Economy

"The Romney Rule"

Priorities USA, the Democratic consulting firm backed by former Clinton staffer Paul Begala, is out with its first ad attacking former Massachusetts governor Mitt Romney. It’s a good one: Like the The Washington Post ’s Greg Sargent , I think that this will be a potent line of attack should Romney become the Republican nominee for president. As the wealthiest GOP candidate for president, Romney is uniquely ill-suited to press against higher taxes for the richest Americans, and for an overall low tax burden on the wealthy. Indeed, given the current popularity of higher taxes on the rich – and the growing popularity of Occupy Wall Street – an election fought on these grounds is bad territory for the Romney campaign. I should say that there is a practical policy danger in devoting so much attention to taxes for the rich. In the medium-term, middle-class taxes will have to go up. Unless we return to Clinton-era rates, there is no way – other than new taxes on consumption or carbon – to...

Blame and How to Give It

That Senate Republicans used the filibuster to kill a Democratic stimulus bill isn’t a surprise – at this point, Republicans have all but announced their plan to keep the economy from significantly improving, and as a result, slash the tires on President Obama’s bid for re-election. What comes as a surprise is the extent to which the press isn’t playing along. In the past, reporters would describe yesterday's event with “balanced” language that obscured Republican responsibility for the obstruction. For example, here’s how The New York Times described last week’s failed vote on the full American Jobs Act: In a major setback for President Obama, the Senate on Tuesday blocked consideration of his $447 billion jobs bill, forcing the White House and Congressional Democrats to scramble to salvage parts of the plan, the centerpiece of Mr. Obama’s push to revive a listless economy. The legislation, announced with fanfare by the president at a joint session of Congress last month, fell short...

Occupy the Rules Committee

For last two months, we’ve been engaged in something of a natural experiment to see if presidential speechifying—in this case, a consistent focus on jobs—is enough to move public opinion in a progressive direction and create avenues for legislative success. So far, that hasn’t been the case. Instead, Republicans have taken their usual position of staunch opposition, and moderate Democrats have given them cover by opposing the administration’s modest efforts to raise taxes and offset the costs of new stimulus. What has changed the direction of public opinion is Occupy Wall Street, so much so that majorities of Americans agree with the goals of the movement, and conservative figures like House Majority Leader Eric Cantor are driven to acknowledge America’s extreme inequality. Of course, even if Occupy Wall Street grows in size and influence, there’s still the question of institutional barriers. As long as a political incentive for the filibuster exists, for example, there’s a real limit...

The NYPD: A Movement's Best Friend

Occupy Wall Street's confrontations with police and politicians have only fueled the protest's growth.

NYPD clashes with Occupy Wall Street protesters have made the demonstration a national story. AP Photo/Mary Altaffer
Tensions at Zuccotti Park in lower Manhattan mounted last week after New York City Mayor Michael Bloomberg announced that Occupy Wall Street activists would need to vacate the premises temporarily for cleaning. In response to the threat, occupiers cleaned the park themselves and said that, come morning, they would hold brooms, link arms, and peacefully refuse to leave. Bloomberg backed down, and once more, Occupy Wall Street confirmed that it could endure in the face of resistance from politicians and police. A better question is whether the movement could have endured without the attention and momentum it's gained from confrontation. “Seeing what happened at the Brooklyn Bridge ... that was a wake-up call," says Armando Serrano, referring to the arrest of 700 protesters on the bridge earlier this month. The number of arrests, and allegations that police lured protesters to the area where they took place, inspired a new wave of activists and catapaulted the movement to the forefront...

Must-See OWS Clip

This you gotta see. Really. ... in which Alec Baldwin very nicely talks with an Occupy Wall Street whacko and explains that what we really need is an active SEC, not one that's in the pocket of the banks.

More Reagan than Reagan

The two leading stories on the nightly news for the past week have been the Occupy Wall Street protests and the Republican primary race, a contrast so vivid that the reports could be coming from two different planets. First, we see thousands of citizens so frustrated and angry with economic inequality in the U.S. that they have organized to protest in hundreds of cities around the country. Then we see a group of contenders for president agree that the only economic problem we have is that wealth and influence are not sufficiently concentrated at the top. For the GOP, the protests renew an old dilemma. When Ronald Reagan became president, Democrats charged that he would was guided by the theory of "trickle-down economics," in which benefits are bestowed upon the wealthy, and the blessings eventually trickle down to the rest of the country — i.e. , the 99 percent. Republicans replied indignantly that this phrase misrepresented Reagan's agenda; they preferred "...

Homeowners Alone

I f you couldn’t pay your debts in the 19th century, you went to jail. Debtors’ prison seemed an appropriate punishment for what was then considered moral laxity. The problem was that when debtors were locked up, they couldn’t work off their debts or be productive citizens. That’s why bankruptcy was invented. We seem to have forgotten this history when it comes to the biggest debt burden still hobbling most Americans—their home mortgage. Home values continue to drop. Since 2005, they’ve plummeted more than 30 percent on average and are expected to drop another 2.5 percent this year. That leaves one in five American homeowners “underwater”—owing more than their home is worth. The result is a new form of debtors’ prison. Underwater homeowners can’t refinance at today’s rock-bottom interest rates, because they’re considered bad credit risks. They can’t move to where jobs are more plentiful or the pay is better, because if they sell their home, they end up owing the banks a bundle. But if...

The Medicare Bind

M edicare now faces a more uncertain future than at any time in its history. That’s not because it has lost popularity or failed to control costs as effectively as private insurance has. On the contrary, the program continues to enjoy overwhelming public support, and since the late 1990s, its costs per beneficiary have grown more slowly than those of private insurers. Nor does Medicare confront an imminent crisis; in fact, its costs have decelerated in the past year. But with the aging of the baby-boom generation and the general trend toward higher health expenditures, federal spending on Medicare is set to increase sharply over the next decade, making it a prime target for deficit reduction. Seizing on projected deficits as their rationale, Republicans have called for a drastic solution: eliminating the traditional, public Medicare program in favor of a voucher for private insurance, which would save the government money by paying a diminished share of health costs and shifting...

History's Missed Moment

Why did the greatest failure of laissez-faire capitalism since the Great Depression lead to a turn to the right rather than the left in both Europe and the U.S.?

(Sipa via AP Images) President of France's far-right National Front party Marine Le Pen gives a press conference after protesting a French National Assembly vote that authorized a 15 billion euro aid package for Greece.
The epic financial crash of 2007–2008 should have produced a massive political defeat for the conservative ideology whose resurgence began three decades ago. Its signal achievement, liberated finance, did not reward innovation, enhance economic efficiency, or produce broad prosperity. Rather, the result was a speculative bubble followed by a severe crash. Along the way, the super-rich captured a disproportionate share of the economy’s gains, while other incomes stagnated. In the aftermath, ordinary people have suffered large losses of earnings, assets, social protections, and hopes for their children. By any measure, therefore, 2008 was primed to be a political watershed on a par with 1932. History delivered a profound teachable moment for American progressives and European social democrats. But, to borrow from T.S. Eliot, between the idea and the reality fell the shadow. Three years after the financial dominoes toppled, right-wing ideas are ascendant and right-wing policies reign...

I Ruined the Economy and All I Got Were These Lousy Tax Cuts

Will the GOP's budget plan spark a double-dip recession?

(Flickr/Medill DC)
Last week, Ben Bernanke delivered a speech in which he agreed that the government should reduce the deficit. However, he cautioned, "a sharp fiscal consolidation focused on the very near term could be self-defeating if it were to undercut the still-fragile recovery." In economist speak, that's a warning to Vice President Joe Biden and the handful of congressional leaders he has assembled to tackle the deficit: Don't cut spending too fast or you'll kill the economy. Already, the federal government's limit on the amount it can borrow has been reached, and Treasury Secretary Tim Geithner has warned that the government is now taking "extraordinary measures" to meet its obligations. Yet Republicans refuse to raise the limit without big cuts to government spending. Also last week, Sen. Jon Kyl, a Republican from Arizona and a member of the Biden negotiating team, reiterated his party's demand : Every dollar the debt ceiling is increased must be accompanied by at least a dollar in spending...

On Again, Off Again

The growing rift between Republicans and Wall Street.

(Flickr/pinksherbert)
Do Republican leaders in Congress answer to Tea Party activists or to Wall Street? That question will be answered in the next few weeks as the debt-ceiling fight comes to a head. The choice that GOP leaders make will influence more than fiscal policy or the financial markets; it will also shape the 2012 election and reveal the true identity of today's Republican Party. Wall Street has been urging Republicans to approve more government borrowing for months, arguing that it is too risky to use the debt-ceiling cap as a hostage in the budget battle. That message was delivered during a series of meetings in April between GOP leaders and top Wall Street executives and has been repeated often by the finance sector's ubiquitous lobbyists on Capitol Hill. As Rep. Michael Grimm, a Republican from Staten Island told The Wall Street Journal : "Wall Street understands that if we default on our obligations, our markets are going to crash. ... They're doing their job and talking to a lot of members...

Strongest Progressive in the Room

Elizabeth Warren: Consumer bureau chief or U.S. senator?

(AP Photo/Manuel Balce Ceneta)Elizabeth Warren
E lizabeth Warren, the Harvard law professor serving as temporary head of the Consumer Financial Protection Bureau (CFPB), must wish she had a clone. One would stay in Washington to fight for the strongest possible consumer financial protection bureau, doing battle with predators in the financial industry, their Republican allies in Congress, and fainthearted colleagues at the Treasury. The other Warren would run for the Senate in Massachusetts. Both of these are hugely important jobs, but of course, there is only one Elizabeth Warren. Though Warren has her heart set on the consumer bureau job -- an agency that she devised and worked to keep in strong form in the Dodd-Frank Act -- there is increasing pressure on her to run for the Senate from Massachusetts. And while Warren's supporters need to keep urging President Barack Obama to make a strong appointment to a strong consumer agency, Warren may well conclude that the more important service to her country and to American...

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