Published: Tuesday 15 January 2013
In a pinch, the Treasury could issue IOUs to the nation’s creditors — guarantees they’ll be paid eventually. But there’s no indication that’s Obama’s game plan, either.

 

A week before his inaugural, President Obama says he won’t negotiate with Republicans over raising the debt limit. 

At an unexpected news conference on Monday he said he won’t trade cuts in government spending in exchange for raising the borrowing limit. 

“If the goal is to make sure that we are being responsible about our debt and our deficit - if that’s the conversation we’re having, I’m happy to have that conversation,” Obama said. “What I will not do is to have that negotiation with a gun at the head of the American people.”

Well and good. But what, exactly, is the President’s strategy when the debt ceiling has to be raised, if the GOP hasn’t relented?

READ FULL POST 7 COMMENTS

Published: Sunday 23 December 2012
Every year about now I watch “It’s a Wonderful Life” again to remind myself what Frank Capra understood about America — its essential decency and common sense.

It’s easy to feel discouraged about the bullying by right-wing Republicans and their patrons over everything from gun control to taxes and social safety nets to trade unions and jobs.

Every year about now I watch “It’s a Wonderful Life” again to remind myself what Frank Capra understood about America — its essential decency and common sense.

In many ways the nation is better than it was in 1946 when the movie first appeared. Women have gained economic power and reproductive rights; we enacted Civil Rights and Voting Rights and, through Medicare and Medicaid, dramatically reduced poverty among the elderly; we began to tackle environmental devastation; we stopped treating gays as criminals and have even started to recognize equal marriage rights. We elected and then re-elected the first black president of the United States. We have enacted the bare beginnings of universal healthcare.

But we are still in danger of the “Pottersville” Capra saw as the consequence of what happens when Americans fail to join together and forget the meaning of the public good.

If Lionel Barrymore’s “Mr. Potter” were alive today he’d call himself a “job creator” and condemn George Bailey as a socialist. He’d be financing a fleet of lobbyists to get lower taxes on multi-millionaires like himself, overturn environmental laws, trample on workers’ rights, and shred social safety nets. He’d fight any form of gun control. He’d want the citizens of Pottersville to be economically insecure – living paycheck to paycheck and worried about losing their jobs – so they’d be dependent on his good graces.

The Mr. Potters are still alive and well in America, threatening our democracy with their money and our common morality with their greed.

Call me naive or sentimental but I still believe the George Baileys will continue to win this contest. They ...

Published: Sunday 16 December 2012
So two cheers for Ben Bernanke and the Fed. They’re doing what they can.

For the first time, the Federal Reserve has explicitly linked interest rates to unemployment.

Rates will remain near zero “at least as long” as unemployment remains above 6.5 percent and if inflation is projected to be no more than 2.5 percent, said the Federal Open Market Committee in a statement Wednesday.

Put to one side the question now obsessing stock and bond traders — whether the new standard means higher interest rates will kick in sooner than the middle of 2015, which had been the Fed’s previous position.

By linking interest rates directly to the rate of unemployment, Bernanke is explicitly acknowledging that the Federal Reserve Board has two mandates — not just price but also employment. “The conditions now prevailing in the job market represent an enormous waste of human and economic potential,” said Fed Chairman Ben S. Bernanke.

These are refreshing words at a time ...

Published: Tuesday 11 December 2012
As Washington fiddles over the fiscal cliff, a larger battle over inequality is being waged all over America.

 

Washington has a way of focusing the nation’s attention on tactical games over partisan maneuvers that are symptoms of a few really big problems. But we almost never get to debate or even discuss the big problems because the tactical games overwhelm everything else.

The debate over the fiscal cliff, for example, is really about tactical maneuvers preceding a negotiation about how best to reduce the federal budget deficit. This, in turn, is a fragment of a bigger debate over whether we should be embracing austerity economics and reducing the budget deficit in the next few years or, alternatively, using public spending and investing to grow the economy and increase the number of jobs.

Even this larger debate is just one part of what should be the central debate of our time — why median wages continue to drop and poverty to increase at the same time income and wealth are becoming ever more concentrated at the top, and what should be done to counter the trend.

With a shrinking share of total income and wealth, the middle class and poor simply don’t have the purchasing power to get the economy back on solid footing. (The wealthy don’t spend enough of their income or assets to make up for this shortfall, and they invest their savings wherever around the world they can get the highest return).

As a result, consumer spending — fully 70 percent of economic activity — isn’t up to the task of keeping the economy going. This puts greater pressure on government to be purchaser of last resort.

The dilemma isn’t just economic. It’s also political. As money concentrates at the top, so does power. That concentrated power generates even more entrenched wealth at the top, and less for the middle class and the poor.

A case in point is what’s now happening in Michigan. In the state where the American labor movement was born – and where, because of labor unions, the ...

Published: Thursday 6 December 2012
Yes, America does face a cliff — not a fiscal cliff but a set of precipices we’ll tumble over because the GOP’s obsession over government’s size and spending has obscured them.

 

The “fiscal cliff” is a a metaphor for a government that no longer responds to the biggest challenges we face because it’s paralyzed by intransigent Republicans, obsessed by the federal budget deficit, and overwhelmed by big money from corporations, Wall Street, and billionaires.

If we had a functional government America would address three “cliffs” posing far larger dangers to us than the fiscal one:

The child poverty cliff.

Between 2007 and 2011, the percentage of American school-age children living in poor households grew from 17 to 21%. Last year, according to the Agriculture Department, nearly 1 in 4 young children lived in a family that had difficulty affording sufficient food at some point in the year.

Yet federal programs to help children and lower-income families – food stamps, aid for poor school districts, Pell grants, child health care, child nutrition, pre- and post-natal care, and Medicaid – are being targeted by the Republican right. Over 60 percent of the cuts in the GOP’s most recent budget came out of these programs.

Even if these programs are preserved, they don’t go nearly far enough. But the Obama Administration doesn’t talk about reducing poverty in America. It talks only about preserving the middle class.

Yet unless we focus on better schools, better health, and improved conditions for these poor kids and their families, in a few years America will have a significant population of under-educated and desperate adults.

The baby-boomer healthcare cliff.

Healthcare costs are already 18% of GDP. Between now and 2030, when 76 million boomers join the ranks of the elderly,those costs will soar. This is the principal reason why the ...

Published: Tuesday 4 December 2012
Democrats, here are eight principles to guide you in the coming showdown over the fiscal cliff:

 

Democrats, here are eight principles to guide you in the coming showdown over the fiscal cliff:

ONE: HOLD YOUR GROUND. The wealthy have to pay their fair share of taxes. That’s what the election was all about, and we won. It’s only fair they pay more. They’re taking home record share of national income and wealth, and have lowest effective tax rate in living memory.

TWO: NO DEAL IS BETTER THAN A BAD DEAL. You’re in a strong bargaining position. If you do nothing, the Bush tax cuts automatically expire in January, and we go back to rates during Clinton administration. Which isn’t such a bad thing. As I recall we had a pretty good economy during the Clinton years.

THREE: MAKE REPUBLICANS VOTE ON EXTENDING THE TAX CUTS JUST FOR THE MIDDLE CLASS. After all the Bush tax cuts expire, have Republicans vote on an extending the Bush tax cut just for the middle-class. If they refuse and try to hold those tax cuts hostage to tax cuts for the wealthy, it will show whose side they’re on. They’ll pay the price in 2014.

FOUR: DEMAND HIGHER TAX RATES ON WEALTHY, NOT JUST LIMITS ON DEDUCTIONS. Don’t fall for Republican offers to limit some tax deductions on the wealthy. Demand we go back to higher tax rates on the wealthy and eliminate their unfair tax loopholes, so they truly start paying their fair share.

FIVE: DON’T CUT SAFETY NETS. Don’t sacrifice Medicare or Social Security, or programs for the poor. Americans depend on these safety nets and can’t afford any benefit cuts.

SIX: DON’T CUT INVESTMENTS IN OUR FUTURE PRODUCTIVITY. Education, basic R&D, and infrastructure aren’t spending; they’re investments in our future prosperity. If the return on these investments is greater than the cost, they ought to be made, ...

Published: Thursday 29 November 2012
Earlier this week the Council of Economic Advisers published a report detailing the awful consequences of going over the so-called “fiscal cliff.”

What’s the best way to pressure Republicans into agreeing to extend the Bush tax cuts for the middle class while ending them for the wealthy?

The President evidently believes it’s to scare average Americans about how much additional taxes they’ll pay if the Bush tax cuts expire on schedule at the end of the year. He plans to barnstorm around the country, sounding the alarm.

The White House has even set up a new Twitter hashtag: “My2K,” referring to the extra $2,200 in taxes the average family will pay if all the Bush cuts expire. Earlier this week the Council of Economic Advisers published a report detailing the awful consequences of going over the so-called “fiscal cliff.”

But isn’t this fear-mongering likely to buttress Republican arguments that the Bush tax cuts should be extended for everyone — including the rich? Republicans will say (as they have a thousand times before) that the rich are the “job creators,” so we should tackle the budget deficit by cutting spending rather than raising anyone’s taxes. 

Obama’s only real bargaining leverage comes from the fact that when the Bush tax cuts expire at the end of December, America’s wealthiest will take the biggest hit. The highest marginal income tax rate will rise from 35 to 39.6 percent (for joint filers), and the capital gains rate from 15 to 20 percent.

This will happen automatically if nothing is done between now and then to change course. It’s the default if Republicans won’t agree to anything else. It’s Obama’s trump card.

So rather than stoking middle-class fears about the cliff, the White House ought to be doing the opposite – reassuring most Americans they can survive the fall. To utilize his trump card effectively, Obama needs to convince Republicans that the middle class is willing to jump.

And the middle class can jump ...

Published: Thursday 22 November 2012
Most new jobs in America are in personal services like retail, with low pay and bad hours.

 

A half century ago America’s largest private-sector employer was General Motors, whose full-time workers earned an average hourly wage of around $50, in today’s dollars, including health and pension benefits. 

Today, America’s largest employer is Walmart, whose average employee earns $8.81 an hour. A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits. 

There are many reasons for the difference – including globalization and technological changes that have shrunk employment in American manufacturing while enlarging it in sectors involving personal services, such as retail. 

But one reason, closely related to this seismic shift, is the decline of labor unions in the United States. In the 1950s, over a third of private-sector workers belonged to a union. Today fewer than 7 percent do. As a result, the typical American worker no longer has the bargaining clout to get a ...

Published: Thursday 15 November 2012
Capital gains should be taxed the same as ordinary income.

 

The President says he wants $1.6 trillion in tax hikes. Republicans say they won’t raise tax rates but might be willing to close some loopholes and limit some deductions and tax credits. Is compromise in the air?

Not a chance. True enough, such “base broadening,” as Republicans like to call it, could conceivably generate $1.6 trillion in additional tax revenues over the next decade.

But, wait. Didn’t the President just win a second term? The major issue decided in last week’s election was that the rich should pay more. So, presumably, that $1.6 trillion should come out of the pockets of the wealthiest Americans.

“Broadening the base” has nothing whatever to do with the rich paying more. That’s because a lot of tax credits and deductions help the middle class and the poor.

If we end the Earned Income Tax Credit, for example, some of the poorest Americans will end up sacrificing. That tab was $63 billion last year.

Or if the “loophole” is tax-free employee health care, or the home mortgage tax deduction, or tax-deferred 401K accounts, most of the added tax revenues will come out of the pockets of the middle class.

So when Republicans talk about “broadening the base,” watch your wallets. Now that the President has set his goal on $1.6 trillion in additional taxes, the question is whether the rich are going to cough up $1.6 trillion more.

There’s no way that $1.6 trillion can come out of the pockets of the wealthy merely by capping the deductions the wealthy take advantage of.

If Republicans won’t budge on raising tax rates but insist on broadening the base, Democrats should take aim at the biggest tax loophole of all for America’s wealthy: the preference for capital gains.

Capital gains are now taxed at only 15 percent (the major reason Mitt Romney pays a rate of under 14 percent on over $20 million of ...

Published: Tuesday 13 November 2012
First, raise taxes on the rich – and by more than the highest marginal rate under Bill Clinton or even a 30 percent (so-called Buffett Rule) minimum rate on millionaires.

 

I hope the President starts negotiations over a “grand bargain” for deficit reduction by aiming high. After all, he won the election. And if the past four years has proven anything it’s that the White House should not begin with a compromise.

Assuming the goal is $4 trillion of deficit reduction over the next decade (that’s the consensus of the Simpson-Bowles commission, the Congressional Budget Office, and most independent analysts), here’s what the President should propose:

First, raise taxes on the rich – and by more than the highest marginal rate under Bill Clinton or even a 30 percent (so-called Buffett Rule) minimum rate on millionaires. Remember: America’s top earners are now wealthier than they’ve ever been, and they’re taking home a larger share of total income and wealth than top earners have received in over 80 years.

Why not go back sixty years when Americans earning over $1 million in today’s dollars paid 55.2 percent of it in income taxes, after taking all deductions and credits? If they were taxed at that rate now, they’d pay at least $80 billion more annually — which would reduce the budget deficit by about $1 trillion over the next decade. That’s a quarter of the $4 trillion in deficit reduction right there.

A 2% surtax on the wealth of the richest one-half of 1 percent would bring in another $750 billion over the decade. A one-half of 1 percent tax on financial transactions would bring in an additional $250 billion.

Add this up and we get $2 trillion over ten years — half of the deficit-reduction goal.

Raise the capital gains rate to match the rate on ordinary income and cap the mortgage interest deduction at $12,000 a year, and that’s another $1 trillion over ten years. So now we’re up to $3 trillion in additional revenue.

Eliminate special tax preferences for oil and gas, price supports for ...

Published: Thursday 8 November 2012
“The way to ensure continued growth is to continue the President’s payroll tax cut and extend the Bush tax cuts for income under $250,000, and continue government spending.”

When the applause among Democrats and recriminations among Republicans begin to quiet down — probably within the next few days — the President will have to make some big decisions. The biggest is on the economy.

His victory and the pending “fiscal cliff” give him an opportunity to recast the economic debate. Our central challenge, he should say, is not to reduce the budget deficit. It’s to create more good jobs, grow the economy, and widen the circle of prosperity.

The deficit is a problem only in proportion to the overall size of the economy. If the economy grows faster than its current 2 percent annualized rate, the deficit shrinks in proportion. Tax receipts grow, and the deficit becomes more manageable.

But if economic growth slows – as it will, if taxes are raised on the middle class and if government spending is reduced when unemployment is still high – the deficit becomes larger in proportion. That’s the austerity trap Europe finds itself in. We don’t want to go there.

This is why January’s so-called “fiscal cliff” — $600 billion in automatic spending cuts and tax increases – is so dangerous. It’s too much deficit reduction, too soon. Tax increases on the middle class would reduce their spending just when the economy needs that spending in order to keep growing, and cuts in government’s own spending would make the problem worse.

If we go over the fiscal cliff, we’re in another recession. Don’t just take my word for it. That’s also the view of the Congressional Budget Office and most private economic forecasters.

The way to ensure continued growth is to continue the President’s payroll tax cut and extend the Bush tax cuts for income under $250,000, and continue government spending.

The way to increase growth is to permanently exempt the first $20,000 of income from the payroll ...

Published: Tuesday 6 November 2012
The challenge – not only for our president and representatives in Washington but for all of us – is to rediscover the public good.

The vitriol is worse is worse than I ever recall. Worse than the Palin-induced smarmy 2008. Worse than the swift-boat lies of 2004. Worse, even, than the anything-goes craziness of 2000 and its ensuing bitterness. 

It’s almost a civil war. I know families in which close relative are no longer speaking. A dating service says Democrats won’t even consider going out with Republicans, and vice-versa. My email and twitter feeds contain messages from strangers I wouldn’t share with my granddaughter. 

What’s going on? Yes, we’re divided over issues like the size of government and whether women should have control over their bodies. But these aren’t exactly new debates. We’ve been disagreeing over the size and role of government since Thomas Jefferson squared off with Alexander Hamilton, and over abortion rights since before Roe v. Wade, almost forty years ago. 

And we’ve had bigger disagreements in the past – over the Vietnam War, ...

Published: Tuesday 30 October 2012
It would be insane to compound the damage by raising taxes on the middle class and not on the rich.

 

As we go into the final days of a dismal presidential campaign where too many issues have been fudged or eluded — and the media only want to talk about is who’s up and who’s down — the biggest issue on which the candidates have given us the clearest choice is whether the rich should pay more in taxes. 

President Obama says emphatically yes. He proposes ending the Bush tax cut for people earning more than $250,000 a year, and requiring those with high incomes to pay in taxes at least 30 percent of any income over $1 million (the so-called “Buffett Rule”).

Mitt Romney says emphatically no. He proposes cutting tax rates by 20 percent, which would reduce taxes on the rich far more than anyone else. He also wants to extend the Bush tax cut for the wealthy, and reduce or eliminate taxes on dividends and capital gains. 

Romney says he’ll close loopholes and eliminate deductions used by the rich so that their ...

Published: Thursday 18 October 2012
“The debate left me relieved — the President’s performance will almost certainly stop Romney’s momentum, and may turn the tide — but also left me perplexed.”

 

He’s back. 

Tonight our president was articulate and forceful — in sharp contrast to his performance in the first presidential debate. He stated his beliefs. He defended his record. He told America where he wanted to take the nation in his second term. 

And he explained where Romney wanted to take us. 

For example: “Romney says he’s got a five-point plan. Governor Romney doesn’t have a five-point plan; he has a one-point plan. And that plan is to make sure that folks at the top play by a different set of rules. That’s been his philosophy in the private sector; that’s been his philosophy as governor; that’s been his philosophy as a presidential candidate. You can make a lot of money and pay lower tax rates than somebody who makes a lot less. You can ship jobs overseas and get tax breaks for it. You can invest in a company, bankrupt it, lay off the workers, strip away their pensions, and you ...

Published: Thursday 11 October 2012
“The fundamental question is whether we’re still all in it together – whether as American citizens we continue to have obligations to one another to assure equal opportunity and help for those who need it – or we’re on our own, without a common bond or a common good.”

TO: VPOTUS

FROM: Robert Reich

RE: Debate

Beware: Paul Ryan will appear affable. He’s less polished and aggressive than Romney, even soft-spoken. And he acts as if he’s saying reasonable things.

But under the surface he’s a rightwing zealot. And nothing he says or believes is reasonable – neither logical nor reflecting the values of the great majority of Americans.

Your job is to smoke Ryan out, exposing his fanaticism. The best way to do this is to force him to take responsibility for the regressive budget he created as chairman of the House Budget Committee.

Ryan won’t be able to pull a Romney — pretending he’s a moderate — because the Ryan budget is out there, with specific numbers.

It’s an astounding document that Romney fully supports. And it fills in the details Romney has left out of his proposals. Mitt Romney is a robot who will say and do whatever he’s programmed to do. Ryan is the robot’s brain. The robot has no heart. It’s your job to enable America to see this.

I suggest you hold up a copy of the Ryan budget in front of the cameras. You might even read selected passages.

Emphasize these points: Ryan’s budget turns Medicare into vouchers. It includes the same $716 billion of savings Romney last week accused the President of cutting out of Medicare – but instead of getting it from providers he gets it from the elderly.

It turns Medicaid over to cash-starved states, with even less federal contribution. This will hurt the poor as well as middle-class elderly in nursing homes.

Over 60 percent of its savings come out of programs for lower-income Americans – like Pell grants and food stamps.

Yet it gives huge tax cuts to the top 1 percent – some $4.7 trillion over the next decade. (This is the same top 1 percent, you might add, who have reaped 93 percent of the gains from the recovery, ...

Published: Thursday 4 October 2012
The question now is whether Team Obama understands that our President must be more aggressive and commanding in the next two debates — and be unafraid to respectfully pin Romney to the floor.

 

In Wednesday night’s debate, Romney won on style while Obama won on substance. Romney sounded as if he had conviction, which means he’s either convinced himself that the lies he tells are true or he’s a fabulous actor.

But what struck me most was how much Obama allowed Romney to get away with: Five times Romney accused Obama of raiding Medicare of $716 billion, which is a complete fabrication. Obama never mentioned the regressiveness of Romney’s budget plan — awarding the rich and hurting the middle class and the poor. He never mentioned Bain Capital, or Romney’s 47 percent talk, or Romney’s “carried-interest” tax loophole. Obama allowed Romney to talk about replacing Dodd-Frank and the Affordable Care Act without demanding that Romney be specific about what he’d replace and why. And so on.

I’ve been worried about Obama’s poor debate performance for some time now. He was terrible in the 2008 primary debates, for example. Expectations are always high — he’s known as an eloquent orator. But when he has to think on his feet and punch back, he’s not nearly as confident or assured as he is when he is giving a speech or explaining a large problem and its solution. He is an educator, not a pugilist, and this puts him at a disadvantage in any debate.

Romney stayed on script. If you look at a transcript of his remarks you’ll see that he repeated the same lines almost word for word in different contexts. He has memorized a bunch of lines, and practiced delivering them. The overall effect is to make him seem assured and even passionate about his position. He said over and over that he cares about jobs, about small businesses, and ordinary Americans. But his policies and his record at Bain tell a very different story.

The question now is whether Team Obama understands that our President must be more aggressive and commanding in the next two ...

Published: Tuesday 25 September 2012
Romney’s failing isn’t that he’s a bad candidate. To the contrary, he’s giving this GOP exactly what it wants in a candidate.

I’ve spent the past few days debating right-wingers — among them, Grover Norquist and Ann Coulter. This isn’t my idea of fun. I do it because apparently many Americans find these people persuasive, and it seems important to try to show why they’re profoundly wrong. 

There are two major theories about why Romney is dropping in the polls. One is Romney is a lousy candidate, unable to connect with people or make his case.

The second is that Americans are finally beginning to see how radical the GOP has become, and are repudiating it. 



Many Republicans — including some of the right-wingers I’ve been debating — hold to the first view, for obvious reasons. If Romney fails to make a comeback this week, I expect even more complaints from this crowd about Romney’s personal failings, as well as the inadequacies of his campaign staff. 

But the second explanation strikes me as more compelling. The Republican primaries, and then the Republican convention, have shown America a party far removed from the “compassionate conservatism” the GOP tried to sell in 2000. Instead, we have a party that’s been taken over by Tea Partiers, nativists, social Darwinists, homophobes, right-wing evangelicals, and a few rich people whose only interest is to become even wealthier. 

These regressives were there in 2000, to be sure. They lurked in the GOP in the 1990s, when Newt Gingrich took over the House. They were there in the 1980s, too, although Ronald Reagan’s sunny disposition gave them cover. In truth, they’ve been part of the GOP for more than half a century — but never before have they held so much sway in the party, never before have they called the shots.

The second view about Romney’s decline also explains the “negative coat-tail” effect — why so many Republicans around the country in Senate and House races are ...

Published: Tuesday 11 September 2012
If Obama gets a second term, recreating that bargain — and getting enough votes from Congress to do so — will be his central challenge, and America’s.

 

The question at the core of America’s upcoming election isn’t merely whose story most voting Americans believe to be true – Mitt Romney’s claim that the economy is in a stall and Obama’s policies haven’t worked, or Barack Obama’s that it’s slowly mending and his approach is working.

If that were all there was to it, last Friday’s report from the Bureau of Labor Statistics showing the economy added only 96,000 jobs in August – below what’s needed merely to keep up with the growth in the number of eligible workers — would seem to bolster Romney’s claim.

But, of course, congressional Republicans have never even given Obama a chance to try his approach. They’ve blocked everything he’s tried to do – including his proposed Jobs Act that would help state and local governments replace many of the teachers, police officers, social workers, and fire fighters they’ve had to let go over the last several years.

The deeper question is what should be done starting in January to boost a recovery that by anyone’s measure is still anemic. In truth, not even the Jobs Act will be enough.

At the Republican convention in Tampa, Florida, Romney produced the predictable set of Republican bromides: cut taxes on corporations and the already rich, cut government spending (mainly on the lower-middle class and the poor), and gut business regulations.

It’s the same supply-side nonsense that got the economy into trouble in the first place.

Corporations won’t hire more workers just because their tax bill is lower and they spend less on regulations. In case you hadn’t noticed, corporate profits are up. Most companies don’t even know what to do with the profits they’re already making. Not incidentally, much of those profits have come from replacing jobs with computer software or outsourcing them ...

Published: Thursday 23 August 2012
The Republican Party platform committee now includes a provision calling for a constitutional amendment banning all abortions, without an exception for rape or incest.

 

We’re witnessing the capture by fanatics of what was once a great and important American political party. 

The Republican Party platform committee now includes a provision calling for a constitutional amendment banning all abortions, without an exception for rape or incest. This is basically Missouri senatorial candidate Todd Akin’s position. (At least the GOP platform doesn’t assert that women’s bodies automatically reject “legitimate” rapists’ sperm.)

Paul Ryan, Romney’s selection for vice president, has co-sponsored 38 anti-abortion measures while in the House of Representatives, including several containing no exception for pregnancies caused by rape or incest. 

But the GOP’s fanaticism goes far beyond the its growing absolutism about abortion.

Ryan’s proposed budget, approved by almost all House Republicans, is also an exercise in fanaticism. It replaces Medicare with vouchers that won’t possibly keep up with rising healthcare costs — thereby shifting costs directly on to the elderly. 

That budget also harms the poor and rewards the rich, but does little or nothing to reduce the federal budget deficit. Over 60 percent of its spending cuts come out of programs for lower-income Americans. Its tax cuts for the rich reduce revenues by $4.6 trillion over the decade while saving the typical millionaire hundreds of thousands of dollars a year.

The GOP’s looniness doesn’t even stop there. Republicans remain unwaivering in their support of state laws allowing or encouraging the profiling of Latinos. And unrelenting in their war against gay rights. 

It’s not just women, seniors, budget hawks, the poor, Latinos, and gays who are catching on to the Republicans’ extremism. Americans who don’t fall into one of these categories are becoming alarmed, too — as they should.

Published: Tuesday 14 August 2012
“What Romney didn’t say was that his running-mate’s budget — approved by House Republicans and by Romney himself — would cut Medicare by the same amount.”

 

Stumping in Florida today, Mitt Romney charged President Obama’s Affordable Care Act will “cut more than $700 billion” out of Medicare.

What Romney didn’t say was that his running-mate’s budget — approved by House Republicans and by Romney himself — would cut Medicare by the same amount.

The big difference, though, is the Affordable Care Act achieves these savings by reducing Medicare payments to drug companies, hospitals, and other providers rather than cutting payments to Medicare beneficiaries.

The Romney-Ryan plan, by contrast, achieves its savings by turning Medicare into a voucher whose value doesn’t keep up with expected increases in healthcare costs — thereby shifting the burden onto Medicare beneficiaries, who will have to pay an average of $6,500 a year more for their Medicare insurance, according an analysis of the Republican plan by the non-partisan Congressional Budget Office.

READ FULL POST 8 COMMENTS

Published: Thursday 26 July 2012
If any single person is responsible for Wall Street banks becoming too big to fail it’s Sandy Weill.

 

I’m in Alaska, amid moose and bear, trying to steal some time away from the absurdities of American politics and economics. But even at this remote distance I caught wind of Sanford Weill’s proposal this morning on CNBC that big banks be broken up in order to shield taxpayers from the consequences of their losses. Forget the bear and moose for a moment. This is big game. 

If any single person is responsible for Wall Street banks becoming too big to fail it’s Sandy Weill. In 1998 he created the financial powerhouse Citigroup by combining Traveler’s Insurance and Citibank. To cash in on the combination, Weill then successfully lobbied the Clinton administration to repeal the Glass-Steagall Act – the Depression-era law that separated commercial from investment banking. And he hired my former colleague Bob Rubin, then Clinton’s Secretary of the Treasury, to oversee his new empire.

Weill created the business model that Wall Street uses to this day — unleashing traders to make big, risky bets with other peoples’ money that deliver gigantic bonuses when they turn out well and cost taxpayers dearly when they don’t. And Weill made a fortune – as did all the other executives and traders. JPMorgan and Bank of America soon followed Weill’s example with their own mega-deals, and their bonus pools exploded as well.

Citigroup was bailed out in 2008, as was much of the rest of the Street, but that didn’t alter the business model in any fundamental way. The Street neutered the Dodd-Frank act that was supposed to stop the gambling. JPMorgan, headed by one of Weill’s protégés, Jamie Dimon, just lost $5.8 billion on some risky bets. Dimon continues to claim that giant banks like his can be managed so as to avoid any risk to taxpayers.

Sandy Weill has finally seen the light. It’s a bit late in the day, but, hey, he’s already cashed in. You and I and ...

Published: Thursday 19 July 2012
“Without a government that’s focused on more and better jobs, we’re left with global corporations that don’t give a damn.”

 

President Obama is slamming Mitt Romney for heading companies that were “pioneers in outsourcing U.S. jobs,” while Romney is accusing Obama of being “the real outsourcer-in-chief.”

These are the dog days of summer and the silly season of presidential campaigns. But can we get real, please?

The American economy has moved way beyond outsourcing abroad or even “in-sourcing.” Most big companies headquartered in America don’t send jobs overseas and don’t bring jobs here from abroad.

That’s because most are no longer really “American” companies. They’ve become global networks that design, make, buy, and sell things wherever around the world it’s most profitable for them to do so.

As an Apple executive told ...

Published: Wednesday 4 July 2012
Our system of government is America’s most precious and fragile possession, the means we have of joining together as a nation for the common good. It requires not only our loyalty but ongoing vigilance to keep it working well.

In the last two weeks, the Supreme Court has allowed police in Arizona to demand proof of citizenship from people they stop on other grounds (while throwing out the rest of Arizona’s immigration law), and has allowed the federal government to require everyone buy health insurance — even younger and healthier people — or pay a penalty. 

What do these decisions — and the national conversations they’ve engendered — have to do with patriotism? A great deal. Because underlying them are two different versions of American patriotism. 

The Arizona law is aimed at securing the nation from outsiders. The purpose of the heatlhcare law is to join together to provide affordable health care for all. 

The first version of patriotism is protecting America from people beyond our borders who might otherwise overrun us — whether immigrants coming here illegally or foreign powers threatening us with aggression. 

The second version of patriotism is joining together for the common good. That might mean contributing to a bake sale to raise money for a local school or volunteering in a homeless shelter. It also means paying our fair share of taxes so our community or nation has enough resources to meet all our needs, and preserving and protecting our system of government. 

This second meaning of patriotism recognizes our responsibilities to one another as citizens of the same society. It requires collaboration, teamwork, tolerance, and selflessness. 

The Affordable Care Act isn’t perfect, but in requiring younger and healthier people to buy insurance that will help pay for the healthcare needs of older and sicker people, it summons the second version of patriotism. 

Too often these days we don’t recognize and don’t practice this second version. We’re shouting at each ...

Published: Thursday 28 June 2012
Why the Supreme Court will uphold the constitutionality of the Affordable Care Act (Obamacare) by a vote of 6 to 3.

Predictions are always hazardous when it comes to the economy, the weather, and the Supreme Court. I won’t get near the first two right now, but I’ll hazard a guess on what the Court is likely to decide tomorrow: It will uphold the constitutionality of the Affordable Care Act (Obamacare) by a vote of 6 to 3. 

Three reasons for my confidence:

First, Chief Justice John Roberts is — or should be — concerned about the steadily-declining standing of the Court in the public’s mind, along with the growing perception that the justices decide according to partisan politics rather than according to legal principle. The 5-4 decision in Citizen’s United, for example, looked to all the world like a political rather than a legal outcome, with all five Republican appointees finding that restrictions on independent corporate expenditures violate the First Amendment, and all four Democratic appointees finding that such restrictions are reasonably necessary to avoid corruption or the appearance of corruption. Or consider the Court’s notorious decision in  READ FULL POST 9 COMMENTS

Published: Tuesday 26 June 2012
“Regressives in Congress have substituted partisanship for patriotism, placing party loyalty above loyalty to America.”

 

Recently I publicly debated a regressive Republican who said Arizona and every other state should use whatever means necessary to keep out illegal immigrants. He also wants English to be spoken in every classroom in the nation, and the pledge of allegiance recited every morning. “We have to preserve and protect America,” he said. “That’s the meaning of patriotism.”

To my debating partner and other regressives, patriotism is about securing the nation from outsiders eager to overrun us. That’s why they also want to restore every dollar of the $500 billion in defense cuts scheduled to start in January. 

Yet many of these same regressives have no interest in preserving or protecting our system of government. To the contrary, they show every sign of wanting to be rid of it.

In fact, regressives in Congress have substituted partisanship for patriotism, placing party loyalty above loyalty to America.

The GOP’s highest-ranking member of Congress has said his “number one aim” is to unseat President Obama. For more than three years congressional Republicans have marched in lockstep, determined to do just that. They have brooked no compromise. 

They couldn’t care less if they mangle our government in pursuit of their partisan aims. Senate Republicans have used the filibuster more frequently in this Congress than in any congress in history.

House Republicans have been willing to shut down the government and even risk the full faith and credit of the United States in order to get their way.

Regressives on the Supreme Court have opened the floodgates to unlimited money from billionaires and corporations overwhelming our democracy, on the bizarre theory that money is speech under the First Amendment and corporations are people.

Regressive Republicans in Congress won’t even support legislation requiring the sources of this money-gusher be ...

Published: Thursday 21 June 2012
“Dimon’s foreign affair is itself proof that unless the overseas operations of Wall Street banks are covered by U.S. regulations, giant banks like JPMorgan will just move more of their betting abroad – hiding their wildly-risky bets overseas so U.S. regulators can’t control them.”

 

The Commodity Futures Trading Commission, the main regular of derivatives (bets on bets), wants to extend Dodd-Frank regulations to the foreign branches and subsidiaries of Wall Street banks.

Horror of horrors, say the banks.

“If JPMorgan overseas operates under different rules than our foreign competitors,” warned Jamie Dimon, chair and CEO of JP Morgan, Wall Street would lose financial business to the banks of nations with fewer regulations, allowing “Deutsche Bank to make the better deal.”

This is the same Jamie Dimon who chose London as the place to make highly-risky derivatives trades that have lost the firm upwards of $2 billion so far – and could leave American taxpayers holding the bag if JPMorgan’s exposure to tottering European banks gets much worse.

Dimon’s foreign affair is itself proof that unless the overseas operations of Wall Street banks are covered by U.S. regulations, giant banks like JPMorgan will just move more of their betting abroad – hiding their wildly-risky bets overseas so U.S. regulators can’t control them. Even now no one knows how badly JPMorgan or any other Wall Street bank will be shaken if major banks in Spain or elsewhere in Europe go down.

Call it the Dimon loophole.

This is the same Jamie Dimon, by the way, who at a financial conference a year ago told Fed chief Ben Bernanke there was no longer any reason to crack down on Wall Street. “Most of the bad actors are gone,” he said. “[O]ff-balance-sheet businesses are virtually obliterated, … money market funds are far more transparent” and “most very exotic derivatives are gone.”

One advantage of being a huge Wall Street bank is you get bailed out by the federal government when you make dumb bets. Another is you can choose where around the world to make the dumb bets, thereby dodging U.S. regulations. It’s a ...

Published: Tuesday 19 June 2012
“In the upside-down world of regressive Republicanism, McConnell thinks proposed legislation requiring companies to disclose their campaign spending would stifle their free speech.”

Perhaps you’d expect no more from the Republican leader of the Senate who proclaimed three years ago that the GOP’s first priority was to get Obama out of the White House.

But Senator Mitch McConnell’s speech Friday at the American Enterprise Institute in Washington is simply bonkers.

The only reason I bring it up is because it offers an inside look at how the  Republican goal of getting rid of Obama is inextricably linked to the Republican Supreme Court’s decision equating corporations with people under the First Amendment, and to the Republican’s current determination to keep Americans in the dark about which corporations contribute what. 

In the upside-down world of regressive Republicanism, McConnell thinks proposed legislation requiring companies to disclose their campaign spending would stifle their free speech.

He describes the current push to disclose the sources behind campaign contributions as a “political weapon,” used by the Democrats, “to expose its critics to harassment and intimidation.” 

Harassment and intimidation? It used to be called accountability to shareholders and consumers.

Five members of the Supreme Court think corporations are people. Mitt Romney agrees. And now the minority leader of the Senate – the highest-ranking Republican official in America – takes this logic to its absurd conclusion: If corporations are people, they must be capable of feeling harassed and intimidated if their shareholders or consumers don’t approve of their political expenditures.

Hell, they might even throw a tantrum. Or cry.

But what exactly are corporations anyway, separate and apart from their shareholders and consumers? Legal fictions, pieces of paper.

And whom do corporations exist for if not the people who legally own them and those who purchase the products and services they sell? 

Clearly, ...

Published: Thursday 7 June 2012
“Here’s the truth: If the rich don’t pay their fair share, the rest of us have to pay higher taxes — or do without vital public services like Medicare, Medicaid, Pell grants, food stamps, child nutrition, federal aid to education, and more.”

 

I was on CNBC Tuesday when Bill Clinton gave an interview saying that, given the deadlock between Republicans and Democrats on Capitol Hill, it seemed likely the Bush tax cuts would be extended in 2013 along with all spending. When asked to comment, I said Clinton was probably correct.

But, of course, Republicans have twisted Clinton’s words into a pretzel. They say the former president came out in favor of extending the Bush tax cuts to the wealthy – in sharp contrast to President Obama’s position that they should not be.

It’s typical election-year politics, except for the fact that the Republican megaphone is larger this time around due to all the Super PAC and secret “social welfare” organization bribes, er, donations that are filling Republican coffers.

Here’s the truth. America has a huge budget deficit hanging over our heads. If the rich don’t pay their fair share, the rest of us have to pay higher taxes — or do without vital public services like Medicare, ...

Published: Tuesday 29 May 2012
“The way to avoid this austerity trap is to get growth and jobs back first, and only then tackle budget deficits. ”

We now know austerity economics is bad for weak economies facing large budget deficits. Much of Europe is in recession because of budget cuts demanded by Germany. And as Europe’s economies shrink, their debts become proportionally larger, making a bad situation worse.

The way to avoid this austerity trap is to get growth and jobs back first, and only then tackle budget deficits. 

The U.S. hasn’t yet fallen into the trap, but it could soon. Last week the non-partisan Congressional Budget Office warned we’ll be in recession early next year if the Bush tax cuts end as scheduled on January 1, and if more than $100 billion is automatically cut from federal spending, as required by Congress’s failure last August to reach a budget deal. 

Predictably, Capitol Hill is deadlocked. Democrats refuse to extend the Bush tax cuts for high earners and Republicans refuse to delay the budget cuts. 

If recent history is any guide, a deal will be struck at the last moment – during a lame-duck Congress, some time in late December. And it will only be to remove the January 1 trigger. Keep everything as it is, the Bush tax cuts as well as current spending, and kick the ...

Published: Tuesday 8 May 2012
“We speak to Reich about the success of Occupy in reshaping the national dialogue on the economy and why strong grassroots movements are needed to push elected leaders in Washington to enact a progressive agenda.”

In his new book, "Beyond Outrage," former Labor Secretary Robert Reich opens with a dedication to the Occupy Wall Street movement. He writes: "To the Occupiers, and all others committed to taking back our economy and our democracy." We speak to Reich about the success of Occupy in reshaping the national dialogue on the economy and why strong grassroots movements are needed to push elected leaders in Washington to enact a progressive agenda. Reich also discusses why austerity is not the answer to the economic crisis at home or in Europe.

Transcript:

AMY GOODMAN: And so, if President Obama were not re-elected, and it was a Republican in office, it was President Romney, do you think it would be any more extreme?

ROBERT REICH: Oh, yes.

AMY GOODMAN: In what way?

ROBERT 

Published: Wednesday 29 February 2012
“The negative wealth effect of home values, combined with declining wages, makes it highly unlikely the US will enjoy a robust recovery any time soon.”

Economic cheerleaders on Wall Street and in the White House are taking heart. The US has had three straight months of faster job growth. The number of Americans each week filing new claims for unemployment benefits is down by more than 50,000 since early January. Corporate profits are healthy. The S&P 500 on Friday closed at a post-financial crisis high.

Has the American recovery finally entered the sweet virtuous cycle in which more spending generates more jobs, more jobs make consumers more confident, and the confidence creates more spending?

On the surface it would appear so.

American consumers in recent months have let loose their pent-up demand for cars and appliances. Businesses have been replacing low inventories and worn equipment. The richest 10 per cent, owners of approximately 90 per cent of the nation’s financial capital, have felt freer to splurge. Consumer confidence is at a one-year high, according to data released on Friday.

The U.S. government has not succumbed entirely to the lunacy of austerity. Republicans in Congress have just agreed to extend both a payroll tax cut and extra unemployment benefits, and the US Federal Reserve is resolutely keeping interest rates near zero.

Yet the US economy has been down so long that it needs substantial growth to get back on track – far faster than the 2.2 - 2.7 per cent projected by the Federal Reserve for this year (a projection which itself is likely to be far too optimistic).

A strong recovery can’t rely on pent-up demand for replacements or on the spending of the richest 10 per cent. Consumer spending is 70 per cent of the US economy, so a buoyant recovery must involve the vast middle class.

But America’s middle class is still hobbled by net job losses and shrinking wages and benefits. Although the US population is much larger than it was 10 years ago, the total number of jobs today is no more than it was then. A significant ...

Published: Sunday 26 February 2012
“The teach-in was a partnership between the Campaign for America’s Future, Rebuild the Dream and Free Speech TV.”

Thousands of people who tuned into Tuesday night's "National Teach-In to Take Back the American Dream" got a remarkable one-hour tutorial on how the economy collapsed, and with it the economic security of millions of working Americans. They also received a sobering reminder that the political system that set the stage for the collapse can't be counted on to repair the damage without persistent demands from We the People.

"Grassroots mobilization and an energized citizenry, there is just no substitute for it," said Robert Reich, University of California at Berkeley professor and former Labor secretary, during the special edition of "The Big Picture with Thom Hartmann," a daily television talk show that airs on Free Speech TV and RT TV.

The teach-in was a partnership between the Campaign for America's Future, Rebuild the Dream and Free Speech TV. It was billed as a show that would "tell the real story of the financial crisis"—and it did so at times in blunt terms.

Robert Borosage, fielding the first question from host Thom ...

Published: Monday 7 November 2011
Robert Reich talks with Keith Olbermann about the Bank Transfer Day and Occupy movements.

Is Occupy Wall Street becoming more political? Will the next steps involve more focused political demands? What impact will it have on next year's election? What is the connection between Occupy Wall Street and the Bank Transfer Day movement?

Robert Reich talks with Keith Olbermann on Countdown about the development of these popular movements and their impact on how we do politics in this country. Reich believes that "people have economic power" that can be used to move those who hold political power.

Published: Thursday 27 October 2011
What better way for Obama to distinguish himself from Romney than to condemn Wall Street’s antics since the bailout, and call for real reform?

Next week President Obama travels to Wall Street where he’ll demand – in light of the Street’s continuing antics since the bailout, as well as its role in watering-down the Volcker rule – that the Glass-Steagall Act be resurrected and big banks be broken up.

I’m kidding. But it would be a smart move — politically and economically.

Politically smart because Mitt Romney is almost sure to be the Republican nominee, and Romney is the poster child for the pump-and-dump mentality that’s infected the financial industry and continues to jeopardize the American economy.

Romney was CEO of Bain & Company – a private-equity fund that bought up companies, fired employees to save money and boost performance, and then resold the firms at a nice markups.

Romney also epitomizes the pump-and-dump culture of America’s super rich. To take one example, he recently purchased a $3 million mansion in La Jolla, California (in addition to his other homes) that he’s razing in order build a brand new one.

What better way for Obama to distinguish ...

Published: Tuesday 2 August 2011
Robert Reich beleives America’s human capital is more important than financial capital
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