lesson in there somewhere.

The latest con-man sent to the big house is R. Allen Stanford, whose victims joined together in court to condemn the man who relieved them of their millions. Now, I hold no brief for Stanford, but somehow, my heart does not go out to these folks. Consider the nature of the con:

A federal jury in March convicted Mr. Stanford of running an international scheme over more than two decades in which he offered fraudulent high-interest certificates of deposit at the Stanford International Bank, which was based on the Caribbean island of Antigua.

(via New York Times)

Lives there a rich investor that knows not that the entire purpose of setting up shop in Antigua is to evade the law? They feel cheated, I’m sure, because they thought the only point was to cheat the government out of taxes, and not themselves out of their money.

 

Corporate veto power; the coming thing

 

There are folks out there who insist that there isn’t a dime’s worth of difference between the two parties, so one should either cast a Naderesque protest vote, or not vote at all. I’ve always felt that there is too much truth in that position to totally reject it, but that on the whole, the perfect is the enemy of the good, and that at least the Democrats will keep us from theocracy, albeit not a plutocracy.

But if there’s any truth in this, I really may have to re-think my position.

WASHINGTON — A critical document from President Barack Obama’s free trade negotiations with eight Pacific nations was leaked online early Wednesday morning, revealing that the administration intends to bestow radical new political powers upon multinational corporations, contradicting prior promises.

The leaked document has been posted on the website of Citizens Trade Campaign, a long-time critic of the administration’s trade objectives. The new leak follows substantial controversy surrounding the secrecy of the talks, in which some members of Congress have complained they are not being given the same access to trade documents that corporate officials receive.

The newly leaked document is one of the most controversial of the Trans-Pacific Partnership trade pact. It addresses a broad sweep of regulations governing international investment and reveals the Obama administration’s advocacy for policies that environmental activists, financial reform advocates and labor unions have long rejected for eroding key protections currently in domestic laws.

Under the agreement currently being advocated by the Obama administration, American corporations would continue to be subject to domestic laws and regulations on the environment, banking and other issues. But foreign corporations operating within the U.S. would be permitted to appeal key American legal or regulatory rulings to an international tribunal. That international tribunal would be granted the power to overrule American law and impose trade sanctions on the United States for failing to abide by its rulings.

(via Huffington Post)

Unfortunately, given the Obama administration’s track record, I can’t dismiss the possibility that this representation of the situation is substantially correct. This type of mechanism would not be unprecedented, but it can’t be denied that it’s a mechanism the corporate wing of the Republican party would embrace, as indeed it has. Under the radar, outside of the public eye, there’s not much difference between the parties when it comes to serving corporate interests.

When I was a young lad, the Supreme Court, an un-elected, unrepresentative body answerable to no one, actually functioned as a bulwark against oppression and a protector of our basic constitutional rights. Since that was the way it was, I imagined that it had always been thus, and I think a lot of my contemporaries felt the same way. We didn’t realize that, in fact, that Court was atypical; that the court had for most of its history been the guardian of the status quo and the “rights” of the uptrodden. The court has of late returned to its historical role with a vengeance. With Citizens United, in one fell swoop, it handed the country over to the billionaires.

If the above is true, then Obama is planning to do the same on an international scale; handing our laws to an unelected body, answerable to no one but the plutocrats, and undoubtedly staffed by plutocrats or their designees (after all, who else understands these very complex issues?). One can make the case for international institutions and one can even make the case for international institutions that can override national laws, but the case collapses when those institutions are part of a closed system, in which the deciders (to borrow a term) are selected through a process so removed from democratic institutions that they are, in effect, the same as the Supreme Court but even more so: an unelected body answerable to no one, with an institutional bias toward the interests of the very entities that will appear before them as plaintiffs. The public interest, be it local, national or international will be ignored. The leaders of sovereign nations, themselves ever more increasingly just the tools of the plutocrats, will simply plead helplessness as their citizens protest the failure of their elected representatives to rein in the corporations.

It calls Europe to mind, where national leaders tell their rightfully disbelieving populaces that there is no alternative to austerity for everyone but the bankers. People will look for alternatives, and they will find them at the extremes. If things run true to form, judging by past history, demagogues of the right will be most likely to arise, partly because the entrenched powers tend to view the right as more tractable and therefore put up less resistance to their rise. See, e.g., Germany in the early 30s.

As a sidebar, the provision barring U.S. corporations from subverting our laws is so obviously subject to manipulation that it means nothing. All a corporation need do is form a foreign corporation and have it do the dirty work. Corporations are wonderful things; they are people “my friends”, but they can be conveniently birthed and buried as convenient.

Bad Moon Rising

 

I’ve argued a couple of times (e.g, here) that European austerity may pave the way for a return of authoritarian regimes. Krugman makes the same point here.

 

Only in America

This is a country in which fairly basic human rights are being treated in a rather cavalier fashion, without much outcry from anyone. People are being removed from voting rolls upon mere suspicion, and even that is giving too much credit to the perpetrators. Congress just passed a law allowing the government to imprison without trial anyone deemed a terrorist sympathizer. We are all treated as suspects whenever we board a plane. Our prisons are full of people guilty only of perpetrating crimes upon themselves (e.g., drug use or possession). The list goes on.

But in one respect, we are a shining beacon of a crazy sort of freedom, and here I hark back not only to the modern, but to the original definition of crazy: “full of cracks or flaws, unsound”, for in this country you can do what you like, so long as you do it armed. The Bill of Rights is becoming a dead letter, except the second portion thereof, into which the Supreme Court has breathed life that the far from crazy framers could never have anticipated.

Latest case in point in today’s Times, where we learn that the usual suspect, the NRA and its fellow criminals, have a problem with the fact that some states (far be it from the federal government to ever suggest such a thing) want to require gun manufacturers to manufacturer guns and shells that will enable law enforcement to immediately determine the particular gun from which a shell that say, ended up in some non-gun owners body, might have emerged. Well, naturally, the crime lobby is upset at the possibility that they might actually be held responsible for their crimes, so they, along with the gun manufacturers, are crying foul.

New York is considering such a ban. Now, New York is one of those states that actually still has a fair proportion of sane people in it, so one must wonder about the reaction Remington expected to get when it issued this threat:

The issue has become so heated that in New York, where the State Assembly is expected to debate a microstamping bill as early as Wednesday, one gun maker, the Remington Arms Company, has threatened to pull its business out of the state if the bill becomes law.

“Such a mandate could force Remington to reconsider its commitment to the New York market altogether,” said Teddy Novin, a company spokesman.

Yes, it appears Remington would like us to believe that it sells guns in New York not to make money, but because of its commitment to the New York market.

Now the logical response to this would be: “Make my day!”.

Of course, this blessed event would never take place, as this is, alas, the emptiest of threats. But it does give us a bit of insight into the minds of these gun folks, who have been so pampered and coddled lately that they think such a threat might work.

Everyone else must fail

 

Today’s Boston Globe reports that young people are not buying homes, and that their failure to do so will have negative impacts on the economy. The article comes complete with the required profile of an atypical exemplar of the affected class of people, a young woman who, at least implicitly, actually has the ability to purchase a home if she wanted to, but is inexplicably put off by the fact that other people who can’t afford homes are being foreclosed. But the article eventually gets to the root causes.

High unemployment, crushing student debt, and tight credit conditions are keeping many young adults and families from becoming homeowners, analysts and real estate professionals said. At the same time, the turmoil that has followed since prices peaked in 2005 and the housing market collapsed is changing this younger generation’s view of housing, long thought of as a safe, sure investment and prerequisite to the American dream.

(via Boston Globe)

90% of the truth lies in the first sentence of the quoted paragraph. People got foreclosed during the Depression, but I’d bet quite a bit that people still wanted to own homes back then.

What is most interesting to me about this story is the underlying subtext that these developments are the result of some force of nature, rather than deliberate policy. Had we, in 1980, deliberately set out to screw succeeding generations, we need not have done anything differently than we have done. In fact, it was deliberate.

I grew up in what would have to be described as a low income household. I went to an inner city high school. I attended an elite college and a state law school. Total college costs, tuition plus room and board, were a bit over $4,000.00 per annum. UConn Law School, when I attended, cost, I believe, $300.00 a semester, though it may have been double that. I graduated from law school with a total of $2,000.00 in debt. Through scholarships and work study, college cost almost nothing. My story, once a commonplace, cannot happen today.

The college I attended now costs upwards of $50,000.00 a year. Inflation alone cannot explain that. State universities, which back then were far cheaper than the relatively high ticket price at my college, are no longer a cheaper option. Back in my day, California colleges cost, if memory serves, $0.00 per year for in-state students. It was the best deal in the nation, but most other state universities and colleges were cheap. Proposition 13 took care of California, but in every state the anti-tax ideology has led us to abandon the common sense principle that since an educated citizenry benefits us all, all of us should bear the cost. Recently we learned that UConn will hire more professors, and pay for them with yet another tuition increase. It no longer even occurs to us that perhaps we should all be sharing the cost.

It’s not just increased college costs, of course. Spending on education has taken a hit at all levels, and the folks responsible for those cuts then complain that our young people are not educated for the millions of mythical unfilled jobs for which they allegedly lack skills. Our tax policies have shoved money toward the .01%, our corporations have shipped jobs overseas, and our political parties have vied to see which can gut the power of organized labor the most. We have constructed a society in which suitable jobs for those indebted students do not exist. When not the result of direct government action, the private actions that work to destroy us have been aided and abetted by both parties. See, e.g., the repeal of Glass-Steagall. The surprises come when we actually do something to benefit the people, such as the recent legislation that ended the bank’s student loan racket. The middle class is disappearing, and with it the consumer spending on which the economy depends in order to grow.

None of this was inevitable. The present plight of the young is a result of deliberate policy choices on the state and local level. Young people these days are entering a world of uncertainty that is unprecedented. No job is safe, no future secure. Is it any surprise that they put off starting families and buying homes? Once again, I am reminded of one of the finest lines of dialogue I can recall from any movie I’ve seen, the otherwise fairly forgettable Superman III, in which Robert Vaughn’s capitalist villain sums up his motivation, and that at work behind the Koch Brothers, et. al., who are screwing all of us, but particularly the young: “It is not enough that [we] succeed, everyone else must fail”

 

Friday Night Music: The Krugman Blues

If any of my readers happen to read Paul Krugman’s blog, they are probably aware that there is an infinitesimally small, yet not non-existent, chance that he stole his Friday Night Music feature from me. I have managed to contain my outrage. Our tastes do not appear to coincide that much in music, though both of us are lamentably addicted to reason, which can make life difficult sometimes.

Anyway, I did not get this from Krugman’s Friday Night Music feature, though I did steal it from his blog. If he can possibly steal from me, then I am fully justified in stealing from him. Now, if only someone would write the CTBlue Blues.

Loudon Wainwright III:

Here’s Loudon singing his one big hit mildly successful song, at Occupy. Here’s hoping there’s another dead skunk come this November.

Solidarity, Brother!

 

Private sector Unions in New York join with business interests and DINO Andrew Cuomo to destroy public sector unions.

What do they think those folks will do once they succeed with state workers? Maybe they ought to listen a little closer to Scott Walker.

 

It’s good to be a plutocrat

Yet another example of the Obama Justice Department doing just what one would have expected from the Bush Justice Department:

The Obama administration is set to urge a federal appeals court to reinstate a $1.5 million music filing-sharing verdict a jury levied against a Minnesota woman for sharing two dozen songs on Kazaa.

At issue is a Minnesota federal judge’s decision last year lowering the verdict to $54,000, ruling that the jury’s award “for stealing 24 songs for personal use is appalling”.

The case tests the constitutionality of the Copyright Act, which allows penalties of as much as $150,000 per infringement. It also asks whether federal judges have the power to reduce copyright damage awards rendered by juries.

(via Wired)

Generally speaking, the Justice Department has the obligation to defend the constitutionality of a statute, but that doesn’t mean it has to take the position it’s taking in this case. All of a piece with the generally dismal performance of the Obama Justice Department.

This is what comes when people get to make their own laws; or, more properly, when corporations get to make their own laws. When the rest of us are damaged, we have to prove the amount by which we have been damaged. Corporations get to pass laws that set damage amounts wildly out of proportion to any actual harm. There can be no doubt that the Supreme Court that has so assiduously sought to limit the amount of punitive damages regular people can get from corporations will have no trouble defending the rights of corporations to awards totally out of proportion to the damages they have suffered. Funny too, that the Congresses that have passed laws like this are stuffed chockablock with legislators that advocate “tort reform”, which translates into limitations of damages awards against corporate America.