Thursday, August 25, 2011
August 25, 2011
Americans are being lured into distractions and caught up in partisan bickering while becoming increasingly disillusioned by congressional partisanship that has no foreseeable horizon. Every six and a half minutes another crisis fed headline booms across talk radio and 24 hour cable news programming enables, aids and abets, Congressional outlaws intent on accomplishing their stated purpose--not to fix things but to keep our president from fixing anything. The fact is that, as the country continues to regress as a democracy, most voters just don’t know which ball to keep their eye on.
Much has been said to criticize the vast right wing of our political system--deservingly so. However, right wing enlightenment, while not likely to occur, isn’t going to restore what is truly wrong with our political system. As a starting point, America needs to go back to their 7th grade civics studies, recall, understand and accept that our system of democracy was designed to limit the power of the president.
The endless criticisms of President Obama, that he is an appeasement-happy crypto-Republican, that he hasn’t tended to jobs quickly enough, that his administration’s healthcare plan is destined for the Supreme Court guillotine, or that the bankers on Wall Street are thriving once again while tens of millions of Americans are being crushed by the overhang of mortgage debt in an economy that predictably continues to fail, are all foreseeable issues of orchestrated design.
How long will it be before we hear that the President has been slow to act to the charge of a justice department investigation of Standard & Poors, who is thought to have purposely overrated toxic mortgage securities in the years before the bust? Surely, the next words we’ll hear from Wall Street drum beaters is that the investigation is a retaliatory decision that flows from the debt ceiling crisis credit downgrade—would the Tea Party mind?
President Obama’s strategic and structural challenges are immense but they are not solely the result of the radical right wing either. With the exception of continuing the Bush tax cuts, the president has needed 60 votes, not the customary 50, to address every major issue including stimulus, extending unemployment benefits and healthcare. Conservative Democrats have made the party’s majority an illusion while enabling insincere disruptive play-to-base regressive obstructionists. The bottom line for America is that the president lacks the power to overcome the congressional challenges set in place by a changed campaign finance election system that rewards obstinate representation and, in effect, has set functional limitations upon our democracy.
As early as 1905, President Theodore Roosevelt asserted the need for campaign finance reform and called for legislation to ban corporate contributions for political purposes. In response, the United States Congress enacted the Tillman Act of 1907, named for its sponsor Senator Benjamin Tillman, which banned corporate contributions.
In 1971, Congress consolidated its earlier reform efforts in the Federal Election Campaign Act of 1971 (FECA, Pub.L. 92-225, 86 Stat. 3, enacted February 7, 1972, 2 U.S.C. § 431 et seq.), instituting more stringent disclosure requirements for federal candidates, political parties and Political Action Committees (PACs).
More recently, in 2002, Congress made major revisions to the FECA in the Bipartisan Campaign Reform Act, more commonly referred to as "McCain-Feingold." However, in 2007 major portions of McCain-Feingold were struck down by the Supreme Court on Constitutional grounds in Wisconsin Right to Life v. Federal Election Commission , and again in 2008 in Davis v. Federal Election Commission .
However, in 2010 the Supreme Court gave new meaning to ATM machine politics by way of their Citizens United v. Federal Election Commission decision which struck down FECA's complete ban on corporate and union independent spending originally passed as part of the Taft-Hartley law in 1947.
Surely we can hope for, demand and attempt, to seek out better politicians and presidents. It’s time for Scotty to beam us all back up to reality. Our focus needs to be on realigning the interests of our elected representatives with that of the voters--not campaign contributors. Corporations don’t vote but their financial influence clearly has a hand around the throat of a functional democracy. We must refocus our priorities and first correct a campaign finance system that fosters an unworkable climate through the absence of transparency, financial accountability and the ATM machine politics that has put our democracy up for sale.
Friday, August 5, 2011
By R.A. Monaco
August 5, 2011
During a recent online discussion following the debt ceiling debates, I commented that our Democratic governance had shown itself ineffective and that further proof of a broken system of governance was not required. I lamented that, there was just no possibility that American democracy could be governed effectively when whichever party threatens the greatest harm to the nation's economy dictates policy and the president surrenders. The interests of policy makers, I suggested, must be re-aligned with interests of the voters of this nation which should not include corporations and multinational companies who are seemingly behind the scenes calling the shots while financing political campaigns.
In a most concise manner my assertions were then put to task, “who’s calling the shots?” I was asked, while presented with a link for OpenSecrets.org (http://www¬.opensecre¬ts.org/org-s/list.php) —which provides a ranked list of 140 Top All-Time Donors featuring a legend giving a dollar amount and partisan breakdown. The primary goal of much of the money that flows through U.S. politics is “Influence”—that’s it, end of story. The Center for Responsive Politics endeavors to hold politicians accountable and the compilation of heavy hitting donors was just the type of information that supported my conclusion—it doesn’t really matter that both sides of the aisle are being financially influenced, now does it?
In the days prior to the congressional vote on the debt ceiling, a Washington Post poll showed a 72% disapproval rating of the proposed debt ceiling bill—yet politicians ignored the voice of the public and partisan agendas continued to forge ahead disregarding a considerable investment of time according to Senator Dick Durbin who contributed to a committee whose work was completely left out of the entire debate and final legislation.
The openness of my online exchange concluded with the other party stating, “I do, however disagree with you on the partisan issue. Democrats and Republican¬s most certainly reflect opposing ideologies.” Our discussion to that point seemed productive, I had learned something and discovered reliable information that supported the essence of my assertions about corrupting influence, but then, he went on to say that, “Too many liberals blame nebulous 'corporate interests' that really control the government.”
As our discussion ended, I was left with the minimizing conclusion that somehow corporate interests were not a factor in the equation of public concerns. My assertions were nonpartisan though it is easy to see why conservatives might be sensitive to my observations at that moment. Minimizing clichés seems to be a real problem in the exchange of ideas and ideology these days. Today, it’s more important to carry the team banner of conclusions when facts and rational support cannot prevail.
On Friday last, Washington Post columnist Charles Krauthammer claimed that it was a “ridiculous ubiquitous cliché” to say that the problem is that Washington was broken and that while the legislative sausage-making was unsightly, the problem was merely the competition between two visions yet undecided. He admits to having, “every sympathy with conservative counterrevolutionaries.” He maintains that the debt ceiling is but the latest focus of this fundamental divide using a variation of the term counterrevolution more than once in his article. So, it may be that there is a revolution. One that argues conclusions, does not reason, and asks, “why any conservative would collaborate with that ploy”—suggesting that the debt ceiling ploy was manufactured by someone other than Republicans.
Never mind the list of erroneous arguments that the debt-ceiling crisis somehow serves our presidents' interests. When Mr. Krauthammer returns to earth, he will find that 82% of the nation did not agree with his completely unplugged rhetoric attacking everything unblessed in a conservative ideology. That the party on the Potomac has ended the festivities that failed to make jobs their priority while moving for deficit reduction on the backs of the sick, poor, elderly and weakest in this country, while the wealthiest people and corporations in this country were asked to contribute nothing.
The president’s job approval rating has remained relatively stable at 48% approving, but it is Republicans and Congress who are going shoulder the blame for the difficulties of a shrinking economy—not the President. That four out of five people in this nation recognize that the debt ceiling debate was more about gaining political advantage than about doing what is best for the country.
The corporate tax holidays and militant anti-union busting is about to come to a screeching halt because 82% of the American workers, while less able to defend their interests in the work-place than at any time since the Depression, are about to end their tea party and pull the plug come November 2012.
As disappointed as the nation is with our policy makers, they should be just as disappointed with a media that has far too often failed to distinguish facts from conclusions while practicing sensationalism and exploitation that seeks personal fame or worse, a kind of perverse joy in unhappiness and public suffering.
Despite his 1987 Pulitzer Prize for Commentary, Fox News commentator Charles Krauthammer’s partisan editorial seems to knowingly depart from reality if not the truth, while subverting a fundamental principle of his profession. Eighty two percent of Americans are not likely to assume that he was just off the mark in his July 29, 2011 Great Divide article, or that it represented his best independent judgment rather than that of his friends at Fox News. So much for fidelity to the public interest and freedom from all obligations, enhancing media profits by going after the most affluent audience is not just an ideological difference, it is just another disappointment.
Monday, August 1, 2011
By R.A. Monaco
August 1, 2011
Today, the real problems for our nation remain unemployment and a lack of aggregate demand. This is precisely the very same problem that presented 77 years ago during the Great Depression. Monetary policy now, as then, have reached its limits and further decline in interest rates realistically won't have much effect in stimulating the economy.
In order to restore our economy we are now left solely with the tool of fiscal policy to design a plan towards economic health and overcome what is surely to follow--increased unemployment and a contracting economy.
The fact is, that the initial stimulus package that was put into place to counter the full shock from the financial crisis, was far too inadequate and our newly elected president, failed to lead, ignoring the designs of his own commission's solutions, hovering outside the fray of debate. In the words of The New Yorker's Ryan Lizza, President Obama has pioneered a new style of statecraft: "Leading from behind."
Both democrats and republicans with the help of their over the top right wing extremists, have done a completely a inadequate job of explaining why a Keynesian solution would not be the best way to attack a Keynesian problem. Realistically, the explanation is that no solution was really being sought and partisan lines were being re-drawn. But, before we assign a grade to the list of failed assignments, some explanation about the principles of designing an effective stimulus program seem in order.
As an offer of authority, Joseph E. Stiglitz, winner of the Nobel Prize in economics points out that there is ample evidence to support that a Keynesian solution to our troubled economy can be found, not only in our own history of having to deal with precisely the same problem during the Great Depression, but most recently in China. In spite of facing significant shocks to its economy, China deployed one of the world's largest stimulus packages which resulted in one of the strongest documented economic recoveries.
Reflecting back to 2008, Americans must be asking themselves whether congress and the president was actually looking for a solution at all or just engaging in brinkmanship. As a practical matter, economic policies take months to be fully effective and money needs to get into the economy quickly. Clearly, George W. Bush's delay was costly, but President Obama could have hit the ground running and expedited implementation of his own plan instead of leaving this up to congressional debate and partisan compromise. That is, if in fact, he was seeking solutions instead of staying out of the fray of political debate to minimize political exposure while seeking to project an image of partisan compromise.
Standard Keynesian analysis seeks to maximize a multiplier that has an exponential return of government investment spending beyond the dollar's increase in national output. If the government spends money on a construction project, then the workers spend their pay to buy things, and others, in turn, spend their money. Every link in the chain boosts national income making the total increase in national income far greater than the initial amount spent by the government.
But not all spending has the same multipliers. Tax cuts for the rich, who save much of what they have, has a very low multiplier, just as does spending on foreign contractors working outside of the United States, Iraq for example, because the consumption takes place outside the country. On the other hand, increasing unemployment benefits has a high multiplier, because those who find themselves suddenly short of cash are going to spend almost every dollar they receive. Long run multipliers are even larger and policy makers needed to find ways to provide effective spending where benefits are realized two or three years from now too.
Stimulus spending to be effective needed to address the nation's long-term problems such as programs for the elderly, decaying infrastructure and global warming. But at the very least, policy makers should not have made them worse.
As a practical matter, it seems beyond reason, if not irresponsible, that for the entire duration of this manufactured debt ceiling crisis, discussions about the country's debt has never been in the context of balance sheet reality. It is a given that stimulus spending will inevitably increase a country's deficit, but a country's debt only measures one side of the balance sheet--hello, there are two!
Assets are equally important--unless you have all the marbles you want or need. If stimulus money is invested in assets that increases the country's long-run productivity, the nation will be in better shape as a result of the stimulus, while short-run output and employment are increased.
Strong leadership would not have permitted such a narrow discussion about the debt ceiling. What should have been carefully explored by policy makers is the balance sheet benefits of good investments that brought higher future output. Good balance sheet investments not only stimulate revenue generation they improve standards of living today and also improve those of the next generation.
The "I've got mine syndrome" of unfairness in tax cuts, first enacted in 2001 and 2003 by the George W. Bush administration is now owned fully by President Obama, given his surrender last December extending all the Bush era tax cuts. He then surrendered in the spring when republicans threatened to shut down the government and again, in a the most spectacular display of cowardice-- to this manufactured right wing extortion over the debt ceiling--shame! The entire situation would have been a no brainer for Bill Clinton who would have usurp authority under the 14th Amendment and put his challengers to task. But such is the difference between leaders and capitulators.
The principles of Keynesian solution should be fair, they should provide for exigencies and target areas of job loss. If job losses are permanent then retraining workers becomes part of a well-designed stimulus.
In the end, the Obama administration's stimulus helped but was far too little and poorly designed. About a third of the stimulus went to tax cuts--far too much. Investment programs could have been more effective, too little went to help those that were falling through the holes in the safety nets and the states when it could be utilized most effectively.
Indeed, slashing spending while the economy is depressed won't help and predictably, history will show that the timing of these policies made things worse. The fact is that spending cuts will do little to reduce future interest costs while making the economy weaker. To add insult to injury the president surrendered to spending cuts and failed to obtain an increase in revenue.
At the end of the day the continuing current of miserable economic news is largely the blame of a political approach that began with the presidency of George W. Bush and unimproved during President Obama's term. It may be that Obama was dealt a difficult hand, but rather than playing the best hand he had he keep drawing from the deck and folding, time and again.
The debt ceiling debacle on multiple levels is nothing short of a catastrophe. At this point, it is no surprise to working people they're not the fundamental focus of the Obama administration. He has become the black mascot of Wall Street oligarchs and even with all his charismatic statesmanship he reflects yet another failed presidency when there is nobody up to the task waiting to step in.
There's just no possibility that American democracy can govern effectively when whichever party threatens the greatest harm to the nation's economy dictates policy and the president surrenders. The interests of policy makers must be aligned with interest of the voters of this nation--that does not include corporations and multinational companies who are calling the shots while financing political campaigns. Until then, we have no reason to expect anything but more of the same.