Tag Archives: Peter Orszag

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.”

Cooking the Books: Fannie and Freddie Not In the Budget

04 Thursday Feb 2010

Posted by in economy, Financial Crisis, Obama, Politics, Uncategorized

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As if the staggering numbers that are in President Obama’s budget weren’t enough, take a look at what’s not there:

“Feb. 4 (Bloomberg) — Look through President Barack Obama’s proposed 2011 budget and you’ll see a line calling for a $235 million increase in the Justice Department’s funding to fight financial fraud. Lucky for them, the people who wrote the budget can’t be prosecuted for cooking the government’s books.

…They are keeping Fannie Mae and Freddie Mac off the government’s balance sheet and out of the federal budget, along with their $1.6 trillion of corporate debt and $4.7 trillion of mortgage obligations...Fannie and Freddie aren’t merely wards of the state. Practically speaking, they are the entire U.S. housing market. Their liabilities are the government’s liabilities.

White House budget director Peter Orszag on September 9, 2008, two days after Fannie and Freddie were seized, when he was director of the Congressional Budget Office:

“The degree of control exercised by the federal government over these entities is so strong that the best treatment is to incorporate them into the federal budget.”

That control is stronger today. Congress and the Treasury have given the companies a blank check to blow through whatever taxpayer money is necessary to keep the U.S. housing market afloat. Anyone buying large quantities of U.S. government bonds knows these liabilities exist. So why pretend they don’t?”

A good question for those who promised openness and transparency.

What Will Be Done About the Debt? Nothing

03 Wednesday Feb 2010

Posted by in Congress, economy, Obama, Politics

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The national debt is like the weather. Everybody talks about it, but nobody does anything about it. Nobody who CAN do something about it, that is. Reactions to President Obama’s proposed $3.83 trillion budget, which is projected to add $8.5 trillion to the debt over the next decade, prove that point, and can be summed up in a few words in this McClatchy article:

“Complicating the debt reduction picture is the desire by members of both parties to preserve what they see as important local programs, as well as to give themselves something to boast about in this election year.”

A few examples:

“There really isn’t anything in this budget which I can take home or talk about in favorable terms with respect to coal when I want to.” said Sen. Jay Rockefeller, D-W.Va.”

“Sen. Patty Murray, D-Wash., criticized Army Corps of Engineers funding. The Howard Hanson dam has been getting weaker and may not be able to control flooding in the Green River Valley, south of Seattle, she said.”

“Sen. Bernard Sanders, a Vermont independent..wanted the president’s proposed three-year freeze on non-defense discretionary spending to be extended to the Pentagon..[White House Budget Director Peter] Orszag said that wouldn’t be practical; Sen. Mark Warner, D-Va., agreed…”Because the nation is at war, we need to have more flexibility,” Warner said.”

One would think that a defense budget equal to the rest of the world’s military spending combined might have room for cuts somewhere. I guess one would be wrong.

OK, no defense cuts. What about entitlements?

“Orszag, who showed no emotion during his testimony, calmly said that Obama had a long-term plan to reduce the deficits, notably an as-yet un-appointed bipartisan commission to recommend remedies…Any commission recommendations also would have to be approved by Congress, where expected recommendations to cut the future costs of popular programs such as Social Security and Medicare and to raise taxes would face stiff resistance…There’s also no assurance that Congress will agree to a commission that has clout.”

So let’s review. Everybody in D.C. wants to reduce the debt and cut spending, but:

They won’t cut Defense.
They won’t cut entitlements.
They can’t stop paying interest on the debt.
They won’t cut any discretionary spending because it’s all somebody’s pet project or program.
They won’t raise taxes.

That leaves…….NOTHING.