June 30, 2010
Watch Alan Grayson give one of the best presentations of reasons to vote for progressives.
And the rubber chicken.
Skip to 9:57. Seriously, drag the slider until the time is 9:57. Worth it.
This was at the America's Future Now conference earlier in June. There is more video on the site.
The deficit-cutting craze has a simple origin: Republicans are driving a narrative that Democrats "spend" and that this "spending" jeopardizes the health of the country.
Never mind any facts here, this is about persuading the public.
Facts do not matter at all: Yes, the huge $1.4 deficit was Bush's last budget. Yes the massive debt is the direct result of Reagan/Bush tax cuts and military spending increases. Yes job creation programs reduce future deficits. Yes, infrastructure investment reduces future deficits.
None of the facts matter at all. Republicans have been able to convince a segment of the public that "Democrats spend" and that "government is bad" and that's what they're going to run with. And they will portray themselves as heroes for blocking everything.
China is cheating again. Yawn... China is subsidizing its paper industry ($33 billion 2002-09) and has tripled their production, and now is the largest producer of paper and paper products. Yawn.
This has cost jobs and approximately 400,000 remaining American jobs are at risk. And the companies they work for. NOT so yawn!
The Economic Policy Institute has released a briefing paper, titled, No Paper Tiger. This paper documents the different government subsidies behind the surge of Chinese paper imports, and look at its implications for the American paper industry.
Some of the subsidies that government provides,
This Briefing Paper estimates that in China’s paper industry, subsidies for electricity amounted to $778 million • (from 2002 to 2009); subsidies for coal, $3 billion (from 2002 to 2009); subsidies for pulp $25 billion (from 2004 to 2009); subsidies for recycled paper, $1.7 billion (from 2004 to 2008); subsidy income reported by companies, $442 million (from 2002 to 2009); and loan-interest subsidies, $2 billion (from 2002 to 2009). Missing data prevented calculation of pulp or recycled-paper subsidies in 2002, 2003, and 2009.
Implications for our own industry,
Cheap, subsidized Chinese paper exports have affected the U.S. paper industry. Despite comparable cost structures, high efficiencies, and plentiful natural resources, U.S. paper companies have failed to compete globally or nationally on price against much-cheaper Chinese imports. In 2010, the United States remains a net importer of paper and paper products. Imports from China are rising faster than those of any other country for this industry, with the value of U.S. imports from China growing at an annualized rate of 22%.
“From 2002 through the end of 2009, U.S. employment in the paper and paper products sector dropped 29 percent, from roughly 557,000 workers to 398,000.”
As the paper shows, China has no competitive advantage or cost advantage that would lead to the lower prices that are powering this surge. Labor is only 4% of the cost, and they import much of the pulp for the paper. They don't have economy of scale. It is only the government subsidies that enable them to take over the industry.
China’s massive subsidies to its paper sector are doing severe damage to the U.S. paper industry, its workers and their families,” said Scott Paul, executive director of the Alliance for American Manufacturing (AAM). “The only way to stop the bleeding is for U.S. policymakers to take action against China’s blatant violations of trade laws, including sweeping subsidies to paper and many other industries.”
We need better trade law enforcement.
June 29, 2010
The real deficit is jobs. That is one more of those things that everyone can see in front of their faces, but we're told it isn't what it is. There aren't enough jobs, and we're being told this is our fault because we wanted pensions and good wages and vacations and respect and dignity and please, sir, just a little slice of the pie.
In case you haven't noticed, the world's economy is suddenly undergoing a classic "Shock Doctrine"-style, coordinated propaganda attack. The wealthy and powerful, having insisted that countries cut their taxes and run up debt, now insist that the middle class and poor must work harder, have their pensions reduced, sell off (to them) their publicly-held resources, and take other "austerity" steps to pay off the debt that these lazy, parasitic peasants dared to run up.
The excuse is that "the markets" will “lose confidence” in us. Apparently we aren't working the salt mines hard enough. "The markets" -- that's the crowd who got in trouble and insisted that the world would end unless we immediately handed over to them all the rest of the money in the world -- will "lose confidence" in our ability to work the mines hard enough, and will cut us off, unless we cut our pensions, sell off (to them) our resources, and promise never to be lazy and make demands for better wages, pensions, workplace safety, and do it now.
The real deficit is jobs.
History teaches that the way out of an economic slowdown is to invest in infrastructure, education and modernizing manufacturing.
Slactivist said it best the other day,
This calls to mind an old story:But knowing their hypocrisy, he said unto them, "Why are you putting me to the test? Bring me a dime and let me see it."
And they brought one. Then he said to them, "Whose head is this -- FDR's or Herbert Hoover's?"
They answered, "Roosevelt's."
And he said unto them, "Right. So shut up. Have you morons already forgotten the 20th Century? When the choice is between imitating what worked and what really, really didn't work, why are you pretending it's terribly complicated?"
And after that, no one dared to ask him any question.
I'm not an economist, but we've got five applicants for every single job opening. If you tell me that the best response to that situation is to lay off hundreds of thousands of teachers, I will not accept that this means that you're smarter and more expert than I am. I will instead conclude -- regardless of your prestige or position or years of study -- that you're a moral imbecile.
According to the Labor Department,
By the end of 2009, the jobless rate stood at 10.0 percent and the number of unemployed persons at 15.3 million. Among the unemployed, 4 in 10 (6.1 million) had been jobless for 27 weeks or more, by far the highest proportion of long-term unemployment on record, with data back to 1948.
That's right, it was the policies of austerity that created a depression, and the policies of job-creation, infrastructure investment and taxing the wealthy to pay for it that got us out. But that was back when We, the People were still in charge.
In other news:
The rich grew richer last year, even as the world endured the worst recession in decades.
Top 1 Percent of Americans Reaped Two-Thirds of Income Gains in Last Economic Expansion, Income Concentration in 2007 Was at Highest Level Since 1928, New Analysis Shows,
Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928, according to an analysis of newly released IRS data by economists Thomas Piketty and Emmanuel Saez.
During those years, the Piketty-Saez data also show, the inflation-adjusted income of the top 1 percent of households grew more than ten times faster than the income of the bottom 90 percent of households.
According to his analysis, the top 1% held 34.6% of all national wealth in 2007. By Dec. 31, 2009, they held 35.6%.
Meanwhile, share of national wealth held by the bottom 90% fell to 25% from 27%.
In 2003 the top 1 percent of households owned 57.5 percent of corporate wealth, up from 53.4 percent the year before, according to a Congressional Budget Office analysis of the latest income tax data.
. . . For every group below the top 1 percent, shares of corporate wealth have declined since 1991.
. . . Long-term capital gains were taxed at 28 percent until 1997, and at 20 percent until 2003, when rates were cut to 15 percent. The top rate on dividends was cut to 15 percent from 35 percent that year.
See if you can make the connection. They want us to cut back our pensions, cut our wages, sell off our resources and work harder, to pay back the money that was borrowed and handed to them.
June 28, 2010
You must read slacktivist: Rendering unto Krugman
This calls to mind an old story:
But knowing their hypocrisy, he said unto them, "Why are you putting me to the test? Bring me a dime and let me see it."
And they brought one. Then he said to them, "Whose head is this -- FDR's or Herbert Hoover's?"
They answered, "Roosevelt's."
And he said unto them, "Right. So shut up. Have you morons already forgotten the 20th Century? When the choice is between imitating what worked and what really, really didn't work, why are you pretending it's terribly complicated?"
And after that, no one dared to ask him any question.
Susie, of course, nails it: Suburban Guerrilla : AmericaSpeaks: Will The Politicians Listen?
Is there really anyone out there who doesn't think the Republicans will filibuster Kagan?
June 26, 2010
A letter-writer in my local paper today reaches the wrongest possible conclusion:
Public, private workers live in different worlds
The current issue of Time magazine includes a cover story on the increasing numbers of nearly bankrupt states and municipalities across the country. An important point made in the story is that public and private workers increasingly live in separate economies. Private-sector employees face frequent job change, relentless layoffs, flat wages and rising health care premiums, and they fund their retirement with 401(k) contributions. If they're lucky, their employers will match a portion. Many do not. Contrast that reality to public-sector employees, who enjoy relative job security, defined benefit pensions with guaranteed cost-of-living increases, and competitive wages that rise every year. Public employee unions have had a stranglehold on state and local elected officials for decades. This has to end, as the taxpayers are fed up and tapped out. Nancy Pyle needs to get a clue, as do others on the San Jose City Council.
Summary: Workers in the private sector have it harder and harder. They are increasingly losing benefits, pensions and jobs. Forced to work ever-harder in increasingly degrading work environments their wages stay flat and are starting to fall.
Meanwhile public sector workers have stong unions so they have good jobs with good working conditions, job security, pensions and raises.
Therefore ... we should get rid of public-employee unions? Wow! Talk about coming to a grossly wrong conclusion, and working against your own interests! Just wow!
It is a psychological truth that people would rather see others brought down than see themselves brought up, but come on! How hard is it to see that this person should be for strong private-sector unions instead of against public-sector unions.
And the letter-writer demonstrates the core of the conservative ideological argument: All the benefits of our economy to the top few at the expense of the rest of us.
June 24, 2010
The deficit problem can be summed up very simply: the public thinks Obama's policies created a huge deficit. Never mind that it was Bush's deficit -- the public doesn't know that. This misunderstanding is leading Washington to take steps that will throw the economy into depression.
By 57 to 37 percent, voters in these 60 Democratic seats believe that President Obama’s economic policies have produced record deficits while failing to slow job losses — and not averted a crisis or laid a foundation for future growth.
The public believes the record deficits were caused by Obama's policies because:
1) Conservatives have pursued a strategic propaganda campaign to make the public believe this. They have used charts that show Bush's 2009 budget as Obama's, headlines that say this, repeatedly said it over the radio and conservative TV networks, etc.
2) The administration and supporters haven't responded to this campaign in any way, didn't seem to understand there even was a campaign to blame Obama for Bush's deficits, and now appear to believe it themselves.
Isn't this the story of the last few decades? Conservatives wage a strategic propaganda campaign to convince the public of XXX. Democrats don't respond, don't even understand there is a propaganda campaign being waged, and in time begin to support the conservative narrative.
But this time it is absolutely dead serious. The correct understanding of the cause of this deficit is absolutely crucial because doing the wrong thing now will throw the economy into depression.
The economy is on a precipice. Unemployment remains close to 10% with no help in sight and help for the unemployed running out. Economists are trying to tell Washington that more stimulus is needed, that it is crucial to directly create jobs, that the unemployed must receive checks and health care, and that cutting back now is exactly the wrong thing to do. Paul Krugman and others are becoming more and more alarmed about this. But with the public believing that the government is about to go broke, the political will can not form for doing the right thing.
But there are perceptions and then there are facts. It is just a fact that the huge $1.4 trillion deficit was Bush's 2009 budget, and that "Obama spending" contributed very little to that deficit. It is just a fact that the cause of current economic trouble is that the "stimulus bill" was inadequate, and its focus on tax cuts was a wasted effort. It is just a fact that letting unemployment benefits expire and refusing to pass job-creation programs will force the economy to turn back down. This is a mistake in policy caused by an intentional engineering of false perceptions.
If a filibuster happens in the forest and no one is told about it, did it really happen?
The GOP is said to be ready to filibuster the bill extending jobless benefits today. Will this be reported as the national emergency that it is? Will this be reported as a filibuster? Will this even be reported?
A Republican filibuster appears increasingly likely to kill long-sought legislation extending jobless benefits and a host of other spending and tax measures, despite a new round of cuts to the measure Wednesday that reduced its deficit impact even further.
Then, of course, rather than bring in the cots, require everyone to talk all night, hold press conference after press conference and bring it up again and again until the public understands, ... nothing. These tactics worked last time, in April, when the Republicans immediately caved over filibustering Wall Street Reform after the Democrats threatened to make a big deal out of it. Doing the same thing against build momentum toward victory. So why not do it again?
According to the report,
Democrats would then abandon the measure.
But none of this matters to anyone, right? You won't see headlines across the country. You won't see coverage break into regular programming.
Also from the report,
Failure to pass the bill would mean about 200,000 jobless people a week would lose benefits that average more than $300 a week because they would be unable to reapply for additional tiers of benefits enacted since 2008. Governors denied help with their budget woes are likely to lay off tens of thousands of state workers.
The Washington post says that 900,000 people will lose their jobless benefits by the end of the money. Millions are losing their health insurance right now as well. Why isn't this considered a national emergency. It is certainly an emergency for those people, for the stores where they buy groceries, their landlords or mortgage-holders, their children, their relatives and their communities. What is wrong with Washington that they don't care/ What is wrong with our elite media that they don't report this?
And the Democrats? What is wrong with them that they are not fighting? I have a question. Democrats started with a strong bill that included extending COBRA subsidies, getting rid of that special tax break for hedge fund managers, stong aid to the states, etc. They took piece after piece out, "to attract a few Republican votes." And now there is a filibuster, which means no Republican votes. So my question: when they took things out to get Republican votes, and ended up with no Republican votes, why didn't they get a promise of a vote in writing before they sacrificed such important items? And when the votes didn't materialize why didn't they put the items back?
The problem is that millions of people are being put into terrible circumstances by a Congress - Democrats and Republicans - that is failing them, failing the states, and is preserving a huge tax break break for billionaires. They just don't see this as an urgent problem, with some even calling the unemployed "lazy." Set aside the Washington games for a minute and look at the humanity. People who cannot find jobs - overwhelmingly older because age discrimination laws are not enforced - lose their heath insurance as the COBRA subsidies -- and COBRA itself -- expire. They are now losing their unemployment compensation. They of course will lose houses, even apartments.
Is this how a society treats its people? Is this how a Congress serves its constituents? Is this how a news media covers emergencies?
June 23, 2010
American deregulated corporatism: Short-term profits for a very few at the expense of the rest of us. The Gulf oil spill is driving home the "expense of the rest of us" part of this equation. And the corporatist/conservative reaction to government's efforts to reign in an industry that provides so much of their funding highlights for us the battle lines of the equation.
Conservatives say that getting a company to set up a fund to compensate its victims is "Chicago-style thuggery" and a "shakedown" and apologize to the company! Instead we demand they apologize to democracy for this.
But this is not really about "corporatism" it is about raw bigness translating into raw power. This is big industries and companies and a few extremely wealthy people that "have" vs not-as-big industries, companies and the rest of us that "have not." Big, centralized oil is a "have." Fishing, tourism, alternative "green" energy - these are industries and corporations too -- and democratic decision-making are "have nots." This is not corporations vs democracy, this is big corporations (really, the wealthy few people who control their resources) against smaller corporations and the rest of us.
Yesterday a Reagan-appointed, oil-stock-owning judge set aside the Obama administration's moratorium on exploratory offshore oil drilling, citing "potential economic harm to businesses and workers" in the oil industry while ignoring the not-potential threat of harm to the fishing, tourism and other industries now being destroyed by that industry. Big oil's wishes, a judge appointed by the guy who took Carter's solar panels down from the White House roof and dismantled mass-transit and alternative energy programs, and an anti-government conservative movement out to dismantle democracy combine to push back against the "thuggery" of a public daring to attempt to assert that safety is assured. The battle is over who is in charge.
The administration placed the moratorium while they develop new safety standards and procedures. This followed the revelations of near-complete regulatory capture of the Minerals Management Service by the oil industry, resulting in the chain of safety-ignoring, cost-saving diversions from standard procedure. They filed a xeroxed spill plan citing dead phone numbers and dead consultants, and the dead regulatory agency never bothered to read it before approving it. The blowout preventer wasn't working and they knew it but didn't want to take the time or expense to fix it. Etc, and etc.
Since so much was wrong on this rig the government wants to take a look at the other rigs drilling offshore and make sure they are operating safely, and get procedures that work in place. The industry is infuriated that government is "interfering' in their profit-making enterprise. Their oil is under our water and they want it now.
The industry threatens to just move oil rigs out of the Gulf to other areas, taking the jobs with them. Democratic oversight of corporate behavior is again held hostage to the threat of moving jobs across a border. The judge lets them get away with it.
This is the fight. The big and wealthy industries, corporations and people against the smaller industries, corporations and the rest of us. This is the same fight as that unleashed by the recent Citizens United case. It is not corporations vs democracy, it is the the wealthy few people who control the resources of the biggest corporations against everyone else.
And it is in no way clear who will come out on top.
See for yourself:
June 22, 2010
Here we go. Obama is making BP set up a fund to compensate its victims, and this is just like Hitler: Is U.S. Now On Slippery Slope To Tyranny?
June 21, 2010
June 20, 2010
Republicans are ashamed that the government has made BP set up a find to compensate their victims.
June 18, 2010
It's astonishing, watch the video to see Alan Simpson, Co-Chair of the National Commission on Fiscal Responsibility and Reform ("Deficit Commission") explain that buyers of US T-Bills don't necessarily need to get paid back because the money has "been used"!
Background: In the 1980s the Social Security payroll tax was increased, supposedly to set aside funds to cover the retirement of the post-WWII baby-boomer generation. But this extra revenue was instead used to give huge tax cuts to the wealthiest Americans. (Yes, that's right, they taxed working people and used the money to cut taxes for the rich.) So now that the boomers are retiring the money is needed. They want those bonds paid back now to cover Social Security payments.
The Commission: Now there is the Deficit Commission looking into how to raise money to cover what the government handed out as tax cuts to the rich. Rather than get the money from where the money went, the plutocrats are instead trying to convince people that it would make more sense to just cut Social Security instead, so they don't have to pay it back. The commission is meeting in secret, preparing to recommend cutting Social Security benefits. Hence the nickname for the Commission: "Catfood Commission," because cutting Social Security would force as many as 1.5 million old people into poverty and eating cat food for dinner because it costs less.
After Bush and Wall Street destroyed the economy older people were laid off in waves (because they're past a certain age), can't get jobs (because they're old), now have been denied extended unemployment and denied COBRA subsidies. Now they're called "lazy". They're threatened with the humiliation of drug tests. And finanlly, the Catfood Commission, meeting in secret, threatens any retirement security they have. Digby calls it "simple cruelty." And, as sTiVo pointed out in a comment at Open Left yesterday,
Since raising the retirement age is now on the table as a solution to the non-problem of Social Security, it is VITAL to raise this issue. WHAT JOBS????
Here is a simple idea for the deficit commission: everyone knows -- every one of us knows -- that the deficit was caused by tax cuts for the rich and huge increases in military spending. So to fix the deficit ... Duh? Can we connect the dots?
Connect the dots:But connecting those dots between the obvious causes of the deficit and the way to fix the deficit is beyond the mental abilities of people in "The Village."
The Simpson Video: Alex Lawson of of Social Security Works confronted Simpson leaving one of the secret meetings Thursday with a video camera and asked some questions about this. The video is above, transcript excerpts below: (h/t Jane Hamsher)
LAWSON: But what about the $180 billion in surplus that it brings in every year?
SIMPSON: There is no surplus in there. It’s a bunch of IOUs. ... It’s 2.5 trillion bucks in IOUs which have been used to build the interstate highway system and all of the things people have enjoyed since it has been set up.
LAWSON: Two wars, tax cuts for the wealthy.
Simpson starts from the premise that the Treasury will default on the bonds issued to the Social Security trust fund, because all the best people apparently know that it’s better to default on America’s senior citizens and plunge them into poverty than it is to default on, say, the Chinese.
. . . The commission is also looking into cutting Medicare benefits, because the deal guaranteeing no-bid Medicare contracts to the pharmaceutical industry by both Republicans and Democrats can’t possibly be abrogated. The committee claims it’s independent, but it’s not THAT independent. So, old people, too bad for you.
This is really important. They increased the Social Security tax on working people, gave the money out as tax cuts for the wealthy, created deficits on purpose to defund government, created a huge debt mess, and now the next stage of this plan is to gut social programs.
This is what the Deficit Commission is about. Tax cuts for the rich and military spending caused the borrowing and raising taxes on the rich can stop it. But the plan was to force a perception of a debt emergency to stampede people into accepting a dismantling of government that works for We, the People, and provides for us, empowers us and protects us. This is the confrontation of plutocracy vs democracy. We can't let them get away with it.
And get informed.
This post originated at Open Left.
June 17, 2010
Before you read on, yes this is for real. Yes, Democrats are joining with Republicans to fight help for the long-term unemployed. Yes, members of Congress are blaming the unemployed, calling them names, and proposing that the unemployed be publicly humiliated. And yes, for some reason they think this will win them votes. If you have the stomach for it, read on.
Do you remember last month when members of Congress said that people are unemployed because they are "lazy?"
Wasn't that insulting enough? Apparently members of Congress think it was not, and now want to insult the unemployed even more by adding a good, strong dose of humiliation to their lives.
As Digby wrote the other day after a previous episode of Democrats joining with Republicans to block help for the long-term unemployed, "This is simple cruelty at this point."
Not cruel enough, apparently. Sen. Hatch wants unemployed to face mandatory drug tests. What is Hatch's reasoning for a requirement that the unemployed publicly humiliate themselves?
"This amendment is a way to help people get off of drugs to become productive and healthy members of society, while ensuring that valuable taxpayer dollars aren’t wasted.”
Previously the reasons for not helping the unemployed included President Obama saying, "government can't create jobs," or ideological nonsense like it is not government's role, or the deficit is too big, or they are lazy. But I think this one takes the cake. Now the excuse for Congress' inaction on the economy is that the unemployed are out of work because they are on drugs.
It is enough to make me want to go get stoned. Come to think of it, California will be voting on legalizing pot in November! If members of Congress keep spouting this nonsense, keep refusing to act on jobs and keep taking it out on the unemployed, the poor and the elderly, we might see a migration west of people looking for a different kind of relief.
I'm sitting in at Open Left for a few days...
June 16, 2010
The headline of my local paper today is Obama: Act on clean energy. (But a different headline online - do they do that just to mess up bloggers?)
In the speech the President paid homage to President Carter's efforts to change America's energy policies, saying,
For decades, we have known the days of cheap and easily accessible oil were numbered. For decades, we’ve talked and talked about the need to end America’s century-long addiction to fossil fuels. And for decades, we have failed to act with the sense of urgency that this challenge requires. Time and again, the path forward has been blocked -- not only by oil industry lobbyists, but also by a lack of political courage and candor.
Then the President said we have been outflanked on the coming green manufacturing revolution by countries like China,
The consequences of our inaction are now in plain sight. Countries like China are investing in clean energy jobs and industries that should be right here in America. Each day, we send nearly $1 billion of our wealth to foreign countries for their oil. And today, as we look to the Gulf, we see an entire way of life being threatened by a menacing cloud of black crude.
Cap And Trade Dead
In the Huffington Post today, Teryn Norris, Director of Americans for Energy Leadership writes that the President also signaled the death of cap and trade legislation,
Instead of using last night's prime-time opportunity to push cap and trade ... President Obama pressed the reset button on energy and climate policy, saying he was "happy to look at other ideas and approaches from either party, as long they seriously tackle our addiction to fossil fuels." He made no mention of setting a price on carbon or establishing an emissions cap and trade system.
Others are trying to get things done on this front. Norris discusses the emerging Innovation Consensus,
The energy innovation consensus currently includes dozens of Nobel Laureates, Breakthrough Institute, Brookings Institution, National Commission on Energy Policy, Third Way, Association of American Universities, Clean Air Task Force, Information Technology & Innovation Foundation, Google, and Americans for Energy Leadership, among others. The latest group to join is the American Energy Innovation Council (AEIC), made up of several of the nation's top business leaders: Bill Gates, Jeff Immelt, John Doerr, Chad Holliday, Norm Augustine, Ursula Burns, and Tim Solso. Last week, these leaders released a new report, "A Business Plan for America's Energy Future," calling for major new federal investment in clean energy technology RD&D -- at least $16 billion annually, more than triple the current level (see our news roundup).
Here is the problem. Action on energy requires direct government action and rejection of deficit hysteria to do it. But every single initiative of the Obama Presidency has been blocked by powerful interests, playing on the use of the filibuster on almost every major bill in the Senate. Health care reform was severely weakened by the pharmaceutical and insurance lobbies. Financial reform has been severely weakened by the financial lobbies. Jobs measures and further stimulus have been blocked by a strategic lobbying campaign to make people think the Bush-created deficit must be cut first. Now cap and trade may have been killed by the oil and gas lobbies.
We are in a direct confrontation between the big corporations and We, the People over who will run things and control the resources of the United States, and We, the People are losing. There is time to turn it around, but only if we recognize this battle for what it is.
Damage control. Not much else. Obama has moved from Hope and Change to wondering why those nice Republicans won't vote for things even after he gives away everything in the bills that was good for the country.
Another reaction: Obama's Oil Spill Speech: Running On Empty
June 15, 2010
"The moral equivalent of war."
Tonight President Obama will talk about the Gulf oil catastrophe, and, hopefully, overall energy and climate policy. A look back at President Carter's fight over energy brings some context to this situation.
On April 18, 1977, 33 years ago, President Jimmy Carter gave a White House speech on energy and asked the country to change direction.
"Tonight I want to have an unpleasant talk with you about a problem unprecedented in our history. With the exception of preventing war, this is the greatest challenge our country will face during our lifetimes. The energy crisis has not yet overwhelmed us, but it will if we do not act quickly."
Carter said solving this energy problem would be "The moral equivalent of war." Please, please read the speech, and its ten principles. It will help set the stage for understanding where we are today.
If we fail to act soon, we will face an economic, social and political crisis that will threaten our free institutions.
But we still have another choice. We can begin to prepare right now. We can decide to act while there is time.
That is the concept of the energy policy we will present on Wednesday. Our national energy plan is based on ten fundamental principles.
The first principle is that we can have an effective and comprehensive energy policy only if the government takes responsibility for it and if the people understand the seriousness of the challenge and are willing to make sacrifices.
We failed to act soon. And we face an economic, social and political crisis that threatens our free institutions.
It turned out to be a very, very hard fight. The right's new network of corporate-funded "think tanks" was setting up shop and beginning to spread their poisonous, divisive, anti-government propaganda. They didn't like the idea of government trying to solve problems. The big oil giants certainly didn't want government researching alternatives to their gravy train. We understand the right's operation today, but people did not yet understand what was going on because the country had never been subjected to a destabilization campaign of this magnitude -- from the inside.
You can really feel the effect of the right's campaign when you read a speech Carter gave two years later. On July 15, 1979, President Jimmy Carter gave what is called the "Crisis of Confidence" speech. It's also known as the "Malaise" speech. I consider it to be one of the great speeches by a President. Carter again talked to the country about energy policy, pleading with people to take this seriously. He said, "The energy crisis is real. It is worldwide. It is a clear and present danger to our Nation. These are facts and we simply must face them."
Well, we didn't face them. Instead the country elected Reagan who immediately took the solar panels off of the White House, killed mass transit and alternative energy programs and steered the country on a path of toward dominance by the wealthy and big corporations - especially oil companies.
Now it is 2010, we have been at war in the Middle East for years, carbon in the air is raising the planet's temperature and melting the Arctic ice cap, and ... the oil in the Gulf. President Obama is giving his first Oval Office speech this evening and all of this is the broader context. Will he take on the entrenched interests that defeated Carter and brought us Reagan and later the two oil-company executives who invaded Iraq, encouraged buying Hummers and left us with a $1.4 trillion deficit?
As Carter said, "It is a clear and present danger to our Nation. These are facts and we simply must face them."
Crisis of confidence speech:
It seems that you can look at a chart of almost anything and right around 1981 or soon after you'll see the chart make a sharp change in direction, and probably not in a good way. And I really do mean almost anything, from economics to trade to infrastructure to ... well almost anything. I spent some time looking for charts of things, and here are just a few examples. In each of the charts below look for the year 1981, when Reagan took office.
Conservative policies transformed the United States from the largest creditor nation to the largest debtor nation in just a few years, and it has only gotten worse since then:
Working people's share of the benefits from increased productivity took a sudden turn down:
This resulted in intense concentration of wealth at the top:
And forced working people to spend down savings to get by:
Which forced working people to go into debt: (total household debt as percentage of GDP)
None of which has helped economic growth much: (12-quarter rolling average nominal GDP growth.)
Please leave a comment pointing people to a chart with a change after Reagan took office. How about a chart that shows America's investment in maintaining and modernizing our infrastructure over time?
Sometimes it can be so obvious where a problem comes from, but very hard to change it. The anti-government, pro-corporate-rule Reagan Revolution screwed a lot of things up for regular people and for the country. Some of this disaster we saw happening at the time and some of it has taken 30 years to become clear. But for all the damage done these "conservative" policies greatly enriched a few entrenched interests, who use their wealth and power to keep things the way they are. And the rest of us, hit so hard by the changes, don't have the resources to fight the wealth and power. (Speaking of which, you can donate to CAF here.)
Look at the influence of these entrenched interests on our current deficits, for example. Obviously conservative policies of tax cuts and military spending increases caused the massive deficits. But entrenched interests use their wealth and power to keep us from making needed changes. The facts are here, plain as the noses on our faces. The ability to fight it eludes us. Will we step up and do something to reverse the disaster caused by the Reagan Revolution or not?
June 14, 2010
It's not about fixing the schools or the students, it's about whether they can get jobs when they complete their education.
It’s not insufficient schooling or a shortage of scientists. It’s a lack of job opportunities. Americans need the reasonable hope that spending their youth preparing to do science will provide a satisfactory career.
This is an important article.
For the great majority, becoming a scientist now entails a penurious decade or more of graduate school and postdoc positions before joining the multitude vainly vying for the few available faculty-level openings. Earning a doctorate now consumes an average of about seven years. In many fields, up to five more years as a postdoc now constitute, in the words of Trevor Penning, who formerly headed postdoctoral programs at the University of Pennsylvania, the “terminal de facto credential” required for faculty-level posts.
. . . Many young Americans bright enough to do the math therefore conclude that instead of gambling 12 years on the small chance of becoming an assistant professor, they can invest that time in becoming a neurosurgeon, or a quarter of it in becoming a lawyer or a sixth in earning an MBA. And many who do earn doctorates in math-based subjects opt to use their skills devising mathematical models on Wall Street, rather than solving scientific puzzles in university labs, hoping a professorship opens up.
Today the country is looking for ways to cut spending and borrowing. Yet military spending, the biggest spending item in the budget, is barely part of the discussion -- obviously because of the amount of campaign and lobbying dollars it generates.
The corrupting influence of lobbying money is clear: the fact that the Soviet Union collapsed in 1991 has not yet penetrated the bubble around the country's capital. In fact, military spending has soared in recent years:
(Source http://www.usgovernmentspending.com/ Includes DOD, Veterans, Foreign military aid, Foreign economic aid. Does not include military share of debt interest.)
Because of this application of lobbying dollars our military spending vastly surpasses the amount spent by the rest of the world, and dominates our country's budget:
(This is discretionary budget. Source http://www.dailykos.com/story/2008/4/6/175138/6287/942/491304)
Now a bipartisan commission is willing to take this on. Commission outlines ways to cut defense spending by $1T over the next decade,
The Sustainable Defense Task Force, a commission of scholars from a broad ideological spectrum appointed by Frank, the House Financial Services Committee chairman, laid out options the government could take that could save as much as $960 billion between 2011 and 2020.
U.S. lawmakers and watchdog groups on Friday called for a dramatic revamp of the defense budget to reverse widening U.S. deficits, including termination of the $382 billion Lockheed Martin Corp (LMT.N) F-35 fighter.
This should be a litmus test to determine the seriousness and honesty of any deficit cutters. Do they take on the big lobbying interests, or do they take it out on the poor and elderly. We'll see. The record so far is not good.
June 13, 2010
Digby: Writing it Right This Time,
So Arizona is going to introduce a bill to pressure Israel to deport the children and grandchildren of European Jews to Poland and Germany. You'd think there would be some kind of outcry, wouldn't you?
Oh, wait. They just want to revoke the citizenship of the children of Mexicans so they can be deported to Mexico (and other ocuntries "down there.") Not a problem. My bad:
June 11, 2010
Drudge, FOX and lots of right-wing blogs picked up on my post the other day about Speaker Pelosi being heckled at the AFN conference. So I have received hundreds of emails, and comments at the YouTube channel. Almost all of them are like this one:
More than half you people on here should be fed into a wood chipper that ejects its refuse directly into the ocean. And guess who gets to pick whom? Me bitches! Fuck you!
THIS is your modern "conservative" movement. Nastiness seems to be all they are about, all they have.
Americans used to be citizens. Then they were trained to be consumers instead.
But now they're just wage slaves in a plutocracy (rule by a wealthy few). "Shut up and beg for a job." "Rich people provide jobs." Just look at the attitudes toward fellow citizens who are unemployed, "living off' the government, "unemployment benefits make people lazy" and "keep people from looking for work" etc.
June 10, 2010
Saying that the Obama "stimulus" was not big enough, conservatives are demanding that the government massively increase deficit spending to create badly-needed jobs. Newt Gingrich, at the conservative media outlet Human Events, calls for an Economic Freedom Act that includes,
• Reducing the payroll tax by half for 2010...;
• Eliminating the capital gains tax ...;
• Reducing the corporate tax rate to 12.5% ...;
• Permanently eliminating the death tax ... ; [note - what he refers to as a "death tax" is an income tax on wealthy children - DJ]
Each of these tax cuts demanded by conservatives would greatly increase the deficit. Many other conservative organizations and politicians are joining this demand for massive deficit spending to create jobs.
In the article, Gingrich also criticized the size of the Obama stimulus because it did not create enough jobs, writing, "The Obama stimulus has clearly failed. It’s time to get back to what we know works for job creation. 2+2=4."
Gingrich was right that the stimulus was insufficient. The CBO recently reported that the stimulus put up to 2.8 million people to work, lowered the unemployment rate by up to 1.5% and boosted the GDP by up to 4.2%. But the conservative-created job and recession crisis is much, much worse than that. We need emergency action to create 10 million jobs!
Tax cuts are the wrong approach because they would also reduce the country's ability to maintain and modernize the infrastructure while increasing the problem of extreme concentration of wealth. Economists say that tax cuts are not effective at creating jobs (and create structural deficit problems), while directly creating jobs through infrastructure investment also leaves behind ... badly-needed infrastructure.
June 8, 2010
This is semi-live blogging (notes corrected later) and there is a lot, so I will highlight the most important points.
I attended the Making It In America breakout session at the America’s Future Now conference this morning. Scott Paul of the Alliance for American Manufacturing moderated the session and panelists were Mark Melman pollster Kate Gordon Vice President for Energy Policy at Center for American Progress and Clyde Prestowitz of founder and President of the Economic Strategy Institute.
Scott Paul: America's manufacturing base as a percentage of our economy has declined since the 50s and 60s but factors in last decade have turbocharged this trend. People think we are losing manufacturing jobs in cars, shoes, textiles, but we are losing jobs in high tech at an even faster rate. We have broken the connection between public investment, innovation and producing things here.
One problem is that we have tended to view trade as a foreign policy tool instead of an economic policy, so we give away economic benefits in hopes that other countries will be more friendly with non-economic policies.
Changes like NAFTA, and the biggest impact from China entering into the World Trade Organization in 2000, have led to challenges for American workers and businesses who want to make things here,
A surprising amount of our disadvantage is because of government policies of other countries that support their own manufacturing, vs our own anti-industrial government policies.
China, for example. Their advantage is not just wages, but many other challenges like currency, government subsidies, and their protectionism.
Add it all up and it is hard to make stuff here.
Add another factor, that Wall Street has placed bet against American manufacturing. You cant get investment, venture capital, etc, to make things here, but if you want to do it in China you can get VC money, etc. Because Wall Street looks at quarterly profits and not long-term benefits.
Manufacturing can require a sizable capital investment . Generally government should provide public capital as they do in other countries but ours is only that doesn't. So look at the results. Cell phones, we invented, had biggest share of manufacturing, Phoenix had 10,000 people making Motorola cell phones. Now not a single cell phone is made here, all are made in Taiwan or China with parts from Asian countries. Along with cell phones, battery production went also. And now we need to produce alternative energy autos, but battery technology went abroad to Korea, China, Taiwan, Japan so we can’t make them here, or hybrid fuel cells. And the result of this loss is that the first generation of all electric cars will have batteries from Asia.
The only thing stemming this tide is public investment and having a manufacturing strategy. The 2008 energy bill has a clean energy battery fund, and we will be making them in Livonia, in Delaware.
We are slow on the uptake and need to be faster if we want a manufacturing strategy. It is good for the economy, for local communities. California had a share of manufacturing jobs and if kept CA had kept that share they would need no spending cuts, no tax increases, because of the wealth generated by manufacturing.
And there is a conservative argument: we don’t want to be dependent on other countries for defense.
Mark Mellman will kick off the panel.
Here are the results of a nationwide survey, April, 1000 voters, and quotes form focus groups.
Voters are anxious about the economy, our debt to China, government spending and loss of manufacturing jobs. Voters want DC to focus on manufacturing.
Manufacturing is seen as a central component of economic strength and the result of manufacturing's decline is Americans believe we are no longer the strongest economy.
People prefer American-made goods, distaste for Chinese made. Majority favor a national manufacturing strategy.
Problems listed by the voters polled: most is debt to China, deficit, tax dollars wasted, too many manufacturing jobs lost, dependent on foreigh oil, jobs shipped overseas.
Among independents loss of manufacturing jobs is #1
Jobs shipped overseas is #1 among others
If asked to list MOST important:
Voters want DC to focus on manufacturing. #1 is create jobs, #2 is manufacturing jobs specifically,
People don’t think this is what is happening, only a third see administration focus on creating jobs, the rest say too much time bailing out banks, not worrying about working people making a living. Only 53% of dems say congress and President are working on jobs
People don’t think anyone is doing a lot on helping manufacturing or enforcing fair trade. Voters see republicans not at all interested in these isses
Focus group quotes:
“If mfg not successful, economy not successful”
“If no mfg here, we are last car in the race”
Strong statements in focus groups born out by quantitiaive data
List of most important industry in terms of economy strength, #1 is manufacturing. Same as for national security.
People believe nothing can substitute for manufacturing . Not innovation, competition, services, only 30% agree, 2/3 say manufacturing is critical, need manufacturing base if we are to thrive in the future. 2/3 of dems AND Reps believe this.
Young and old, regions, lowest support is in the west but even there it is 55/42 say manufacturing is central to economic strength.
People see manufacturing in decline and see manufacturing as central ot our strength so they see us as no longer strongest. Dependent on others to exist. We are losing our wealth.
Only 36% say US is the strongest economy, 58% say not. People likely to identify China unprompted as strongest.
BUT 85%of public say we can become strongest again, is possible. Only 11% say not possible.
2/3 say very important for US to become #1 economy again. 95% say it is important.
People say American goods are better than Chinese.
People’s attitudes toward companies that move to China is extraordinarily hostile,
People see manufacturing as central, in decline, so we are no longer strongest, people want that back.
86% want increased government support but there is debate about the role of government. 39% say use any means necessary. 47% say help but limited government role – incentives and trade policy. Only 10% say government should not be involved. 8% of dems, 12% of Republicans.
8 of ten voters want a national manufacturing strategy. The word is manufacturing not industrial. Even when given and anti-government-help argument, still 2 to 1 people agree with pro-national-government strategy side.
Adding a defense security argument doesn’t add much, just the idea of becoming too dependent on foreign countries for goods. It is a key component of national economy.
Cutting taxes on business at BOTTOM of list.
9 of 10 voters support all policies, infrastructure, r&d, tax credit, make new products here, reduce trade deficit, use tax dollars to buy American-made.
The role of clean energy manufacturing, sustainable development, sustainable economy.
Hearing that people are concerned that the way we do economic development is not sustainable. Too focused on services, financial sector. And that we need to bring back manufacturing so we will be more competitive in global economy.
There is a feeling we are falling behind. Wind, solar, almost everything in clean energy is imported. (Building materials largely done domestically.)
She accompanied Senate staffers on a trip toChina to see first hand. It was staggering. High skill workers are operating machines, allowed to stop the line. The lessons have been learned form advanced manufacturing countries in clean energy.
This is reflected in American companies moving to China not just for advanced manufacturing but also now for advanced r&d. It is becoming a place where the whole innovation cycle is happening. All of it is happening in China also in Europe, this is a global issue.
There is a Center for American Progress paper called Out of the Running? How Germany, Spain, and China Are Seizing the Energy Opportunity and Why the United States Risks Getting Left Behind, It has a cross section of countries, these are ahead of us in clean energy manufacturing, and looks at policy in depth. It asks "What leads to comprehensive strategy?" Three broad areas:
1) Creating markets, demand.
2) Financing and investment
3) Infrastructure investment to make sure products get to market.
All three, China, Germany, Spain have strong Renewable Energy Standards, strong efficiency standards and strong building codes.
Europe has a price on carbon, this changes the game, creates a market.
Countries that signed on to Kyoto in fact have 33% more new patents in clean energy technology than countries that didn’t.
All of these countries are creating markets and demand, China has an advantage because it is huge, passes laws giving solar installation incentives, instantly creates a massive market.
China way ahead, lowered cost of capital for R&D in clean manufacturing. Coda automotive, China gave them a factory for strategic partnership.
Investments in manufacturing infrastructure – includes investing in workforce. They are spending far more than we are on roads, transit, power grids, all the systems that lead to getting stutff to market and moving for export.
See the market, finance, infrastructure chart at CAP site.
All of ours are short term or temporary. Or tiny, state-by state. There is no energy standard in 29 states. No federal renewable energy standard. No federal efficiency standard. We have short-term finance strategies, which are about to run out from stimulus package. All short term investing in clean energy, 2 year programs, and we are asking companies to make business decisions that look over many years. Our infrastructure has received a d- grade from organizations that evaluate this. Everything falling apart, from bridges to the grid losing up to 80% of the power. The difference in quality of broadband here to China is amazing. We are falling behind on each area.
What we need to do:
We don’t have an economic development policy, industrial strategy, no overarching view of competitiveness. They call this "industrial policy," we aren’t even allowed to say that here.
A national policy has to include investing in all 3 areas, finance: price of carbon will change environment for investing in clean energy. Invest directly in small and medium manufacturing, to making new economy stuff, for example from making windos to making efficient windows.
Programs to invest in other stages of the value chain, cant just do production, we have to do inventing. Next stage of inventing loop, we have advantages but we are losing them.
Need more efficient manufacturing facilities, buy more efficient technologies. Need big investment in infrastructure. This is a cost and weed to make decision as a country to look ahead, not just at today’s deficit.
Today we invent and buy stuff from others, but we are losing inventing, too.
I came to DC in 81 to work in Commerce Department. My job was to reduce the trade deficit. In 81 that deficit was $27B. 5 years later it was $150B. Now it is about $700B
Obama just made a deal to help China make airplanes. He says he wants to create jobs so why is he helping China build airplanes. It's one of the only things we make and sell to them.
Three is a huge issue that has run through our trade policies for a long time – he wanted China to help with Korea, Iran, geopolicital things so he makes an economic concession. The rationale of Anglo-American neoclassical economics is that trade is always a win-win proposition, so it doesn't hurt us to do this. Helping China build airplanes is good for America so not a contradiction in his mind.
But is in reality a huge contradiction.
Recently I was speaking to association of wood furniture manufacturers. I was making small talk with a CEO, asked how’s business, he says it's great, they have a line of cherry office furniture, cherry trees are cut in W VA, we ship the logs to Germany where they peel the veneer, then that is shipped to China where they glue it on the frame and the furniture comes back here and we sell it.
Germany is not a low cost wage country but they export veneer. They have better technique. They have maintained the skills to do that, niche that no one else can do despite high cost. What they do is they have "short work compensation" so when the economy goes into a downturn, sales are down, company is running at half capacity, they do not lay off workers. If you lay off workers, the skilled workers have gone somewhere else, skill sets are dying. Germany's deal is on downturn government pays half the salary of workers in order to keep the team together. Company gets tax break on R&D so they can develop new products, techniques, so when economy comes back they know how to do it even better
What should we do?
Polls reflect people calling for enforcing trade agreements, feeling we are losing because others are cheating.
Actually they aren’t cheating that much, it's more that they are playing a different game. They are playing football fair and square. Americans are playing baseball, but no pads and helmets, and football is a rougher game, Americans keep telling Chinese “Play Baseball” but the Chinese don’t play baseball.
Geithner tells the Chinese and Germans to consume more, export less. No chance they will, they say go fly a kite, we are all going to save and export. Also Chinese view. Save and Export.
Enforcement is low on list of what we should spend a lot of time doing. Big factors of what we can do are stop major incentives to move production out of US. US corporate taxes are highest. Lower to 15%. Corps aren’t paying a lot of taxes anyway. The thing is the reason they are not is because they go to maneuvers to avoid taxes and this is detrimental to domestic production.
Currencies in most of the world are being managed. China, Taiwan, Korea, Singapore, Malaysia, dollar is overvalued. 25% needed fast against China. So we need to think hard about taking action, invoke emergency clauses to address this.
Next, for some time was on Intel’s advisory board, watched the story develop. They make chips in Arizona, NM, lowest cost locations in world. We have a comparative advantage in those chips. Under laws of economics you would think that would be an export. But Intel just announced a major factory in China. Labor doesn’t matter in chips. Not about quality. The reason is that Intel execs only hear from top down in China is you have to have a “high image” in China, demonstrate that you are committed to China’s future, help to build China. Chinese see you as contributing by building factories there. Undertone is if you don’t, bad things can happen to you. Factory costs about $6 billion, big investment, China is putting up about half of that. So Intel does cash flow analysis, operating cost is higher in China but total cost because of capital subsidy is much lower. Israel, many other countries offering these capital incentives, so US should have a war chest that matches them. We did this before on export subsidies, ended up with deal in WTO. We ought to do this on investment subsidies.
Q overvalued dollar
Prestowitz: A Hard to do, now that we have WTO agreements. Martin Wolf said maybe US needs capital controls, cap capital coming in as a way to get dollar under control.
Q single payer, costs
Scott: if GM has to pay health care cost… reducing health care costs on employers is part of a national strategy.
Kate: manufacturing strategy focuses on magic bullet. China currency, made in America, but other countries have comprehensive strategy. Investing, lowering costs, improve education, workforce development, steady decline in US for decades now. A group of things we don’t do that would make us competitive.
Hecklers are disrupting Speaker Nancy Pelosi speech to the America's Future Now conference, shouting "Our homes, not nursing homes."
Also Code Pink was blocking the stage with a sign "Stop funding Israeli Terror"
Speaker Pelosi gracefully delivered her entire speech over the continuing chants of the hecklers, and many in the audience moved to the front to hear her over the disruption.
I wonder if the spectacle of members of Congress allowing the very small, corporate-organized Tea Party demonstrations to sway them on the health care bill and deficits will lead to disruption attempts becoming a preferred tactic instead of constructive policy debate with the best interests of the country in mind.
Here is video:
June 7, 2010
If you have read the Shock Doctrine you will completely understand what this is: Eschaton: Sounds Like An Excellent Idea.
2% get all the benefits at the expense of the rest. That is the new world, unless we fight it.
“Every day I see more pictures of dolphins and pelicans covered in bipartisanship.” Arianna at AFN. #afn10
You can watch the cofnerence live at ourfuture.org/now.
“This is the third economic revolution in world history.” Agricultural, industrial, global/green/bio/service/internet/etc. economy... Need 21st century, dehumanizing market worship economy has failed. Andy Stern
Congress gets 10 tea party phone calls for every one of ours. - Darcy Burner.
Obama is wrong in thinking that the corporate answer to every problem is the right solution. - Darcy Burner.
June 6, 2010
I am in DC at the Campaign for America's Future's annual #afn10 America's Future Now conference.
If you are in DC, come! If you are not in DC live video of the major events of the conference is being webcast at the conference site.
I will be in a blogger panel on Tuesday with Zach Carter, Digby, Richard RJ Eskow, Terrance Heath and Sara Robinson.
June 4, 2010
Stocks tumbled Friday after the Labor Department said hiring remains weak and Hungary became the latest European country to report its economy is in crisis. Interest rates dropped as investors moved their money into the safety of Treasury bonds and notes.
Evan as Washington ignores jobs bills and slashes help for long-term unemployed workers the economy may be starting to fall back. The economy added 431,000 jobs in May, but 411,000 of those were temporary Census workers. Compare this to last month when businesses added 218,000 jobs.
The unemployment rate remains very high at 9.7%, dropping only because 322,000 more people gave up looking. And long-term unemployment -- the "lazy" ones whose COBRA benefits Congress killed last week -- grew. "The number of people out of work six months or longer reached 6.76 million in May, a new high. They made up 46 percent of all unemployed people, also a record high."
Dean Baker, Unemployment Falls to 9.7 Percent, But Private Sector Job Growth Slows: "Excluding Census workers, job growth has just kept pace with the growth in the labor force over the last 3 months."
Construction lost 35,000 jobs. Retail lost 6,600 jobs.
Areas not losing jobs showed slowing jobs growth. Employment services gained 34,000 after having added 75,000 a month from October through January. Health care added 13,011 after adding an average 20,000 a month through the prior 12 months. Restaurants added 5,500 jobs in May down from an average of 19,000 jobs over the last four months.
A big one: state and local governments lost 22,000 jobs, and this loss is expected to grow in coming months.
Manufacturing, fortunately, was up.
This report is a clear warning that the recovery is very weak. The weakness is in spite of the temporary stimulus provided by the hiring of 550,000 Census workers. With house prices falling again, severe state and local budget cutbacks looming, and troubles in Europe dampening exports, the future is not bright.
Except for the President, who said, "This report is a sign that our economy is getting stronger by the day," reaction was mostly negative.
Wall Street Journal: Reaction to Jobs Report: Disappointing.
Washington Post, Bad Jobs Report.
Some good news, the President and Labor Secretary called on Congress to extend unemployment benefits and COBRA,
President Obama called for an extension of unemployment benefits, and Secretary of Labor Hilda L. Solis called on Congress to also extend health coverage.
“We continue to push for programs to help unemployed workers make it through this difficult time,” Ms. Solis said in a statement. “I call on Congress to extend the unemployment insurance and COBRA subsidy provisions in the Recovery Act through the end of the year.”
But will Congress listen to reality, or to the Wall Street deficit cutters.
In the following "scariest" chart from Calculated Risk the dotted line shows what is happening without the temporary Census jobs.
The dotted line shows the impact of Census hiring. In May, there were 564,000 temporary 2010 Census workers on the payroll. Starting in June, the number of Census workers will decline - and the two red lines will meet later this year.
This chart shows the long-term unemployed -- the "lazy" ones Congress doesn't think should get any assistance.
Please read: Progressives: Time to Go Off the Reservation,
We must be “off the reservation” as labor was under Roosevelt, and the civil rights movement was under Johnson. President Johnson wanted the Rev. Martin Luther King to shut down the demonstrations, saying that they would make reform impossible. With an independent movement, even King could not do that. Instead he went to Selma, and the resulting confrontation led directly to passage of the Voting Rights Act.
June 3, 2010
Where is our government?
ALSO, and this is important, see A Proliferation of Plumes?
... preliminary body of evidence suggesting that some of the oil — no one knows what proportion — is dissolving into the water and forming huge plumes of dispersed oil droplets beneath the surface. This is worrisome because it raises the possibility that sea life, including commercially important species of fish, could be exposed to a greater load of toxins than conventional models of oil spills would suggest.
The chemicals BP is using don't get rid of the oil, they make it invisible, but it is still there, still toxic, still killing aquatic life. This is one possible source of the giant "plumes."
We need monitoring craft to test for hydrocarbons in the water that have been rendered invisible, in order to assess the damage. Do you think BP will give Obama permission to do that?
Today ADP reported that private-sector jobs may have increased by 55,000 last month. (ADP is able to make this estimate because the company processes 1 of every 6 paychecks nationwide.) Meanwhile the Labor Department reported that initial claims for unemployment dropped 10,000 to 453,000 for the week ended May 29. Note that this drop brings the level "down" to what was nearly the peak number of layoffs in the last recession.
Tomorrow the Bureau of Labor Statistics will release its May jobs report. The report is expected to show that as many as 4-500,000 jobs were created last month. That 55,000 increase in the ADP report is private-sector jobs, while tomorrow's jobs report includes government hiring, and this could include as many as 400,000 temporary census workers.
But while one hand gives, the other takes away. Over at Firedoglake, David Dayen warns in Pre-Gaming the Jobs Report,
The other factor here is that, while temporary federal government jobs are rising because of the Census, permanent local government jobs are going away. State budget cuts could lead to as many as 900,000 jobs lost in 2010. And Congress decided last week to do nothing about that, cutting money in a jobs bill for the states to balance their Medicaid budgets.
A report showing 4-500,000 new jobs is always a great thing. But let's not get ahead of ourselves. We need to see reports like that continue for a year just to catch up to the jobs lost due to conservative policies of the previous administration!
The danger is that deficits hawks will cite this report and say it is time to turn to deficit reduction instead of investing in our economy and our people. But deficit reduction comes from investing in our economy and our people. Cutting back on unemployment checks, health care, infrastructure, education and all the things conservatives want us to cut back on means a worse economy in future years.
Another danger is that conservatives will misrepresent the report (imagine that!) and say that the economy is not creating real jobs, only temporary "government jobs." Jobs are jobs and temporary government paychecks still buy food at local groceries, clothes at local retailers, etc. Conservatives also say the stimulus "didn't work" or even claim the stimulus is the reason unemployment is high. Actually the CBO recently reported that the stimulus put as many as 2.8 million people to work, lowered the unemployment rate by as much as 1.5% and boosted the GDP by as much as 4.2%.
Calculated Risk has its own prediction on the unemployment report tomorrow, that it will be reported badly.
Finally, a reminder of where we are:
In Does Washington care about unemployment? economist Brad DeLong asks the question,
In 1983, Ronald Reagan's Washington regarded high unemployment as a national emergency. Today, with unemployment kissing 10 percent, Barack Obama's Washington scarcely seems perturbed. Why?
In 1983, when unemployment hit 10.5%, Washington was in a panic and it was considered a "genuine national emergency." Unemployment is just about as high today. But, DeLong points out, "Yet, unlike 1983, there is no sense of urgency in Washington. ... Instead, deliberations within the Federal Open Market Committee appear preoccupied with how best to apply the brakes."
He says that D.C. insiders he knows tell him to calm down, that things are getting better. He thinks the problem is something else.
But whenever I wander the halls of Washington these days, I can’t help but think that something else is going on—that a deep and wide gulf has grown between the economic hardships of Americans and the seeming incomprehension, or indifference, of courtiers in the imperial city.
Have decades of widening wealth inequality created a chattering class of reporters, pundits and lobbyists who’ve lost their connection to mainstream America? Has the collapse of the union movement removed not only labor’s political muscle but its beating heart from the consciousness of the powerful? Has this recession, which has reduced hiring more than it has increased layoffs, left the kind of people who converse with the powerful in Washington secure in their jobs and thus communicating calm while the unemployed are engulfed in panic? Are we passively watching an unrepresented underclass of the long-term unemployed created before our eyes?
The price of Treasury bonds is up, which means demand is high -- and that investors are not-at-all worried about our deficit. But D.C. is focused on reducing the deficit. This reflects more concern for the interests of the wealthy of Wall Street than of the working people on Main Street. This division is similar to the division between those who wanted more money circulating in the 1890, and were calling for us to move from a gold standard to a bimetal gold/silver standard so there could be more money circulating.
If they dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.
But crucifying the jobless on cross of stock certificates is OK?
The way to reduce the deficits is invest in the economy and to get people working again.
See this animation:
A detailed computer modeling study released today indicates that oil from the massive spill in the Gulf of Mexico might soon extend along thousands of miles of the Atlantic coast and open ocean as early as this summer. The modeling results are captured in a series of dramatic animations produced by the National Center for Atmospheric Research (NCAR) and collaborators.
[. . .] Peacock and her colleagues stress that the simulations are not a forecast because it is impossible to accurately predict the precise location of the oil weeks or months from now. Instead, the simulations provide an envelope of possible scenarios for the oil dispersal. The timing and course of the oil slick will be affected by regional weather conditions and the ever-changing state of the Gulf’s Loop Current—neither of which can be predicted more than a few days in advance. The dilution of the oil relative to the source will also be impacted by details such as bacterial degradation, which are not included in the simulations.
Through Mother Jones.
June 2, 2010
I came across Carter's "Malaise" Speech today. Republicans mocked him for this speech and the oil companies went all out for Reagan. (Reagan took the solar panels off of the White House the first week he was there.) What Carter said is as relevant and important today as ever, probably even more so. Please read.
Ten days ago I had planned to speak to you again about a very important subject -- energy. For the fifth time I would have described the urgency of the problem and laid out a series of legislative recommendations to the Congress. But as I was preparing to speak, I began to ask myself the same question that I now know has been troubling many of you. Why have we not been able to get together as a nation to resolve our serious energy problem?
No serious person denies that Reagan's 1981 tax cuts and military increases threw the country into a pattern of borrowing and borrowing that we have not escaped. When Reagan took office the national debt was $995 billion. When Reagan left office it was $2.87 trillion and climbing fast.
No serious person denies that Bush's 2001 tax cuts and continued military increases dramatically worsened the problem. Bush's last budget year ended with a record single-year deficit of $1.4 trillion.
As the country discusses what to do about the borrowing the elephant in the room is that everyone understands that restoring top tax rates to pre-Reagan levels and cutting the military budget in half would solve the problem completely. But we can't do that. We can't even discuss it.
And we all know why. And we all know why. It is because the Reagan Revolution transformed the country from a democracy to a plutocracy -- a country run by and for the wealthy.
Such sensible and simple ideas are considered off-limits. To even bring up the idea of restoring tax rates to pre-Reagan levels and cutting military spending invites terrible consequences. The speaker risks becoming the target of the money's noise machine: Limbaugh, Hannity, Drudge, Fox. Smears. Humiliation. Banishment. Or the noise machine cranks up a campaign of misinformation, convincing people --especially DC people -- that what they see in front of their eyes just isn't so. Repeat it enough and it becomes solid knowledge.
We all know this is the way it is. So don't tell me that "we don't have the money" to keep 300,000 teachers from being laid off, or to help the long-term, mostly older unemployed workers get something to live on and keep their health care. The money is right there in front of us, but the Congress is bought and paid for.
What do we do? We have to demand representatives who represent us, not make excuses for representing the wealthy. The unfortunate, poor and disadvantaged must count every bit as much as the privileged -- that's what democracy means. And we have to be ready to turn them out if they don't. For our part, we have to pay attention and demand to be shown, not told. We have to become citizens, not consumers.
June 1, 2010
Washington politicians are convinced that the public is demanding cuts in spending, even over creating jobs and restoring the economy. This pressure comes because much of the public believes that "Obama tripled the deficit." This has been the right's drumbeat for over a year and the public has not heard any response. You can barely turn on the radio or TV, or go on the Internet, or read the letters-to-the-editor in your local paper without hearing one or another form of this message repeated.
Fact: Bush's 2009 budget-year deficit was $1.4 trillion. 2009 was President Bush's last budget and included the Wall Street bailouts, unemployment benefits and other costs of the incoming recession, plus Iraq and Afghanistan. This massive deficit was just one more conservative failure.
But the right's propaganda campaign telling the public that this was Obama's deficit, not Bush's has gone unanswered. The Obama administration and their allies are not reaching the public with the truth or any message that counters the lies the right is putting out.
Charts that make it appear that the huge deficit was Obama's doing are an example of how the public is being conned:
The well-funded Heritage Foundation is one leader of the effort to convince the public of this. Bush Deficit vs. Obama Deficit in Pictures demonstrates an effort to mislead the public into blaming Obama for Bush's massive deficits.
FOX News had this headline: Obama Triples Budget Deficit to $1.4 Trillion (they have since changed the headline but here is it as it appeared:)
On the radio the drumbeat continues with people like Rush Limbaugh, saying, President Obama Lies About His Massive Deficits and Tax Increases,
People are fed up with this spending. They're scared to death of it. They know full well what it portends. It portends massive tax increases for years on us, our kids and grandkids. It weakens the country. This is just an abomination. Nine years ago we were attacked. Barack Obama cannot tell the truth. Constitutionally, he's not capable of telling the truth. He has increased the deficit, not by twice, not by three times, but by four times... Last year's deficit surged to $1.42 trillion, more than three times the record of the previous year. An imbalance of $454.8 billion in 2008. So Bush's last year budget deficit was $454.8 billion. Obama's budget deficit last year was $1.42 trillion. That's nearly $1 trillion more that he added to it in fiscal 2009.Here is Sean Hannity claiming Obama "quadrupled the deficit",
This is why the deficit dominates the agenda in DC. This dishonest propaganda campaign is the source of the political pressure to cut spending. Fine. What else would you expect from the right? It's what they do. But why has this campaign gone unanswered? Why haven't the forces allied with the President reached out with the facts? Why have they let themselves be put into this box?
A bigger question, why does the Obama administration still not seem to get it that this is what they do? The right has a coordinated, funded propaganda machine that just lies, and smears, belittles and humiliates people, makes the public afraid, stirs up division - even encourages sedition, all to get their way.
The right is well-funded because there is a monetary payoff to the big corporations and wealthy individuals who fund campaigns like this one. Their anti-government campaign is buying tax cuts, subsidies, deregulation or just non-enforcement of regulations, waivers or just lack of enforcement of anti-trust rules, military contracts, and a long list of other financial benefits.
Meanwhile people interested in democracy and good government are largely unfunded. They are largely shut out of TV and radio. For example, you rarely see a representative of labor on TV, radio or in the news. Bloggers reach a lot of people, but nothing like the talk radio/TV empire of the right. So how can we do this better?
We will be talking about this Tuesday afternoon at the Americas Future Now conference session, Can Bloggers Bring Populism To The Potomac? with Digby, Sara Robinson, Zach Carter, Terrance Heath, RJ Eskow and myself.