Wednesday, August 03, 2011

Sealing our fates one last time

Updated Everyone else has chimed in on it, so I suppose I feel obligated to offer my take on the debt ceiling deal. So here it is.

The debt ceiling deal is hideous, a disgrace, a monstrosity; it's an affront to justice, an insult to our intelligence, and above all a clear demonstration of on whose behalf "our" government actually works.

It is capitulation camouflaged as compromise; it is a right-winger’s wet dream, with all of the burden placed on the poor and what remains of the middle class, while the rich and the comfortable and the corporations and their paid-for flunkies go untouched. Listening to wingnuts grouse and gripe about how the deal "betrayed their goals" (I originally wrote "principles" but I didn't like the implication that they have any) is like listening to a whining two-year old throwing a tantrum because they got only nine of the ten pieces of candy on a plate.

Very briefly, here's what is in the deal: An immediate increase in the debt ceiling of $400 billion with another $500 billion in September, which latter amount hypothetically could be blocked by Congress but won't be. This is coupled with $917 billion in spending cuts over the next 10 years. Certain programs, including Social Security, Medicaid, WIC, veterans’ benefits, and some others are exempt, which just means deeper cuts everywhere else: SNAP (i.e., food aid), housing aid, LIHEAP (i.e., heating assistance), TANF (i.e., welfare), jobs programs, unemployment assistance, education, infrastructure, science, environmental protection, transportation, and more. What it does not involve (of course) is any tax increases of any sort.

It also sets up a “Super Congress” or "super committee" of doubtful Constitutionality. (But who's going to challenge it and if they did and if the courts accepted the challenge, itself a questionable proposition, what are the chances a decision could be rendered in time?) It would include three Dims and three GOPpers from each house (independents, it seems, need not apply) for a total of 12.

This Super Congress - or, by appropriate abbreviation, the SuperCon - is to identify at least $1.2 trillion in additional deficit reduction. Nothing is exempt. Everything, including "the big three" of Social Security, Medicare, and Medicaid, can be targeted. Hypothetically, targets could also include “revenue enhancements,” but beyond the possibility of limitation or elimination of tax deductions most useful to the middle class, such as home mortgage interest and medical expenses, I expect the chances of any such "enhancements" being included are just a tiny fraction this side of are you kidding.

The SuperCon reports by November 23; its proposals, which cannot be changed, amended, or filibustered, are fast-tracked to an up-or-down vote by December 23. If they are passed, there is a dollar-for-dollar increase in the debt ceiling. If they are not or if the SuperCon can't reach an agreement, a likely possibility, the debt ceiling can be raised an additional $1.2 trillion but that triggers automatic across the board dollar-for-dollar cuts in federal spending. Again, no tax hikes.

(It also requires both houses to have a vote on a Balanced Budget Amendment, which will give some people the opportunity to strut and posture for the benefit of their Toilet Paper - excuse me, Tea Party - constituency, but means little beyond that.)

Oh, and something else: Rep. Barney Frank said that he had planned to vote yes until he learned more about some of the details, including that cuts in military spending are only guaranteed for the first two of those 10 years and that none of the cuts can come from expenses for the wars in Iraq and Afghanistan, which continue to drain hundreds of billions of dollars annually even as increasing majorities of Americans oppose them.

What does all of this mean? It means that, in thrall to their banker masters and cowed by the bluster of the ratings agencies (in fact, of only one such agency; Standard & Poor's was the only one to make a big fuss while the other two of the big three just muttered a little), the leaders of "our" government agreed to spend less at a time when they need to spend more and invest less in the economy at a time they need to invest more. What they did, in short, was good for the banks, good for the investment houses, good for the bond-holding rich, but destructive for the rest of us.

The fact, which will come as no surprise to you, is that we still live in a depressed economy: Only 18,000 jobs were created in June. Eighteen thousand! During the first six month of 2011, the economy grew only as fast as the population - in other words, it essentially went nowhere. And now the feds are going to spend even less than they would have. Which is incredibly stupid and will only depress the economy further.

"But oh no, that's not true!" cry the slick and the sycophants. "This will show The Market (pbiu) that we are Serious About Controlling Spending (on things important to you, not to us, they add under their breath)! That will give businesses Confidence! The Confidence needed for them to invest! To create jobs! To grow the economy! Confidence, we say, Confidence!"

Which only goes to prove we have a government full of confidence men.

Look, I've noted this before: Corporations are now sitting on record amounts of cash and raking in record levels of profit. That should give them all the confidence they need - especially since, hey, isn't profit supposed to be the reward for risk? Why should we have to assure them there is no risk before they'll get off their cash-soaked butts and do something? (Or does that answer itself?)

Claiming all businesses need is "confidence" flies in the face both of the historical record and of plain logic. If they were going to invest, they already have the means and they clearly have the opportunity. What they don't have is the desire.

Because the simple fact is, businesses are not going to hire people they don’t need. If you have a job, great, I'm happy for you. But you need to understand that the owners of the business you work for don't see you as a benefit, they see you as an unhappily necessary cost, one that they would just as soon be rid of if the bottom line allowed for it. Businesses, to put it differently, are not going to hire you unless they think that the benefit to their profit outweighs the cost that you represent.

To put it a third way, they are not going to hire you to produce goods and services no one is buying.

The simple fact is that the claim that "business creates jobs" is utter bullshit. Complete malarky. Thoroughgoing crap. No matter what you've been told, no matter what you think, with the possible exception of some sort of goddam lefty do-gooder outfit, no business has ever created a job. They haven't. Period.

At the same time, let it be said that one way the right wing is correct is that it's also true that, at least for the most part, government does not create jobs.

Demand creates jobs! The demand for goods and services which government can supply or private businesses can sell. And while the government can't create jobs, what it can do, and do it in a way and to a degree of which private industry is simply incapable, is create demand.

Government can create demand by spending, by spending money on goods and especially on supplying services which people need. It can do it by putting money into the hands of people either by social programs or by direct employment on government projects. It can do it by redistributing income from people who won't spend it because they have more than they can use, to people who will spend it because they need the goods and services which that money can obtain. And it can do that by raising taxes on those who dammit have the money to redistribute.

But instead, government is going to shrink, is going to do less. And in so doing, "our" government is denying, betraying, repudiating, one of the basic reasons for its existence. (Governments are instituted among men to secure the unalienable rights of life, liberty and the pursuit of happiness. Sound familiar?) And so it is denying, betraying, and repudiating us.

The result for you? Richard Eskow ran down some of it at a Campaign for America's Future blog:

- If you're out of work, you’re less likely to find it. If you've got a job, you're less likely keep it. if you do manage to keep it, you’re less likely to get a raise.

- If you have a house, you’re more likely to lose it because help for distressed homeowners is off the table, so foreclosures will continue unabated. If you have a house and manage to keep it, its value is more likely to go down as communities continue to have local values depressed.

- Your social security benefits will be lower. I've mentioned this before; it's the plan to switch methods of calculating the Cost of Living Adjustments (COLAs) for Social Security from CPI to "chained-CPI" a change that will guarantee (yes, guarantee) smaller COLAs in the future, creating a stealth benefit cut, stealth because since you'd still get an increase, the hope is you won't notice it's less of an increase than it would have been otherwise - and that difference, of course, is a benefit cut.

Eskow also raises the possibility of a large tax increase via eliminations of middle-class-friendly deductions. That certainly is a possibility, as I mentioned above - but I have to say I think it's unlikely. The GOPpers are rigidly committed, politically and ideologically, to the idea of "no tax increases" (and no matter how many times they intoned "revenue enhancements" instead of "tax increases," their TPer base, with its tax radar always on full alert, would not be fooled) so I don't see that coming out of the SuperCon. In fact, I predict that group will, absent another Dummycrat capitulation (which is always a possibility) deadlock. That would lead to the triggered cuts - which again do not involve tax hikes. So I don't expect any significant tax increases.

What I do expect, however, and something Eskow doesn't mention, is that your Medicare costs will go up, perhaps by 15% or more. Part of the debt ceiling agreement is that Medicare is supposed to be cut by no more than 2% and the cuts will be directed against “providers,” not beneficiaries - the cuts will come from reducing the amounts paid to doctors and hospitals. Doctors and hospitals, that is, who already complain about the low rates which Medicare pays.

Cutting payments to providers, quite bluntly, will lead to fewer physicians accepting Medicare patients and fewer of those who do accepting assignment, with the net result for you of higher out-of-pocket expenses and fewer doctors from which to choose.

What will be the overall result? A good summary, oddly enough, came from Mohamed El-Erian, the CEO of a bond investment firm called Pimco, who said:
Unemployment will be higher than it would have been otherwise.... Growth will be lower than it would be otherwise. And inequality will be worse than it would be otherwise.
The honor of the best description of the deal, however, goes to Rep. Emanuel Cleaver, chair of the Congressional Black Caucus, who called it a "sugar-coated Satan sandwich." In fact, I very much think he wanted to use a different s-word, but he was, after all, on television at the time.

Still, I suppose in one sense, the deal should not be surprising: It's just another front in the on-going, ugly war being waged against the middle class and the poor, a decades-long attack that no longer resembles class war so much as it does class annihilation, as a century of slow aching progress toward justice is beaten back and the gap between rich and poor - indeed, between the rich and the rest - now yawns as widely as it did more than 80 years ago, a chasm that "compromises" such as this, delivered by "our" government, will make even wider.

It's past time for anger, even for outrage. It's time for cold fury, the kind of focused rage that spends itself neither in the perhaps momentarily satisfying but still pointlessness of violence nor in directionless emotion but which drives concentrated, conscious action. Yes, petition, talk to neighbors, write letters to the editor, call your representative, lobby, vote (if you still can with all the roadblocks being erected), do all that stuff.

But face a hard fact: We've been doing that. focusing on that. We've been doing it for how long? Since at least Bill Clinton, when the Kewl Kidz decided that stuff like demonstrations were icky and uncool and like, so, y'know, so '60s 'n' stuff and how they weren't going to waste time on that sort of stuff, that they were going to be Serious People. And where has it gotten us? It has gotten us recession, an increasing economic divide, and our big success, a president who thinks being "the adult in the room" means repeatedly rolling over in the face of an opposition that has come - with good cause - to count on him caving. Watching Barack Obama "negotiate" and "stand firm" is like watching a parent who has forgotten who the parent is, being worn down by a foot-stomping brat screeching "No!" and "I don't wanna!" and "Gimmie!" It has gotten us failure and betrayal.

So yes, absolutely: Write letters. Make phone calls. Petition, lobby, vote, do all of it. Yes.

But face the fact that that will not be enough. It never was. It never has been. It can get you some short-term victories, win you some elections, but it can't sustain a drive for real progress - that is, measurable, meaningful, and instituted progress of a sort that can't easily be undone. Not as long as there is no penalty for those we elect, for those we pinned our hopes on, when they ignore us, which they will as long as they know we will continue to vote for them even in the face of their betrayal because after all, god forbid a GOPper should win!

So no, it's not enough. We need to be angry and more importantly to be visibly angry. We need to be on the streets, dammit. We need to generate the sort of social disruption that characterized the '60s, yes, the dreaded '60s. We need to take those forces, economic and social and political, that have turned their backs on us, on justice, on fairness, on equality, on what is right in order to curry favor with (and sometimes become) the aristocracy which we deny we have, and we need to make their lives miserable. We need to harass them, embarrass them, mock them, ridicule them, picket them, protest them, wherever they gather whenever they gather. We need small groups picketing, we need mass numbers marching in the streets, we need guerrilla theater, we need civil disobedience, we need it all.

Do not underestimate the difficulties here; I don't: Police and other forces of repression have become much more adept at achieving the goal of providing a quiet life for the elites, a life untroubled by any noise from the riff-raff. Determination is vital and courtesy may sometimes be a (temporary) victim of circumstances.

But what's even more important in the face of that possibility is creativity. I was recalling earlier today an incident back in the day when the Air Force parked a Minuteman ICBM at a local shopping mall as part of an exhibit. A small group of us made a plan to protest the display (and nuclear arms) by having a couple of us rush at the missile (which was surrounded only with theater stanchions and velour rope), taping "Practice Nonviolence" cards all over it, while a few others passed out leaflets designed for the occasion, after which we'd take off. It was supposed to be over in less than five minutes - and in thinking about it now, I thought of it as being kind of like a politically-oriented flash mob. That kind of action - show up, do it, and go - may become more important if cities continue to increase efforts to prevent any sort of mass rallies. The important thing is that they are visible. And that, more than anything else, is what we have to be now.

Because we have been ignored and we have been betrayed. Forty-five Dummycrat Senators voted for this hideous deal, including a number of liberal heroes like Barbara Boxer, Sherrod Brown, Sheldon Whitehouse, John Kerry, Ron Wyden, and Al Franken. In the House, 95 of the "We're on your side! Really!" party voted Aye, including, again, several liberal heroes, like James Clyburn, Luis Gutierrez, Nancy Pelosi, and Debbie Wasserman-Schultz. I'm sure that some of them echoed Cleaver's description of the bill - Pelosi, for one, did - but the way you deal with a Linkshit sandwich is not by eating it but by stuffing it back in the face of the person who pushed it on you. And that they utterly failed to do in an act that revealed when push comes to shove which side they are on and which should, if justice is ultimately done, see them on the dustbin of political history.

And if that sounds like I am willing to see, would even like to see, some "good people" lose elections, yes, I am. Because the way - the only way - to win is to be willing to lose. That's what we haven't been but what we need to be. I suspect that over the next several months we're going to find out if we are willing. And if we're not - we have already lost.

Updated with a Correction: The original version of this post said that credit ratings agency Moody's was "the only one to make a big fuss" about the US credit rating; in fact it was Standard & Poor's. The post has been corrected to reflect that.

Interestingly, S&P started mouthing off about reducing the US's credit rating shortly after the passage of the Dodd-Frank financial reform bill in July 2010. That bill subjected the credit ratings agencies to a bit more oversight and a slightly-higher standard of conduct. S&P has renewed the threat to downgrade the rating several times since, although the justification has varied. And now they have, of course, downgraded the rating despite having offered a variety of shifting explanations and despite having made a whopping $2 trillion error in their projection of future deficits.

S&P, by the way, is being investigated by the SEC for possible civil fraud in its ratings of mortgage debt leading up to the blowup of the housing market in 2008 and the question is being raised if the threat of rating downgrades is being used to pressure the government to drop the case.

(Thanks to Firedoglake for the above.)


JayV said...

I've enjoyed your recent posts on this current DC tragi-comedy.

Rep. Peter Welch was for the debt ceiling deal before he was against it. Then again, he would have voted for it anyway, but he didn't have to ... because it was going to pass anyway. Oh, yeah and "shared sacrifice!" Read on ...

My new name for him is Weasel Welch.

Lotus said...

Reading that bit a bout Welch was almost painful. It is the absolutely ideal example of wanting to have it both ways, to be able to posture for your base about how "unfair" the bill is while actually supporting its passage.

Obviously, it's not only the right which is guilty of that sort of hypocrisy.

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