Robert Kuttner

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:...

Fix the Debt, Destroy the Recovery

(AP Photo/Jim Cole)
David Walker announced his endorsement of Mitt Romney this week. The name might not ring a bell, but Walker was head of the Peter G. Peterson Foundation, the number one funder of deficit-hawkery in the United States. Walker, a former Comptroller General, has described himself and his crusade as bipartisan, and it is actually helpful that he has come out of the closet as a Republican. Lately, Walker has been deeply involved with the efforts to levitate the late Bowles-Simpson Commission as a template for deficit-reduction, and has been working closely with the corporate-funded “Fix the Debt” campaign of more than 100 CEOs lobbying for an austerity grand bargain. It’s worth unpacking the economics and the politics of the austerity lobby. The Fix the Debt campaign, much like the Bowles-Simpson Commission and the propaganda of the Peterson Foundation generally, contends that the projected national debt is depressing business willingness to invest now. Presumably, businesses are worried...

Turning the Cliff into a Launch Pad

One part of the dreaded fiscal cliff actually presents an opportunity that could be good politics and good economics. The temporary two-point cut in the payroll tax expires January 1 (along with the Bush tax cuts). The $1.2 billion sequester also kicks in. Deficit hawks of both parties have been saying that it’s irresponsible to extend the payroll tax cut, while defenders of Social Security like the American Association of Retired Persons (AARP) are opposed to an extension for fear of diverting revenue from the Social Security trust fundsand adding ammo to the crusade for cutting back the system’s benefits. But there is a nice opportunity here to turn a lemon into lemonade. The economy is hardly robust enough to inflict a two-point tax increase on working people. For two-income households, that’s a four-point increase. That means, say, a $2,400 tax hike on a $60,000 family income. Nobody is going to remember that this was temporary; they will simply experience it as a tax increase on...

A Good Debate, But Will Voters Notice?

(AP Photo/David Goldman)
(AP Photo/David Goldman) President Barack Obama and Republican presidential nominee Mitt Romney shake hands following their third presidential debate in Boca Raton, Florida. Obama did very well in the foreign-policy debate, but it remains to be seen if his success will change the trajectory of the race, which has been trending toward Romney. Several things about this debate were a surprise. The most surprising thing was the emergence of Mild Mitt. Romney sounded almost as if he were on downers. His campaign must have decided that he was coming across as too ferocious or two bellicose. But his performance tonight was underwhelming. Obama, by contrast, took the debate to Romney right from the first exchange. He was almost too aggressive, calling the former Massachusetts governor on his inconsistencies and policy recommendations that would have backfired. “Every time you’ve offered an opinion, you’ve been wrong,” the president said. But Romney did not take the bait. The other odd thing...

Too Close for Comfort

This was supposed to be about a six-point race in Obama's favor. That's sure how it looked on the eve of the first debate. But now it's dead even. What happened? First, of course, Romney cleaned Obama's clock in the first debate. Obama came back strong in debate number two, but evidently a lot of swing voters formed their impressions in that deadly first encounter. But there is a more fundamental problem here. The narrative of the past four years should have revolved around free-market ideology, Wall Street plunder, Republican rule, and the fact that Republicans first crashed the economy and then blocked a recovery. Obama did not hit any of those themes as forcefully as he needed to. The Tea Partiers, despite their billionaire backers, became agents of populist backlash. Obama was too conciliatory for far too long. The Republican Congress was able to persuade public opinion that the failure to make progress on everything from jobs to the budget was a symmetrical failure rather than...

Game, Set, Obama

(AP Photo/David Goldman) President Barack Obama laughs as he talks with audience members after the second presidential debate at Hofstra University. President Obama did what he needed to do tonight. He took the debate to Mitt Romney. He was relaxed, even jaunty, as he scored one point after another. He seemed to be enjoying himself at Romney’s expense. He looked more comfortable and commanding as the debate wore on, while Romney looked more stiff, edgy, and salesman-like. Obama needed to remind voters that Romney is a very rich man out of touch with regular people, and he did that well. He got in Romney’s face and he got under his skin, but stopped just short of being overly aggressive. You could tell right from the beginning that this was a very different Obama. When Romney touted his five-point plan to fix the economy, Obama responded scornfully, “Governor Romney doesn’t have a five-point plan, he has a one-point plan” and that plan is more tax breaks for the very rich who are...

Obama's Town Hall To-Do List

Here’s what President Obama needs to do tonight: Show leadership, resolve, and toughness Directly call Romney on his evasions and deceptions Demolish several of Romney’s outright lies Not pass up several opportunities to make points, as he did in the first debate Not make any major mistakes Take advantage of any Romney blunders Specifically: Refute Romney's claims that the Benghazi attack was Obama’s failure, and shame Romney for trying to make political hay of it Destroy Romney’s credibility on the budget, tax cuts for the wealthy, and Social Security Press Romney directly on which tax loopholes he’d close Remind voters that Romney is an out-of-touch rich guy, whose new-found identification with regular working people is a sham Associate Romney with Republican blockage of Obama’s efforts to promote a stronger economic recovery Push Romney hard on issues where he has changed his position or denies his real current position, such as abortion rights Demolish Republican talking points...

(Fiscal) Cliffs Notes

(Flickr/Matthew Wilkinson)
The most bizarre thing about the deficit and the campaign is the fact that the risk of a fiscal cliff—which everyone agrees will crash the economy—is being used to justify a slightly smaller fiscal cliff. There are several players here, so the arguments are worth sorting out. Herewith, some Cliffs Notes: What is the fiscal cliff? It comes in three parts. On January 1, the Bush tax cuts expire. This means that in the first pay period of the new year, more taxes are taken out of everyone’s withholding. Second, the temporary two-point cuts in payroll taxes expire too, so everyone’s Social Security and Medicare taxes go up as well. Third, the dreaded “sequester” of automatic budget cuts, the toxic fruit of the Republican blockade of a normal budget deal back in 2011, kick in. Oh, and extended unemployment benefits expire, too. What would all this fiscal tightening do to the recovery? It would create a new recession, according to the Congressional Budget Office (CBO), Fed Chairman Ben...

Nailing Jell-O to the Wall

Biden did a lot better than his president did in the first debate. But Obama still needs to hammer home all of the inconsistencies and evasions in the Romney-Ryan positions on such key issues as Social Security, Medicare, and taxation. Between moderator Martha Raddatz’s questioning and the vice-president’s persistence, the viewer just about grasped that the Romney-Ryan arithmetic was entirely bogus when the Republicans claim that there were $5 trillion worth of loopholes that can be closed to pay for new tax cuts without cutting programs, giving further breaks to the rich, or increasing the deficit. But Biden did not quite demand in so many words: Which loopholes would you close? What would they add up to? And (since the Republicans have no plausible answer) why aren’t you telling us? The Romney-Ryan position that these details would be worked out with Congress is, in Biden’s term, malarkey. But the viewer had to be paying careful attention to appreciate the full phoniness of the...

Obama: Giving Away Social Security

(AP/Rex Features)
Here is Mitt Romney’s proposal to cut Social Security benefits, from the Romney campaign website : First, for future generations of seniors, Mitt believes that the retirement age should be slowly increased to account for increases in longevity. Second, for future generations of seniors, Mitt believes that benefits should continue to grow but that the growth rate should be lower for those with higher incomes. In other words, cuts in benefits. In the first debate, I was waiting for President Obama to go to town on this. Instead, Obama had this to say: LEHRER: "Mr. President. Do you see a major difference between the two of you on Social Security?" OBAMA: "You know, I suspect that, on Social Security, we’ve got a somewhat similar position. Social Security is structurally sound. It’s going to have to be tweaked the way it was by Ronald Reagan and Speaker — Democratic Speaker Tip O’Neill." He’s got a similar position to Mitt Romney’s? On Social Security? Does this man just want to hand the...

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