Category: Economy

O, The Boner, & FDR

TehBoner2 againPlan B Boner has a sad

The only thing preventing President Obama from once again becoming a pariah among progressives is the Teabagger python that squeezes the GOP harder every time it even contemplates the word “compromise.”

In the latest round of budget negotiations, Obama has broken his campaign promises to:

1. Exempt the first $250k of everyone’s income a slight rise in taxes, back tothe rates that prevailed during the go-go years of the Clinton Administration. Instead, he raised the threshold to $400k, reducing government revenues by $300 billion in the process.

2. Hold discretionary budget cuts to $1 trillion. Instead, he added another $300 billion in order to pay for the loss of revenues above.

3. Keep Social Security off the table. Agreeing to cut cost of living increases by adopting a “chained CPI” accounting formula. As Jane Hamsher at The Lake explains, no one should be surprised by Obama’s willingness to “adjust” SS benefits, despite what he said during the campaign, given his track record on the subject.

Add to that the additional $1.5 trillions of cuts Obama agreed to in 2011, and Obama has offered to cut the budget a whopping $2.8 trillion. You’d think that the Rethugs would have jumped at the chance to reduce the size of government by the largest amount in history. Then again, they and their billionaire sponsors are far more interested in individual tax cuts than reducing the debt, as the last 20 years of Republican administrations have proven beyond a shadow of a doubt.

Which brings us to the latest riot in the asylum known as the House of Representatives. Unable to muster any support whatsoever for Obama’s latest capitulation negotiation, Speaker of the House John Boehner instead hatched his own plan he named “Plan B.” (Plan Boner? Plan Bourbon? Plan Bust?) The Boner Plan did finally accept an increase in income taxes, but only on the uber rich, i.e. the top .2%. Blowing past the 250k and 450k thresholds, he raised it to $1 million, starving the government of revenues even more, without even mentioning off-setting budget cuts, let alone specifying which ones. [Edit/Update: ThinkProgress has a side by side comparison here.]

Boehner was under no illusion that it would ever pass the Senate, let alone survive a veto by the president. Thus it was a strictly political maneuver, probably meant to signal that he could deliver his caucus despite the caterwauling from his wingnut right. He went before the cameras, speaking confidently that he had enough votes for passage. He could thus leave town for the holidays, the ball in the president’s court.

Unfortunately for The Orange Man, he can’t count, can’t count on his own party to back his play. (Why he thought the no-tax-at-any-cost-crowd would all fall on their swords in a futile gesture is beyond me.) At the last minute, he pulled the bill from the floor, admitting that he didn’t have the votes. Hand that man an exploding ceegar…

How Washington has become so utterly paralyzed is detailed by Robert Ornstein (American Enterprise Institute) and Thomas Mann (Brookings Institute) in their book “It’s Even Worse Than It Looks: How the American Constitutional System Collided With the New Politics of Extremism.”  They continue their analysis in a recent WAPO op-ed “Let’s just say it: The Republicans are the problem“:

We have been studying Washington politics and Congress for more than 40 years, and never have we seen them this dysfunctional. In our past writings, we have criticized both parties when we believed it was warranted. Today, however, we have no choice but to acknowledge that the core of the problem lies with the Republican Party.

The GOP has become an insurgent outlier in American politics. It is ideologically extreme; scornful of compromise; unmoved by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition.
When one party moves this far from the mainstream, it makes it nearly impossible for the political system to deal constructively with the country’s challenges.

Something that’s been obvious to progressives for decades seems to be finally seeping into the sclerotic brains of The Beltway Village People. Here’s what Ornstein and Mann say about the enabling contributions of The Fourth Estate, who have fully internalized the fallacy of false equivalency:

“Both sides do it” or “There is plenty of blame to go around” are the traditional refuges for an American news media intent on proving its lack of bias, while political scientists prefer generality and neutrality when discussing partisan polarization. Many self-styled bipartisan groups, in their search for common ground, propose solutions that move both sides to the center, a strategy that is simply untenable when one side is so far out of reach.

Conservative ideology itself plays a substantial role in the dysfunctionality that has turned the US government into a chaotic three ring circus that has the rest of the civilized world shaking their heads in disbelief:MORE. . .“O, The Boner, & FDR”

FAILURE “R” US

The Republican party, some with paper bags over their heads in silent protest, seemed genuinely unaware that the banner they placed behind themselves was a scathing indictment of their failure to face the reality.

The Austerity Bomb

Citizens of Milan react to austerity measures enforced by the EU and IMF 

In his NY Times blog Wednesday, Paul Krugman suggests replacing the misleading moniker “fiscal cliff” used to describe the US government’s fiscal situation, with the more accurate term “austerity bomb”:

Brian Beutler of Talking Points Memo seems to have been the first to use the phrase “austerity bomb” for what’s scheduled to happen at the end of the year. It’s a much better term than “fiscal cliff”. The cliff stuff makes people imagine that it’s a problem of excessive deficits when it’s actually about the risk that the deficit will be too small; also and relatedly, the fiscal cliff stuff enables a bait and switch in which people say “so, this means that we need to enact Bowles-Simpson and raise the retirement age!” which have nothing at all to do with it.

And it can’t be emphasized enough that everyone who shrieks about the dangers of the austerity bomb is in effect acknowledging that the Keynesians were right all along, that slashing spending and raising taxes on ordinary workers is destructive in a depressed economy, and that we should actually be doing the opposite.

Meanwhile, in Europe, which has had much more austerity in aggregate than we have, grim new industrial production numbers and a worsening unemployment crisis…

About Europe. Z Communications provides a roundup of this week’s mass protests:

Europe’s Mediterranean rim trembled on Wednesday as violent clashes broke out following the largest coordinated multinational strike in Europe ever. In the hope to stave off decades of austerity, precarity and unemployment, European labor unions united for the first time since the start of the European debt crisis to organize strikes and protests in a total of 23 EU member states, with millions of workers walking off their jobs and marching on parliament buildings across the continent. Bloody street battles ensued across Spain, Portugal and Italy.

In Italy, over 300,000 protested in over 100 cities as workers observed a 4-hour stoppage in solidarity with Greek, Spanish and Portuguese workers. In Milan and Rome, scenes of street “guerriglia” were witnessed as thousands of students clashed with riot police, bringing traffic to a standstill and leading to dozens of injuries. In Sardinia, industry minister Corrado Passera and Fabrizio Barca, minister of territorial cohesion, had to be evacuated by helicopter after angry protesters besieged a meeting and started burning cars all around them.

In Naples and Brescia, thousands of students occupied railway tracks; in Genoa, the entrance to the ferry port was blocked; in Florence, Venice, Trieste and Palermo, banks were smeared with eggs and banners unfurled from monuments; in Padua clashes broke out between students and police; in Bologna 10.000 students took to the streets and attempted to march straight through a line of riot police; and in Pisa protesters occupied the leaning tower, unfurling a banner that read “Rise Up! We are not paying for your Euro crisis!”

Deficit hawks in the US, including the Bowles-Simpson Catfood Commission and former investment bank manager Pete Peterson‘s Peter G. Peterson Foundation (Peterson’s personal worth is estimated at $3 billion), will be in for a rude awakening if they succeed in enforcing an austerity regime on US citizens (who, unlike their European counterparts,  are armed to the teeth and remember  Network‘s Howard Beale.) Besides being unnecessarily cruel in its effects on the poor and middle class, it also make zero economic sense in the short and medium run, as Krugman never tires of explaining. Something to keep in mind every time your hear self-dealing fiscal scolds piss and moan about the debt that they created but want others to pay for.

Z Com concludes:

And so Southern Europe continues to tremble on its very foundations. As smoke rises from the streets of Madrid, Lisbon, Rome and Athens, one thing is becoming ever more clear: the question is no longer if but when the social explosion will hit. The outrage is building up, and with unemployment rising, austerity deepening, and a generation of Europeans increasingly disillusioned by state intransigence and outraged by police violence, such an outburst of popular rebellion seems ever more inevitable. All it will take is a spark.

Coming to a continent near you.

Mitt Romney’s Fevered Dreams: #3

A Romney Adviser Flippantly Characterized Romney As “Shell Shocked” After His Historic Loss

Risky Business Part II: China Edition

Presidential wanna-be Willard Romney was honored by the Chinese Government recently with the issue of the 00 Yuan; yup, not worth the paper it’s printed on.

Picking up from where we left off yesterday…

Frankly, Mitt, I would have thought you would have labeled China the bigger geopolitical foe than Russia, since you have promised that on Day One of your administration you would designate it “a currency manipulator.”  That, of course, would be the first step to an all out trade war, and all the financial chaos that implies.

But that’s probably just tough pander talk to impress your wingnut base, since you have reportedly invested $23 million of your own money in a Chinese sweat shop, Global-Tech in Dongguan, China. Here’s how you gushingly described the factory to your presidential campaign donors in the infamous Boca Raton 47% video:

“And they work in these huge factories; they made various uh, small appliances. And uh, as we were walking through this facility, seeing them work, the number of hours they worked per day, the pittance they earned, living in dormitories with uh, with little bathrooms maybe 10, 10 room, rooms. And the rooms they have 12 girls per room. Three bunk beds on top of each other…And around this factory was a fence, a huge fence with barbed wire and guard towers. And, and we said gosh! I can’t believe that you, you know, keep these girls in! They said, no, no, no. This is to keep other people from coming in Because people want so badly to come work in this factory that we have to keep them out.”

In a report titled: Global-Tech – Betting Against American Workers, compiled by the   Institute for Global Labour and Human Rights, its author asks the obvious question:

“Does Mr. Romney seriously believe that young men and women in China are racing to climb over fortress-like walls topped with barbed wire, just to get a poorly paid job at Global-Tech? Or is it possible that the barbed wire and armed guards are meant to lock the Chinese workers in and strip them of their legal rights?”

The United Steel Workers web site provides further details:

[The author] Kernaghan provides in the report, photos of the workers and documentation with pay stubs and journals by workers in a chapter titled, ‘Misery Updated,’ that makes clear in 2012 illegal sweatshop conditions persist at Global-Tech in China.

He publishes photos by workers of primitive and filthy dorms with squat toilets. Other photos show a workplace cafeteria, where he describes barely edible and frequently rotten food. “Global-Tech workers are easily hired, but then they are trapped and cheated of their wages if they try to leave, as well as being cheated of healthcare and other benefits.”

“Sadly, in 2012, Global-Tech remains a brutal sweatshop, where workers are paid starvation wages of $1.00 an hour and have no rights. Today at Global-Tech, every single labor law in China is violated: primitive, filthy dorm conditions are the norm; routine 15-16-hour shifts prevail, along with grueling 105-to-112 hour, seven-day work weeks.”

Kernaghan wrote that 800 high school student interns – many exhausted children just 16-years-old, are forced to work the grueling 15-16-hour shifts with no overtime pay at Global-Tech. “As of 2012, U.S. wages for the manufacturing of electrical equipment and appliances are $17.93 an hour, while wages at Global-Tech for similar work are just $1.00 an hour, or just six percent of U.S. wages.

The article concludes with a question directly pertaining to the 2012 election:

“In the context of Mr. Romney’s present ‘get tough on China’ stance, it would be critical for Mr. Romney to clarify exactly what he and Bain Capital did at the Global-Tech factory in Dongguan, China to push back against the evident abuses in the factory and to assure respect for human, women’s and workers’ rights.“

And that’s just one example of many of your China ties. According to your 2010 and 2011 tax returns, you have personal investments in at least 10 Chinese companies, one of which is Li & Fung Limited:

…a supply chain management company that oversees the transfer of Chinese-manufactured goods to giant American retailers like Target and Walmart — precisely the types of products that many argue have cost American jobs at home as they’ve been outsourced to cheaper labor markets.

Then there was your role in leveraging US taxpayer bailout money to move a critical auto parts supplier, Delphi, lock, stock, and barrel to China.

Presently, Bain is moving 170 jobs from Illinois based Sensata Technologies that pay $18 per hr to China where they pay a buck, despite Sensata turning a healthy third-quarter profit of $41.5 million.  Just not enough money for ya’all, eh?

You’ve made a quarter billion dollars leveraging other people’s money buying companies from which you extract every possible dollar, whatever the consequences to its employees, the communities in which they live, and even the US taxpayers who, among other things, have picked up the tab for your plundering of employee pension funds. All with minimal risk to you and your investors.

Yeah, you are a master at playing the financial risk game, Willard, outsourcing it to whomever and wherever you can. I didn’t think it was possible, but you have exceeded all my expectations as to your personal and political dickishness. I wouldn’t be surprised that once you succeed in outsourcing all possible jobs to China; that once we reach relative wage parity with the Chinese, you’ll have little problem importing their feudal like working conditions into the U.S.

Thereupon, we will have realized our collective race to the bottom. “And the world was made flat” as your compatriot Tom Friedman would have it. To which I must humbly offer you and your ilk my extended middle finger.

Magical Rethug Thinking

The zombie eyed granny starver demonstrates his compassionate conservatism

Having done my share of restaurant dish washing as a teenager living on Maui in the early Seventies, I found myself laughing out loud at this clip of Ayn Rand acolyte Paul Ryan scouring pots and pans that had already been cleaned. (Notice how deftly Ryan, who Charlie Pierce calls “the zombie eyed granny starver”, prevents the camera from seeing the inside of the pans.) The venue for this overly staged PR puff piece was a volunteer soup kitchen, which just might go out of business should Ryan and Mitt Romney win the election.

As shown by a recent analysis of the Joint Committee on Taxation, a bi-partisan Congressional committee equally divided between Democrats and Republicans, the proposed Ryan-Romney tax plan is mathematically impossible to achieve.  The central feature of that plan is an across the board 20% tax cut (which overwhelmingly favors Romney and his fellow uber rich). In order to pay for it, even if the vast majority of the largest tax loopholes and deductions are eliminated, including charitable contributions that makes soup kitchens and other vital community services possible, the revenue raised by eliminating the write-offs  would  total something like 4%.

 Making up the deficit between 4% and 20% is pure faith based, trickle down, voodoo economics, predicated on all kinds of assumptions about “broadening the tax base.”  Which is precisely why the Romney-Ryan campaign refuses to provide specifics of their secret plan to balance the budget. (Shades of Nixon’s campaign promise of a secret plan to end the Vietnam war, which only worsened when he expanded the conflict into Laos and Cambodia.).
Promising to balance the budge by starving the government of desperately needed revenues, while simultaneously increasing the budget of the military industrial complex, is an exercise in magical thinking. Maybe Mitten’s magic underwear has shrunk to the point where it’s cutting off the blood to his brain.