Monthly Archives: December 2010

Obama Administration Pot Calls Out Pakistani Kettle

31 Friday Dec 2010

Posted by in Afghanistan, Bill of Rights, drone strikes, Justice Department, Obama, Obama administration, Pakistan, torture, war on terror

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From the Department of Blatant Hypocrisy, Do As I Say, Not As I Do Division:

“The Obama administration is expressing alarm over reports that thousands of political separatists and captured Taliban insurgents have disappeared into the hands of Pakistan’s police and security forces, and that some may have been tortured or killed.

The concern is over a steady stream of accounts from human rights groups that Pakistan’s security services have rounded up thousands of people over the past decade, mainly in Baluchistan, a vast and restive province far from the fight with the Taliban, and are holding them incommunicado without charges.”

Welcome to the Hotel Gitmo. You can check out any time you like, but you can never leave.

“Separately, the report also described concerns that the Pakistani military had killed unarmed members of the Taliban, rather than put them on trial.

…Two months ago, the United States took the unusual step of refusing to train or equip about a half-dozen Pakistani Army units that are believed to have killed unarmed prisoners and civilians during recent offensives against the Taliban. The most recent State Department report contains some of the administration’s most pointed language about accusations of such so-called extrajudicial killings.”

Kind of like this?

“From the moment he stepped foot inside the White House, Obama set about expanding and escalating a covert CIA program of “targeted killings” inside Pakistan, using Predator and Reaper drones armed with Hellfire missiles..that had been started by the Bush administration in 2004.

On 23 January 2009, just three days after being sworn in, Obama ordered his first set of air strikes inside Pakistan; one is said to have killed four Arab fighters linked to al-Qaida but the other hit the house of a pro-government tribal leader, killing him and four members of his family, including a five-year-old child.

…During his first nine months in office he authorised as many aerial attacks in Pakistan as George W Bush did in his final three years in the job…According to the New America Foundation thinktank in Washington DC, the number of US drone strikes in Pakistan more than doubled in 2010, to 115. That is an astonishing rate of around one bombing every three days inside a country with which the US is not at war.”

And then there’s this from the Obstruction of Justice Department, Look Forward Division:

“The U.S. Department of Justice has rejected a request from prosecutors in Warsaw for assistance in the investigation into the alleged CIA prisons in Poland, where captives claim they were tortured. On 18 March, the Prosecutor’s Office of Appeal in Warsaw filed a motion for legal assistance from the US Department of Justice into the probe…[T]he US informed prosecutors that the motion had been rejected on the basis of the international Agreement on Mutual Legal Assistance in Criminal Matters and that the U.S. authorities consider the matter “to be closed”.

So far, the U.S. Justice Department has failed to comply with its treaty obligations to supply information requested by prosecutors in Spain, Germany, Italy, and Poland who are probing allegations of kidnapping, false arrest, assault, and torture by persons believed to be CIA agents in connection with extraordinary rendition operations.”

This has, by far, been my biggest disappointment with the current administration. Legislative policies are one thing-legislation can be amended, superseded, or repealed. But by continuing, and in some cases expanding upon, the Bush administration “war on terror” tactics, and pursuing this “look forward, not back” lunacy, it has now become the accepted and established policy of two successive administrations—one Republican and one Democratic–that the United States of America now condones actions (indefinite detention without charges, denial of due process) that were once upon a time (pre-9/11) considered a violation of our Bill of Rights.

It also lets other countries that enter into treaties with us know that we will abide by the conditions of those treaties only so far as it is convenient and politically expedient for us to do so, and denies us any credibility on the world stage when it comes to the condemnation of other country’s human rights violations.

In short, we prove to the world that America is a nation of preachers and not practicers.

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Forecast for the Obama “Compromise”: “Weak Growth, Little Decline in Unemployment”

22 Wednesday Dec 2010

Posted by in budget, economy, Obama, Obama administration, Taxes, Unemployment

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Dean Baker writes at The Guardian:

“The enthusiasm of the US business press for the compromise tax package worked out by President Obama and Republicans in Congress led to a mini-euphoria of upbeat economic projections for 2011. While the economy will do better with this tax package than if no deal were forthcoming, much of the discussion has exaggerated the potential stimulus to the economy.

First, it is important to remember that although the total package is scored as costing almost $900bn over two years, almost everything in this package simply leaves in place current tax rates and spending. The biggest portion of the tax cut continues the tax rates put in place by President Bush in 2001. The continuation of these tax cuts, including a lower estate tax rate, accounts for almost $400bn of the $900bn.

Adding in the cost of a technical fix to the Alternative Minimum Tax, which is done every year, and the continuation of a series of smaller tax breaks, brings the total to $670bn. This portion of the package buys exactly zero stimulus, since it simply amounts to continuing tax policies already in place. Had these tax breaks not continued, it would have been a drag on growth, but their continuation does not provide any additional momentum to the economy. The $60bn cost of extending unemployment insurance for another year can also be put in this category.

The only net stimulus in this package comes from replacing the $60bn Making Work Pay tax credit in 2011 with a $110bn reduction in the payroll tax and the allowance full expensing of new investment. The latter is projected to cost $55bn a year for the next two years. The full expensing in this deal replaces a provision of the 2009 stimulus package that provided for 50% expensing, which means that the net boost to the economy is half this size.

In sum, the net stimulus for the economy from this package in 2011 will be in the range of $70bn, or about 0.5% of GDP. This is not likely to provide a substantial boost to growth.

While the tax deal will be a net positive to growth for 2011, there are many other factors that are pushing in the opposite direction. First, much of the spending in the original stimulus package will be coming to an end in the first two quarters of 2011. This includes both infrastructure spending for projects that will be nearing completion, and also assistance to state governments that allowed them to better weather difficult fiscal times.

State and local governments continue to face large budget shortfalls. They are finding it increasingly difficult to paper over their budgetary gaps (most state and local governments are required to run balanced budgets), and will have to resort to further cutbacks and tax increases in the year ahead.

House prices are once again falling, with the most recent data showing an 8.5% annual rate of decline. This pace is likely to accelerate in the months ahead. The housing market had been supported through the first half of 2010 by a first-time buyers’ tax credit. This had the effect of pulling many purchases forward from the second half of the year or 2011. As a result, sales have fallen by almost one third. As inventories build up again, many homeowners will be forced to make substantial price cuts to sell their houses.

Declining house prices will be another blow to consumption as homeowners recognise that they have lost even more wealth than their had previously believed. The current pace of decline implies a loss of more than $1tn in wealth over the course of a year. The actual loss of wealth could easily be twice as large if the rate of price decline accelerates.

Another factor depressing consumption is the recent bump in interest rates. While interest rates are still extremely low in both real and nominal terms, the current 10-year Treasury rate is close to a full percentage point above the lows hit in the late summer. This rise in interest rates will bring to an end the wave of mortgage refinancing that had helped to free up tens of billions of dollars for consumption. Relatively few homeowners will see much gain in refinancing at current mortgage rates.

It is also important to recognise just how slow the underlying rate of growth in the economy actually is. Most analysts have highlighted the overall GDP growth figure. But this number has been inflated over the last year by a rapid build-up of inventories. Over the last four quarters, GDP growth averaged 3.2%. However, final demand growth averaged just 1.3% over this period. In the most recent quarter, inventories were accumulating at almost the fastest rate on record. It is unlikely that the rate of inventory accumulation will accelerate further. Rather, the rate is likely to slow – meaning that inventories will be a net drag on growth in coming quarters.

In sum, there is every reason to expect that 2011 will be another year of weak growth, with little, if any, decline in the unemployment rate. The economy will be somewhat stronger as a result of this tax package being put in place, compared to a scenario in which nothing was done, but this is very far from the fabled “second stimulus” that some are acclaiming.”

Deficit Peacocks, Debt Ceilings, and Indefinite Detention

22 Wednesday Dec 2010

Posted by in budget, Congress, Constitution, economy, financial regulation, health care, Obama, Obama administration, Politics, Taxes, Unemployment, war on terror

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In a January 20 article at the Center for American Progress, Michael Linden differentiated between those who are serious about addressing our fiscal problems–the deficit hawks–from those who posture and preen about it—the deficit peacocks. Here’s how he defines a peacock:

“Deficit peacocks like to preen and call attention to themselves, but are not sincerely interested in taking the difficult but necessary steps toward a balanced budget. Peacocks prefer scoring political points to solving problems.”

This is one of Linden’s ways to spot a peacock:

“…people who now claim to be concerned about our fiscal future even though they recently supported massive budget-busting legislation…When someone supports a deficit commission one day and votes to use another $100 billion of red ink on tax cuts for the rich the next, it is perhaps an indication that his or her commitment to real deficit reduction leaves something to be desired.”

Cases in point:

“Sens. Saxby Chambliss (R-Ga.) and Mark Warner (D-Va.) on Monday said they will introduce a bill early next year based on the report from President Obama’s deficit commission.

Warner and Chambliss have been meeting with a group of 18 senators on finding a way to balance the budget, and said they have concluded the debt commission’s proposal is the best basis for bipartisan talks.”

The rest of the “Gang of Eighteen”:

“Roger Wicker (R-Miss.), Jon Tester (D-Mont.), Mike Johanns (R-Neb.), Ron Wyden (D-Ore.), Mike Crapo (R-Idaho), Kay Hagan (D-N.C.), Jim Risch (R-Idaho), Mark Udall (D-Colo.), Lamar Alexander (R-Tenn.), Michael Bennet (D-Colo.), Bob Corker (R-Tenn.), Jean Shaheen (D-N.H.), Amy Klobuchar (D-Minn.), Bill Nelson (D-Fla.), Dianne Feinstein (D-Calif.) and Mark Begich (D-Alaska).”

Fifteen of the eighteen, including both Chambliss and Warner voted for the tax cut extension last week. Only Wyden, Hagan, and Mark Udall have any credibility here. The rest are peacocks.

The vehicle Chambliss and others plan to use to get their desired spending cuts are negotiations over raising the debt ceiling limit (aka the next hostage situation), another can kicked down the road yesterday with passage of a Continuing Resolution to fund the government through March 4.

“Chambliss said on the call that an impending vote in Congress to raise the government’s debt ceiling…will be an important turning point. “It gives us a deadline to look to from the standpoint of getting some meaningful decisions mad …If we can use that as leverage that’s an ideal scenario,” Chambliss said.”

Ezra Klein has more on what this could mean for the future of health care reform and financial regulation reform:

“The good news is that law will keep the government’s lights on until early March. The bad news is that the law does it by extending 2010’s funding resolution — and that resolution didn’t include provisions for implementing the bills that were passed as the year went on.

…this is bad news for the health-care bill and the financial-regulation bill. There’s been a tendency to assume that the universe of options for passed legislation was binary: Either they went forward, or they get repealed. But with an angrily divided government, we may find ourselves in that little-known middle category: The Republicans can’t repeal them and the Democrats can’t fully fund them, and so rather than simply going forward, they limp forward.”

Klein doesn’t address it, but another question would be what does this does to unemployment benefits? Could the 13 month extension become 3? I guess we’ll find out in March.

Finally, this is what’s so confounding and confusing about the Obama administration. They take one step forward, with the repeal of Don’t Ask Don’t Tell, and then take two steps backward with this:

“The White House is preparing an Executive Order on indefinite detention that will provide periodic reviews of evidence against dozens of prisoners held at Guantanamo Bay, according to several administration officials.

The draft order, a version of which was first considered nearly 18 months ago, is expected to be signed by President Obama early in the New Year. The order allows for the possibility that detainees from countries like Yemen might be released if circumstances there change.

But the order establishes indefinite detention as a long-term Obama administration policy and makes clear that the White House alone will manage a review process for those it chooses to hold without charge or trial.

Nearly two years after Obama’s pledge to close the prison at Guantanamo, more inmates there are formally facing the prospect of lifelong detention and fewer are facing charges than the day Obama was elected.”

*Sigh*

A “Good Deal” For Who?

18 Saturday Dec 2010

Posted by in budget, Congress, economy, Obama, Politics, Taxes, Unemployment

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Now that President Obama’s “good deal” has been signed, sealed, and delivered thanks to the warm and fuzzy “spirit of compromise” floating around D.C. this holiday season, let’s take a look at who got goodies in their Christmas stocking and who got a lump of coal.

Republicans went into the lame-duck session with a letter to Majority Leader Reid, signed by all 42 Republican senators, stating that “any bill brought up before votes to extend the Bush-era tax cuts and a stop-gap funding bill to keep the government operating will be filibustered.” Those were their two main objectives—tax cut extension and stop-gap funding. They went two for two. As a bonus they also got a lower than expected estate tax.

The president gave them the first, after being, ahem, “forced” into it. Just as an aside, does anyone else find it strange that the tax cut extension got more votes in a Democratic-controlled House that the original Bush tax cuts did in a Republican-controlled one in 2001, 277–-240? But I digress.

Reid gave them the second on Thursday after another episode of Lucy and the football in which Republicans (surprise, surprise) reneged on their support for the omnibus spending bill. The result will likely be a short-term continuing resolution lasting a couple of months. At which time Republicans will control the House and demand ransom for their next “hostage”—the debt ceiling limit. Dave Dayen at Firedoglake:

“Republicans will have a chance in February of next year to set spending levels…And if anyone thinks that the result will not be a slashing of vital social safety net spending, take a look at how Reid folded last night, trading other priorities. The “stimulus” from the tax cut deal is GONE. It’ll be gone by February, at least. Republicans are fulfilling the Norquistian promise of lowering taxes massively, and then using that lack of revenue as a pretext to cut social spending. That’s what’ll happen in February. And the debt limit vote provides just another opportunity.”

But, as Laura Bassett at the Huffington Post points out, the cuts to safety net spending won’t have to wait until Republicans take over the House. Along with the working poor and the 99ers, there were others stiffed by the grand compromise:

“…federal funds for the Temporary Assistance For Needy Families (TANF) program have entirely dried up for the first time since 1996, leaving states with an average of 15 percent less federal funding for the coming year to help an ever-increasing number of needy families.

TANF, the federal program that replaced welfare under the Clinton Administration, provides a lifeline for families and workers who have exhausted all of their unemployment benefits. According to a new report by the Center for Budget and Policy Priorities, “more homeless families will go without shelter, fewer low-wage workers will receive help with child care expenses, and fewer families involved with the child welfare system will receive preventive services” now that Congress has passed legislation that will end funding for the TANF Contingency Fund in 2011.”

Other parts of this “deal” are that the GOP will supposedly allow the passage of DADT repeal and START. Don’t be surprised if Lucy makes another appearance before that gets done. Republicans also promised to allow the confirmation of four of President Obama’s nominees to the federal bench. Four out of 38.

What shrewd traders.

Six of One, Half Dozen of Another

16 Thursday Dec 2010

Posted by in Congress, economy, Politics, Social Security, Taxes, Unemployment

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This concludes another chapter in the ongoing saga of “It Doesn’t Matter Who You Vote For, You Get the Same Thing.” When all the smoke has been blown, and all the posturing and pontificating is done, this is what we get.

We get Sen. Sherrod Brown of Ohio, who once upon a time called the extension of the tax cuts “legislative extortion” voting yesterday to “pay the ransom.” Get used to paying, Sen. Brown. You’ll be doing a lot of that in the next two years. Next up, trading cuts in Medicare, Social Security, education, and whatever else the extortionists ask for, in exchange for raising the debt ceiling.

We get self-contradictory nonsense like this from Sen. Franken in the Huffington Post:

“Extending the excessive Bush tax breaks for millionaires and billionaires will explode our deficit over the next two years without doing anything to help our economy. I think it’s simply bad policy.

But…

…I got into this line of work because I wanted to stand up for Minnesota families trying to put food on the table and build a better life for their kids. And, for them, the only thing worse than a bad deal would be no deal at all. That’s why I voted yes yesterday — and why I will continue my fight for economic policies that create jobs, address our deficit problem, and build new opportunities for Minnesota.”

So even though this is a “bad deal” that will explode the deficit and won’t do anything to help the economy, Sen. Franken vows to fight for policies that address the deficit and create jobs. Sometime in the future, that is. Not now. Just trust him. By the way, senator, the lesser of two evils is still evil.

Sen. Franken is also “taking the president at his word that he will fight harder to put an end to these wasteful tax breaks in 2012 than he did in 2010.” Hold on to that dream, Al.

We get Majority Leader Reid calling passage of the package a “tremendous accomplishment,” and saying that it will “cut taxes for middle class families and small businesses, and ensure that Americans who are still looking for work will continue to have they safety net they rely on to make ends meet.”

Except for the 99ers, they’re SOL. And except for the working poor who will have their taxes raised while the “middle-class” folks like JPMorgan Chase CEO Jamie Dimon get a $1.179 million cut. And except for the deal laying the groundwork for cutting Social Security. Other than that it’s a tremendous accomplishment.

So next election, put all the names on a dartboard, close your eyes and throw. Democrat, Republican, whatever. Six of one, a half dozen of the other.

Senate Caves, House Soon to Follow

14 Tuesday Dec 2010

Posted by in budget, Congress, Democrats, economy, Obama, Taxes

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The Senate voted 83-15 yesterday to invoke cloture on President Obama’s sell-out compromise on the extension of the Bush tax cuts for the top 2%. Nine Democrats and Bernie Sanders voted “no.” The nine were: Jeff Bingaman (NM), Sherrod Brown (OH), Russ Feingold (WI), Kirsten Gillibrand (NY), Kay Hagan (NC), Frank Lautenberg (NJ), Pat Leahy (VT), Carl Levin (MI), and Mark Udall (CO). One of the poster children for duplicity and hypocrisy, Mary Landrieu of Louisiana, who previously said that the deal “borders on moral recklessness,” voted “yes.” I’m shocked.

The president is happy:

“For Mr. Obama, the Senate vote offered affirmation that his administration had made the most of what seemed to be a rough political predicament, in which it was [BS Alert] forced to negotiate a tax agreement with the Bush-era tax cuts set to expire at the end of the month and Congressional Republicans empowered by their big victory in the midterm elections.

“This proves that both parties can in fact work together to grow our economy and look out for the American people,” Mr. Obama said.”

Absolutely. Those tax cuts have done such a wonderful job growing the economy in the past decade, no reason to expect that won’t continue for the next decade and beyond. Oh, but I forgot. The president is going to fight to end these cuts in two years. And if you’ll buy that….

“Mr. Obama said he understood that there were lawmakers unhappy with parts of the plan on both sides of the aisle, and he and his aides have made clear in recent days that he [BS Alert, Part Two] still fiercely disagrees with the Republicans over extending the lower tax rates on annual incomes above $250,000 per couple or $200,000 per individual.”

Co-president Senate Minority Leader Mitch McConnell is also pleased:

“This bipartisan compromise represents an essential first step in tackling the debt — because in keeping taxes where they are, we are officially cutting off the spigot,” Mr. McConnell said in a floor speech.”

Cut off the spigot, aka starve the beast. Straight out of the Grover Norquist playbook for making government so small it can be drowned in a bathtub.

Don’t expect the final outcome in the House to be any different, after the dog and pony show, that is:

“By all indications, the anger and opposition to the deal among House Democrats shows no sign of abating. At the same time, however, House Dem leaders have sent very clear signs that despite their own unhappiness with the deal, they believe it would be irresponsible to sink the compromise and have no intention of thwarting the President’s will.

Here’s the challenge for House Dem leaders right now, as I understand it: Come up with a way for Dem members to vent their disapproval of the deal, so they don’t feel too stiffarmed and marginalized by the process, without it resulting in changes significant enough to cause Republicans to walk away.”

Heavens no. Let’s be sure we don’t do anything that might piss off the Republicans. Appeasement at all costs.

“The result could be a situation in which Dems hold a vote on amendments to the bill that are likely to fail… Dem leaders could hold a vote amending that provision, allowing Dem members to register disapproval. But the amendment would likely be opposed by almost all Republicans and some moderate Dems. So it would likely lose.”

Like I said. Dog and pony show.

Sen. Gillibrand had this to say:

“Although this deal includes important measures I have fiercely advocated for, extending Bush tax cuts for the very wealthy will saddle our children with billions of dollars of debt. With unemployment near 10 percent and a growing budget deficit, every dollar in this deal should be spent in a way that creates jobs and gets our economy growing, and tax cuts for millionaires and billionaires do not create jobs and will not help our economy grow.”

Creating jobs and getting the economy going. Not with more trickle-down bullshit, but the way China is doing it. Yes, China:

“The Chinese have doubled their spending on education – with stunning results – and continue to build the world’s best infrastructure. Reuters reports that Beijing is contemplating a plan to invest $1.5 trillion over the next five years in seven crucial industries. The targeted sectors are alternative energy, biotechnology, new-generation information technology, high-end equipment manufacturing, advanced materials, alternative-fuel cars, and energy-saving and environmentally friendly technologies…While China spends its money to invest in long-term growth, it lends us cash so that we can give ourselves [well, not all of ourselves, just the chosen few] one more big tax break. Someone in Beijing must be smiling.”

Not just smiling, laughing.

President Obama to Meet With Corporate CEOs

13 Monday Dec 2010

Posted by in budget, economy, Foreclosures, Obama, Politics, Social Security, special interests, Unemployment

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*Sigh*

“President Obama will host a roundtable with about 20 corporate chiefs on Wednesday, according to the White House, part of an attempt to ease strained relations with business.

Expected for the session at the Blair House, across the street from the White House, are executives from a range of industries, including American Express, Cisco Systems, Dow Chemical, Google, Motorola, Intel, UPS and PepsiCo, according to people involved in the planning. But the White House said it would not divulge attendees until the meeting.

With the mood for the meeting already lightened by his recent announcements of a trade deal with South Korea and a compromise on tax cuts with Congressional Republicans, Mr. Obama and the executives will discuss a variety of issues, said Jen Psaki, the White House deputy director of communications. Among the topics will be deficit reduction, an overhaul of the tax code, government regulation, export promotion, public-private investments in areas like technology and clean energy, and efforts to improve education and job skills, Ms. Psaki said.”

How about this “roundtable” Mr. President. How about meeting with the long-term unemployed—the 99ers—asking them how they intend to get by on the big, fat zero your “compromise” did for them? What about meeting with the firefighters and police who have been laid off due to state budget cuts, like in Camden, NJ where half of the police and a third of the firefighters are headed out the door.

What about meeting with the Social Security recipients who haven’t had a COLA increase in two years, and the federal workers whose pay you propose to freeze? Ask them how they’re going to handle rising gasoline prices, which could reach $3.50 a gallon by spring, and home heating oil prices, which are 13% more than last winter, brought on by Fed Chairman Bernanke’s “quantitative easing.” I guess they’ll have frozen homes to go along with their frozen pay. Ask the victims of foreclosure fraud how they feel about being denied legal aid by Treasury Secretary Geithner.

What about “easing strained relations” with these people? Or don’t they matter? Probably not. The unemployed, the laid off firefighters and police, Social Security recipients, and those facing foreclosure don’t write the checks with enough zeroes on them to finance that billion dollar re-election campaign like the CEOs do.

They’re Coming After Social Security

12 Sunday Dec 2010

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And it’s a bi-partisan effort:

“Both Sen. Kent Conrad (D-N.D.), the chairman of the Senate Budget Committee, and Rep. Paul Ryan (R-Wis.), the incoming chairman of the House Budget Committee, signaled that they’re preparing budgets that would seek cuts to government spending in order to address the deficit.

Conrad said he’d look to the recommendations by President Obama’s fiscal commission as a “starting point,” and then look to craft a budget that improves on those proposals.

“I have a list of things that I’d like to see improved. The domestic spending cuts went too far, because mandatory spending is really where the problem lies,” Conrad told Bloomberg Television in an interview to air this weekend. “That has now become about two-thirds of our budget, the so-called mandatory accounts — Social Security, Medicare and the rest. We’re going to have to achieve savings there, and we can do that without hurting Medicare beneficiaries.”

How much clearer can Conrad be? “Mandatory spending is where the problem lies.” Not defense. No problem there. The problem is with Social Security and Medicare, never mind that Social Security has not one damn thing to do with the deficit, it’s all the fault of Social Security and Medicare. But “we can do that without hurting Medicare beneficiaries.”

What does that leave?

“Both Conrad and Ryan were members of the catfood fiscal commission — the former supported the panel’s recommendations, while the latter voted against them.”

The latter voted against them because the spending cuts didn’t go far enough.

“The lawmakers cited an expected vote early next year to raise the U.S. debt limit as a turning point in the fight to reduce spending.

“We intend to do lots of spending cuts and lots of spending reforms as soon as we take over in January,” Ryan said. “The debt ceiling, obviously, is going to have to be increased if we’re not going to default, so the question is, what do we get in exchange for that, and what kind of fiscal controls?”

What do they get in exchange for that? They get to gut Social Security.

Senator Sanders on the Class War

11 Saturday Dec 2010

Posted by in budget, Clinton, Congress, economy, Financial Crisis, Obama, Politics, special interests, Taxes, too big to fail, Wall Street

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Just one small segment of Sen. Bernie Sanders’ marathon speech on the floor of the Senate yesterday, dealing with the class war and the winners and losers in that war:

“…in the year 2007, the top 1 percent of all income earners in the United States made 23.5 percent of all income. The top 1 percent earned 23.5 percent of all income–more than the entire bottom 50 percent.”

“From 1980-2005, 80% of all income went to the top 1%.”

Not much question who the winners are, and not much question now whose side President Obama is on. Charles Ferguson, director of Inside Job, wrote in Salon:

“It is…overwhelmingly clear that President Obama and his administration decided to side with the oligarchs — or at least not to challenge them. This raises the question of why they have made this choice, and whether it is a correct (in the sense of rationally self-interested) calculation on their part.

As to the “why,” several explanations have been proposed. One is that the president, as a matter of individual psychology, is extremely conflict-averse, preferring to avoid fights no matter how important. A second hypothesis is that the president is simply doing the most he can, given the political climate and the furious lobbying effort with which he is confronted. This explanation, however, is belied by [his] personnel appointments, among other evidence.”

The latest example of this is in President Obama’s choice for director of OMB. The new one, Jacob Lew, came from Citigroup. The old one, Peter Orszag, went to Citigroup. More Ferguson:

“A more disturbing possibility is that the Obama administration has simply codified a new strategic equilibrium in American politics, one first devised by the Clinton administration, in which both parties are supine with regard to the financial sector and the wealthy.”

President Obama brought out former President Clinton yesterday to endorse his “deal.” Bill Clinton, whose “bi-partisan outreach” during his administration left two ticking time bombs in the economy in the form of the repeal of Glass-Steagall, which created “too big to fail,” and the Commodity Futures Modernization Act, which banned the regulation of derivatives.

Sen. Sanders brought up the subject of free trade. Just last week President Obama signed the South Korean version of NAFTA. I hear Ross Perot’s giant sucking sound again.  All you need to know about the South Korean “deal” it is that it got two thumbs up from those two staunch defenders of the middle-class and working people–the Chamber of Commerce and Mitch McConnell.

As good as it was to hear Sen. Sanders’ speech yesterday, I fear he is just a voice crying in the wilderness. The president’s “deal” is now being loaded up with enough pork to buy enough votes to win passage. In short, the fix is in, the wealthy and powerful will win again. We keep going back to George Carlin, “It’s a big club and we’re not in it.”

Today on Let’s Make a Deal

09 Thursday Dec 2010

Posted by in budget, Congress, economy, Obama, Politics, Taxes

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The latest on “The Deal”:

President Obama at Tuesday’s press conference: [I]t’s a big, diverse country, and people have a lot of complicated positions, it means that in order to get stuff done we’re gonna compromise…This country was founded on compromise.”

Yesterday:

“Vice President Biden told House Democrats on Wednesday that the tax agreement the White House struck with Republicans was essentially final, forcing the divided caucus to decide whether to press its fight for changes in the package. “It’s up or down,” Biden told the caucus in a closed-door meeting, according to Rep. Yvette Clarke (D-N.Y.).

“So far as the administration is concerned, it’s take it or leave it,” Rep. Peter DeFazio (D-Ore.), one of the most vocal critics of the tax deal, told The Hill after the meeting. “I would say [Biden] was pretty specific about that.”

[…]

“It’s fair to say that he said, ‘We’ve negotiated with the Republicans, but we’re not going to negotiate with the Democrats,” Rep. Anthony Weiner (D-N.Y.) said in paraphrasing the vice president.

Larry Summers is saying, ‘One wrong move and the economy gets it.’

“One of President Obama’s top economic advisers warned on Wednesday that the nation could slip back into recession if Congress did not pass the administration’s tax cut deal with Republicans, as the White House sought to press Democrats into backing the plan.

“Failure to pass this bill in the next couple weeks would materially increase the risk that the economy would stall out and we would have a double-dip” recession, Mr. Summers told reporters at a briefing.”

But in September:

“Maintaining tax cuts for top wage-earners should take a back seat to other more pressing measures, White House economic advisor Larry Summers said…”With deficits looming as seriously as they are, why is now the right moment to lock in several hundred billion dollars of tax cuts for 2 percent of the population when we could be using those revenues to strengthen incentives for investment in the country’s future?”

What a difference 3 months makes.

President Obama’s Republican “friends” are making clear their intentions on the so-called “temporary” reduction in Social Security payroll taxes:

“Republicans acknowledged that the expiration of the tax holiday will be treated as a tax increase. “Once something like this goes into place, a year from now, when it expires, it’ll be portrayed as a tax increase,” said Sen. Bob Corker (R-Tenn.). So in a body like Congress, precedents matter and this is setting a precedent. I think that certainly is going to create some problems down the road if it passes.”

“Once you bring a rate down, if it goes back up, people will feel that. They’ll feel their paycheck being less and that argument” — that letting it expire amounts to a tax hike — “eventually is bound to be made,” said Sen. Mike Johanns (R-Neb.).

[…]

Lamar Alexander, the Senate’s number-three Republican, also said that reform of Social Security should be tied to moving that tax rate back up. “My personal hope is that it doesn’t become permanent unless we deal with a way to make Social Security solvent over the long term,” he told HuffPost. “You have to remember, the payroll tax funds Social Security and I like the idea of a lower payroll tax contribution, but we’ve got to make sure Social Security is solvent, which we should be doing this next year as the first order of business.” The way to make the program “solvent” and keep taxes low, of course, is to reduce benefits.

On a related note, this is what happens when you go down the road of giving in to the demands of “hostage takers.” The line starts to form:

“Here’s what Sen. Susan Collins (R-ME) told Senate Majority Leader Harry Reid that she needs to support a full Senate debate on the defense authorization bill (the vehicle for Don’t Ask, Don’t Tell repeal): 15 guaranteed votes on amendments (10 for Republicans, and 5 for Democrats), and somewhere around four days to debate the bill.

Senate Majority Leader Harry Reid already promised her the 15 amendments, but his initial offer was for a day or two of debate. Here’s her response to reporters tonight, after a Senate vote.

“The majority leader’s allotment of time for to debate those amendments was extremely short, so I have suggested doubling the amount of time, assuring that there would be votes, and making sure that the Republicans get to pick our own amendments as opposed to the Majority Leader.”

“If he does that I will do all that I can to help him proceed to the bill. But if he does not do that, then I will not,” she added.”