John Boehner, Speaker of the House, revealed why it’s politically naive for the president to offer up cuts in Social Security in the hope of getting Republicans to close some tax loopholes for the rich. “If the President believes these modest entitlement savings are needed to help shore up these programs, there’s no reason they should be held hostage for more tax hikes,” Boehner said in a statement released Friday.
There is something seriously off about the mission of the new Treasury secretary, Jack Lew, to Europe. Secretary Lew has been visiting European capitals to persuade leaders there to ease up on the austerity. He has not had a good reception.
Speaking at a joint press conference with the chagrined Lew in Berlin, Wolfgang Schauble, the German finance minister and uber-austerity enforcer, dressed down Lew thusly: “Nobody in Europe sees this contradiction between fiscal consolidation and growth.”
Nobody among the elite, that is.
Ordinary people in Greece, where output has declined by nearly 25 percent since the austerity tonic began, surely see the contradiction. So do young people in Spain, where the youth unemployment rate has reached 56 percent.
“For too long we have allowed some corporations to hold a gun to our heads and demand that we choose jobs or choose the earth.” That’s what Terry O’Sullivan, the general president of the Laborers International Union of North America, told green groups and fellow unions at a green-jobs conference in February 2009, just a few months after the union—one of the largest in the country—joined the Blue-Green Alliance, a group organized to advocate for a “clean economy.”
But by January 2012, O’Sullivan had made a choice. The climate bill had failed, the money from the recovery act had run out, political tides had turned against government spending, and the union was no longer so keen to partner with the environmental movement. “We’re repulsed by some of our supposed brothers and sisters lining up with job killers like the Sierra Club and the Natural Resources Defense Council to destroy the lives of working men and women,” O’Sullivan said. This heady “job killer” rhetoric was aimed not just at green groups but at unions like SEIU and the Communications Workers of America. They hadn’t had to do much earn this scorn. They had just opened their mouth about the Keystone XL pipeline.
Job creation slowed to just 88,000 in March, signaling a sluggish economy. And President Obama, with unerring timing, picked this moment to put out an authorized leak that he is willing to put Social Security and Medicare on the block as part of a grand budget bargain that will only slow the economy further. The deterioration in economic performance was all too predictable, given the combined lead weights of the March 1 $85 billion of budget cuts in the sequester and the January deal to raise payroll taxes by about $120 billion. (The tax hike on working people was almost double the much-hyped tax increase on the top one percent, which totaled a little over $60 billion.)
Their agreement is very preliminary and hasn’t yet even been blessed by the so-called Gang of Eight Senators working on immigration reform, but the mere fact that AFL-CIO President Richard Trumka and Chamber of Commerce President Thomas J. Donohue agreed on anything is remarkable.
I recently published an article in response to a study of high-frequency trading (“HFT”) by Professor Charles M. Jones of Columbia Business School and an opinion piece he published simultaneously in Politico. My article focused on the funding of the research by Citadel LLP, a major HFT user. It also pointed out broad concerns about the study, which asserts that computer-based algorithmic trading provides substantial net value to the economy.
Who says American politics is gridlocked? A tidal wave of politicians from both sides of the aisle who just a few years ago opposed same-sex marriage are now coming around to support it. Even if the Supreme Court were decide to do nothing about California’s Proposition 8 or DOMA, it would seem only matter of time before both were repealed. A significant number of elected officials who had been against allowing undocumented immigrants to become American citizens is now talking about “charting a path” for them; a bipartisan group of senators is expected to present a draft bill April 8. Even a few who were staunch gun advocates are now sounding more reasonable about background checks.
When the financial crisis struck in 2008, nearly every state legislature was left contending with massive revenue shortfalls. Every state legislature, that is, except North Dakota’s. In 2009, while other states were slashing budgets, North Dakota enjoyed its largest surplus. All through the Great Recession, as credit dried up and middle-class Americans lost their homes, the conservative, rural state chugged along with a low foreclosure rate and abundant credit for entrepreneurs looking for loans.
It's hard out there for a culture warrior. Every time an opponent of same-sex marriage does an interview these days, one of the first questions is, "Isn't your side on this issue doomed to failure?" They're even getting a cold shoulder from their own allies; after years of bashing hippies and wielding "God, guns, and gays" to great electoral effect, the leadership of the GOP would rather talk about anything else. And now it's Democrats who are happy to stoke the cultural fires, secure in the knowledge that the majority is on their side.
In a post yesterday, I said that it would be absurd for the federal government to produce its own brand of cola, not because doing so would make us all less free, but because there's just no need. Well lo and behold, today I find out that the state of Pennsylvania, where I used to live, has its own brand of mediocre wine, called Table Leaf. It's manufactured by a winery in California, but sold through state-owned Pennsylvania liquor stores. Does that seem nuts? Well, it starts to make sense when you recall that in Pennsylvania, the state has a virtual monopoly on liquor sales through the stores run by the Liquor Control Board. So in addition to making it incredibly inconvenient for you to buy a bottle of wine or other booze, they also are able to market their own house brand (at apparently inflated prices). In the decade I lived in the state, I never met a single person who thought the state monopoly wasn't ridiculous (polls show support for privatization to be strong, albeit not universal).
The first time Breanna found herself homeless, she’d left her mom’s house when she was 12 because her stepdad didn’t like her and her mom never took her side in fights. That had left her sharing a room in a Motel 6 with her father and sick grandmother near her high school in Jefferson County, Colorado. A short, slim, dark-haired Latina, she’d grown up in the area, and most of her family was there; it’s where she felt at home. In the motel, though, her dad, who was a drug addict, would occasionally beat her. “My Grandma would tell him I deserved it,” Breanna says. “I never understood why I deserved it.”
From the outside, it is hard to know that people live in the Ramada Inn. The parking lot is always empty. The hotel sits facing a wide suburban boulevard called Kipling Street, just off Interstate 70 in Wheat Ridge, Colorado. The interchange where Kipling meets the freeway is packed mornings and evenings with daily commuters going to or coming from Denver and with skiers heading west into the Rockies. Hotels dot I-70 as it cuts through the 764-square-mile stretch of suburbia that runs from the city into the mountains, but at the intersection with Kipling is a cluster of seven budget-savers that travel websites warn tourists away from. The hotels advertise low prices—ranging from $36 to $89 a night—on neon signs next to gigantic flags that whip in the Front Range wind. Most offer even lower weekly or monthly rates. The Ramada is farther from the frontage road than the other hotels and is harder to notice, with its plain yellow stucco and dimly lit red sign.
Prominent Democrats—including the president and House Minority Leader Nancy Pelosi—are openly suggesting that Medicare be means-tested and Social Security payments be reduced by applying a lower adjustment for inflation.
This is even before they’ve started budget negotiations with Republicans—who still refuse to raise taxes on the rich, close tax loopholes the rich depend on (such as hedge-fund and private-equity managers’ “carried interest”), increase capital gains taxes on the wealthy, cap their tax deductions, or tax financial transactions.
It’s not the first time Democrats have led with a compromise, but these particular pre-concessions are especially unwise.