Robert Kuttner

Folks Like Me

(Flickr / 401(K) 2012)
When President Obama calls for raising taxes on the top 2 percent, he has a habit of declaring that, “Folks like me” should pay higher taxes. He used the phrase dozens of time during the campaign, and just this week again in an interview on Bloomberg. Either someone on the president’s speechwriting staff has a tin ear, or Obama himself does. For starters, the comment puts unnecessary distance between the president and the citizenry. It signals: I am not like most of you. I am far wealthier. But the phrase, “folks like me,” is wildly misleading. The people whose taxes really need to rise are not folks from the professional class like Barack Obama. They are folks like Mitt Romney and Pete Peterson—people with net worth in the billions or hundreds of millions; people behind the corporate Fix the Debt campaign; people like the Koch brothers and Sheldon Adelson. These are people not at all like us, and they are not people like Barack Obama. As Obama used to remind audiences, he is a lot...

The Importance of Elizabeth Warren

(AP Photo/Michael Dwyer)
The Boston Globe , Politico, and Huffington Post are all reporting that Senator-elect Elizabeth Warren has been granted her wish to get a seat on the Senate Banking Committee. This victory for progressives is huge. It means that Senate Majority Leader Harry Reid—who makes the committee selection, later ratified by the Democratic caucus—did not cave to pressure from either the financial lobby or from Senate Banking Committee Chairman, Tim Johnson of South Dakota, who is effectively part of that lobby. (South Dakota gutted its usury laws decades ago to make the state hospitable to the back office operations of the biggest banks.) It isn’t just that Warren is a resolute progressive. It’s that she knows so much about the financial industry, from her years as chair of the Congressional Oversight Panel for the TARP, and before that as one of the leading scholars of bankruptcy and consumer abuses. And it’s that she’s incorruptible, as well as very smart. More than your typical freshman...

Republicans, Exposed

(Flickr/David Silver)
President Barack Obama’s persistence has managed to smoke out House Speaker John Boehner and the Republicans. Their just-announced plan for cutting the deficit is what we suspected: cuts in Medicare and Social Security; no higher tax rates on the rich; limits on tax deductions that would hit the middle class as well as the wealthy, but only raise half the revenue of Obama’s plan; and a lot of fudging with numbers. The Republicans might as well be parading around with a sign that reads “Kick Me.” None of this stuff solves the real problem of getting a recovery going. If you believe that deficit reduction is required, it doesn’t even solve that. And the plan cuts into social insurance programs that are hugely popular, while Obama defends them. Best of all, the corporate deficit hawks marching under the banner “Fix the Debt” are left out in the cold. Nobody is emphasizing austerity as an economic cure. Corporate Democrat Erskine Bowles is yesterday’s news (sit down, please), almost as...

Greedy Geezers, Reconsidered

(Seymour Chwast)
F or three decades, conservative critics have been warning that the elderly are living too well at the expense of the young. Since the early 1980s, financier Peter G. Peterson has been predicting that Social Security’s excessive generosity would crash the retirement system and the economy. The late British journalist Henry Fairlie, in 1988, famously wrote a piece in The New Republic with the cover line “Greedy Geezers,” faulting the elderly for living too well at the expense of the young. (Seymour Chwast) Thanks to the economic boom of the late 1990s, senior bashing went into temporary eclipse. With full employment and rising wages, payroll tax receipts swelled the Social Security trust funds. In the three years between 1997 and 2000, the system’s projected year of reckoning—when it could no longer pay all of its claims—receded by eight years (from 2029 to 2037). At that rate, Social Security would soon be in perpetual surplus. All it took to balance the system’s books was decent wage...

Fix Gene Sperling

The corporate-led group, Fix the Debt, is having its latest conference next Tuesday, December 4. Fix the Debt wants massive cuts in Social Security and Medicare, of the sort that the Obama administration has pledged to resist. The usual suspects will be there—Michael Peterson who runs the Peter G. Peterson Foundation, Maya MacGuineas who heads the Committee for a Responsible Federal Budget, Stuart Butler of the Heritage Foundation, and several corporate CEOs. But look at who is providing cover for this rightwing crusade. Obama economic chief Gene Sperling is giving a major speech. Does one hand at the White House know what the other is doing? And liberals John Podesta and Neera Tanden of the Center for American Progress are also getting star billing, as is former AARP policy chief John Rother. Liberals should boycott this crowd and its austerity message, not lend it innocence by association.

A New, Tougher Obama?

(AP Photo)
In response to pushback from Congress and progressive activists following a report in Thursday’s Wall Street Journal that Obama had offered to be “flexible” on tax-rate hikes for the very richest, the White House formally unveiled a tough bargaining stance: $1.6 billion in tax increases over a decade, all on the top two brackets, and no tax hikes for the bottom 98 percent. The White House proposal included only $400 billion in spending cuts over a decade, none of which cut into Social Security or Medicare—details to be filled in later. Obama also proposed a change in the law to eliminate the obstructionist ritual of requiring a congressional vote to periodically increase the debt ceiling. (The debt increase has already been obligated by previous congressional actions, so the debt-ceiling vote is entirely redundant and nothing but an opportunity for mischief.) The Republicans, not surprisingly, dismissed the White House position out of hand. Two things are encouraging about Obama’s...

Snatching Defeat out of the Jaws of Victory

(AP Photo/Susan Walsh)
(AP Photo/Susan Walsh) Invited guests listen as President Barack Obama speaks in the Eisenhower Executive Office Building about extending middle-class tax cuts before they expire in January. The president said he believes that members of both parties can reach a framework on a debt-cutting deal before Christmas. P resident Barack Obama, to his great credit, has drawn a bright line. Taxes have to revert to the rates that were in effect before the Bush tax cuts for the richest 2 percent. This is crucial because the less the very rich pay, the more others have to pay either in the form of less tax relief for the bottom 98 percent or on program cuts like Social Security and Medicare. Or has he drawn that line? Yesterday, the White House put out the word that the president was willing to be “flexible” on the question of tax rates for the top bracket. Specifically, that means the president will accept the Republican idea of getting some of the needed revenue by closing loopholes rather than...

The Twinkie Defense

(AP Photo/Orlin Wagner)
You remember the Twinkie Defense? It was a term of ridicule coined by reporters covering the 1979 San Francisco murder trial of county supervisor Dan White. The right-wing White had assassinated both fellow supervisor Harvey Milk, a heroic figure in San Francisco’s gay community, and Mayor George Moscone. Lawyers for White claimed that he overdosed on Twinkies, and was acting under the delusional influence of a sugar high. Now, there is a new Twinkie Defense, and it is equally shameless and delusional. The Twinkie Defense is: the unions made us do it. For those who missed it, having perhaps spent the weekend on Jupiter, the iconic Twinkie brand is on the verge of extinction. The parent company of America’s beloved junk food, Hostess Brands, has been in bankruptcy since January 2012. In the bankruptcy proceeding, management has been leaning on the unions to go along with massive pay and benefit cuts to “save the company.” The bakers’ union, the largest at Hostess, voted by a 92-percent...

Fiscal Cliff: The End Game

(AP Photo/Charles Dharapak)
(AP Photo/Charles Dharapak) President Barack Obama makes an opening statement during his news conference yesterday in the East Room of the White House. The president says the economy cannot afford a tax increase on all Americans and is calling on congressional Republicans to support an extension of existing tax rates for households earning $250,000 or less. P resident Barack Obama continued to display a new toughness about the debt negotiation at his first post-election press conference yesterday. He confirmed publicly what he has been telling progressive leaders privately. He will not give on the principle that taxes—rates as well as loophole closings—must be raised on people earning over $250,000 a year. “We should not hold the middle class hostage while we debate tax cuts for the wealthy,” he declared. Obama has also told progressive leaders that he is looking for $600 billion more in other tax increases on the well-to-do, in order to reduce the pressure for spending cuts. And he...

Oil: The Bad News in the Good News

(Flickr/Mayhem Chaos)
(Flickr/Mayhem Chaos) An oil field near Bakerfield, California O n Monday, the International Energy Agency (IEA) came out with a stunner of a projection. The United States will replace Saudi Arabia as the world’s largest producer of oil by 2020, thanks to the unlocking of massive shale oil reserves. With hydro-fracking technology, the U.S. is riding a boom in natural gas as well. Oil production will increase from its current level of about 6 million barrels a day per year to 11 million barrels by 2020. Within a few years, the U.S. will be a net exporter. Pardon me if I don’t rejoice. This good news all but guarantees that the United States government, Democrat or Republican, will turn away from efforts to replace carbon fuels with clean, renewable energy. It guarantees another generation of relatively cheap gasoline for motorists—and an increase in the U.S. contribution to global climate change. Hundreds of thousands of people are still suffering the aftereffects of Hurricane Sandy...

The Dangers of Our Budget-Deficit Minuet

(Flickr/Austen Hufford)
The day after Barack Obama was re-elected, the Dow Jones lost 312.96 points. It wasn’t just that investors were hoping for the lower taxes and further deregulation that would have come with a Romney win. The news from Europe was bad, and pundits were obsessively focused on the “fiscal cliff” of mandatory budget cuts that will drive the economy into a new recession unless Congress jumps off its own budgetary cliff first. For once, the markets are right. But the news from Europe entirely contradicts conventional assumptions about the fiscal cliff. Greece, which has dutifully cut its budget as demanded by the leaders of the European Union and the European Central Bank, is deeper in depression than ever. The latest reports show that its economy has shrunk by more than 20 percent over four years and that the more that it cuts its deficit, the more its national debt grows. How can that be? Budget cutting in a depression just deepens the depression. The deeper the depression, the less...

Warren: Onto the National Stage

(Flickr/Tim Pierce)
It would not be an exaggeration to say that Elizabeth Warren instantly becomes the national leader of the progressive wing of the Democratic Party (Disclosure: Warren's daughter serves on The American Prospect 's governing board). She has plenty of company among newly elected Senate Democrats. Tammy Baldwin in Wisconsin, Joe Donnelly in Indiana, and Chris Murphy in Connecticut are well to the left of the people they succeeded. Conservatives who pulled the Democrats to the right on budget issues—Kent Conrad in North Dakota and Joe Lieberman in Connecticut—are mercifully in retirement. But taking nothing away from the other newcomers, it is Warren who is combination master strategist, principled progressive, and rock star. Not to mention a thoroughly authentic and delightful person. Massachusetts is a state that had never before elected a woman to the Senate and where Democrats have a very thin bench. Nobody else here could have beaten Scott Brown. But after a race that had Warren’s...

Sandy, Why Are You So Blue?

(Flickr/ds_leeter/NASA Goddard Photo and Video)
For all the speculation about the effect of Hurricane Sandy and its aftermath on the election, one important aspect has gotten surprisingly little attention: How many people will be unable to vote because of power outages, floods, and impaired transportation systems? How many will be deterred from voting because they are dealing with serious dislocations in their lives? And what new forms of Republican mischief will all this invite? Other things being equal, President Obama seems to have been the winner so far because of his impressive handling of the crisis. Chris Christie surely helped on the image front. But other things are not equal. Four days before the election, at least three million Americans are without power . And so are thousands of neighborhood polling places. Bus and subway lines are not fully operating, and there are gas shortages, especially in New Jersey. Both factors raise obstacles to people getting to the polls. Hundreds of thousands of people—conceivably more than...

Fix the Debt or Save the Coasts?

(Flickr/Chris Amelung)
One of the casualties of Hurricane Sandy is the premise that America’s biggest economic problem is deficit reduction. That’s because the United States just became a much larger version of the Netherlands. Once we get through the election, official Washington may be willing to talk about this. President Obama’s leadership in helping flooded communities cope with the damage nicely positions him to lead an effort to prevent future super-storm damage. As events like Sandy become more common, and the ocean levels rise even in the absence of hurricanes, the communities of the Eastern and Gulf seaboard will increasingly be at risk of regularly being underwater—unless we build a massive system of seawalls, dikes, levees, storm-surge barriers, and pumping facilities, as the Dutch have done for centuries. The immediate damage from Sandy will cost upwards of $50 billion. But looking forward, America’s seaboard cities will need to spend serious money not just on seawalls, but on public...

Chris Christie's Sly, Futile Move

(Flickr/New Jersey National Guard)
Once again, Barack Obama has proven to be the luckiest politician alive. Just when the race was tightening to a dead heat in the election’s closing days, one spectacular betrayal and one rank miscalculation on the Republican side have turned the contest back in Obama’s favor. New Jersey Governor Chris Christie, who will tour his storm-ravaged state today with President Obama, was all over the networks Tuesday telling what a wonderful leader his president was. “I spoke to the president three times yesterday,” Christie boasted, calling Obama “outstanding.” When Fox co-host Steve Doocy meekly asked Christie if he planned any events with Romney, Christie snarkily replied, “I have no idea nor am I the least bit concerned or interested.” Christie’s caper, of course, is so opportunist that it almost makes Mitt Romney look principled—almost. What a swell party of back-stabbers is our GOP. For Christie, who is up for re-election next year in a blue state, this caper accomplishes three things:...

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