GET A BRAIN, MORANS!

GET A BRAIN, MORANS! or Doubling Down on Crazy


Those of you who frequent progressive websites like commondreams.org, dailykos.com, truthdig.com, alternet.org are familiar with the former statement which appeared on a sign carried by a smug, smiling young Teapartier. It speaks to the abysmal level of political discourse in America today.


The other seminal statement of regressive moranic politics; ‘Keep the government’s hands off my Medicare’, was shouted out by an old geezer at a town hall meeting held by his congressman.


Considering how well-liked Medicare is even amongst Repuglicans, even amongst idiot wingnuts who don’t even know it’s equivalent to socialized medicine, you’d think Repug leaders in congress would tread lightly when considering changes to the program. But no, they’re so full of themselves and giddy from their victory in the last congressional elections they’ve completely lost touch with reality and so Rep. Paul Ryan, head of the house budget committee, has come up with a grand plan to ‘save’ Medicare and reduce government expenditures by thoroughly gutting the program.


His plan, touted by the mainstream media and conservative punditocracy as a bold move to balance the budget involves replacing government guaranteed benefits with a voucher system in which seniors receive a fixed (inadequate) amount of money and are sent out into the private insurance market to get coverage. The fact that the medical insurance companies are widely despised by the population doesn’t seem to register with the Repugs so they voted en masse, in both the House and Senate, to back Ryan’s Medicare disaster.


The reason why they needed to gut Medicare was so they’d have the money to provide additional tax breaks to the corpses and the wealthy, supposedly to create jobs. Considering the many corporations that are enjoying record profits today that are not only not paying taxes but getting refunds, how much lower can taxes go? Moreover, American corpses are sitting on $1.6 trillion of cash reserves they don’t know what to do with because so many of the people who ordinarily buy things don’t have any money. When they do create jobs they’re mostly in other countries.


The US now has the greatest income disparity of any developed country. The wealthy have so much more than they can productively use, that most of it goes to speculation. Americans can thank tax policy that favors the flush for a large portion of high gas and food prices. Whereas in normal times most commodities futures contracts are purchased by end users, today 70% are bought by speculators.


Oh, I forgot, the reason why the Repugs want to slash any program that has anything to do with helping the people at large is because the budget is out of balance and the deficit needs to be tamed. That’s also why they want to reduce taxes on the wealthy… Aha! You don’t get the connection between lowering taxes and balancing the budget? Don’t worry, it’s called Voodoo Economics and thus a bit complicated for those of us non-morans.


In order for the Repugs to play to their dingbat base they’re getting themselves so far out on a limb, it’ll take a heroic rescue on Obama’s part to save them from electoral disaster. But not to worry, Mr. O is so good at compromising principles he either never had or only pretended to have for the purpose of campaigning, he’ll do a fine job at either saving the Repugs’ asses or giving up so much to wingnut fanaticism it’ll be the same as them winning.


Whereas Ryan’s budget doesn’t even pretend to balance the budget for another 50 years or so, there is a plan put forth by the 81 member congressional progressive caucus that would get the country’s books in order in about ten years. It’s simple really; tax stock transactions, capital gains, corporations and the wealthy; reduce military spending; set up a public option for health care and negotiate better prices for prescription drugs and presto, just like magic, the budget is fixed. Chances are, if you get your news from the corporate media, you’ve never heard of it: It doesn’t fit their worldview so gets no air time.


Seems to me the captains of the ship America must have a strong compulsion to run it aground, not to mention trash the world at large, because they can’t all believe the drivel coming out of their mouths, can they? I mean, true morans aren’t that stupid, are they?

Standard and Poor' Gets Religion

S & P, one of a handful of international rating agencies, has downgraded America’s status based on its $14 trillion national debt and $1.6 trillion 2011 deficit and the political inability to do anything about it. This is rich coming from an outfit that gave top rating to every toxic, junk-status mortgage backed security that came its way before the crash. It’s to be expected that you give a high rating to someone who’s paying you to rate them, otherwise they’ll find someone else to pay off for their Triple-A. All that aside, being craven and duplicitous most of the time doesn’t totally detract from your voice if you happen to get it right once in a while, so let’s take it from there.

Both parties objected to S &P’s downgrading, insisting they have plans to tackle the deficit. The Repugs want to save $400 billion a year by eviscerating, emasculating and slashing to the bone every federal program that has anything to do with helping anybody but the top few percent of income earners, who in fact get a tax cut. How cutting taxes for people who already have far more than they know what to do with can be part of a deficit reduction plan is something only a true believer Repug can understand. We know they are full of crazy, but that’s who the people elected, so that’s where the US is at.

Obama wants to save $360 billion a year by reinstating income tax rates for everybody earning over $250,000 that were in place before the Bush tax cuts. Either way that only deals with a quarter of the deficit. The Repug plan projects a deficit of $23 trillion in 2021, Obama’s plan about the same. Moreover, both plans are wildly optimistic in projecting a far healthier economy than anybody outside of government and in their right mind would dare to, but that’s part of the game.

Neither side wishes to deal forthrightly with the problem because nobody in politics wants to take credit for raising taxes. It’s not hard to understand why since it’s far easier to borrow to make the economy temporarily look good than tell the truth to the American people and be voted out of office at the next election. Sure, everything will look hunky-dory when you are spending borrowed money, but it’s like heroin addiction. You feel really great when you are high so that in contrast everyday life is hard to deal with so you cannot stop, you have to have more. You also build up a tolerance, so need ever increasing doses. At a certain point, the only thing that can save your life or sanity is cold turkey.

So instead of being realistic or practical it’s all left to the future to sort out. Think about that number, $23,000,000,000,000. Interest rates are relatively low now, but the US government and the Fed are making every possible move in the direction of increasing rates. That isn’t their stated purpose, but when you print shiploads of money and issue vast amounts of debt you lessen its value and increased interest rates is the only logical, possible outcome. So, figure a modest average of 5% interest on the debt and you come up with $1.25 trillion a year in debt service. If the administration’s (seeming) goal of cheapening the value of the dollar jacks up interest rates an additional two or three percent then service of the debt will amount to half of the current budget and an obviously untenable situation.

There are four, more or less equal parts to America’s $1.6 trillion budget deficit. The first is the military. Since 2000 the defense budget has doubled, amounting to about $400 billion. Obama recently announced, to great fanfare, a $78 billion reduction in military spending; except when you looked at the fine print it didn’t actually reduce the amount spent, only the projected increase was less than planned. So clearly not serious about deficit reduction.

A second part is health care spending – Medicare, Medicaid and prescription drug benefits. That one’s easy; single payer would save about $400 billion in overall health spending. Admittedly, not all of that is direct federal savings but a lot of it is.

The third part is Bush’s tax cuts. Obama wants to end the cuts for the wealthiest Americans, that’s another $400 billion. But really, there’s so much money sloshing around at the top, the entire deficit could be erased if corporations and the wealthy were obliged to pay their fair share of the tax burden. A combination of raising the top rate for millionaires and billionaires, a financial transaction tax, taxing capital gains the same as ordinary income, a corporate income tax which corporations actually paid and a wealth tax on the richest Americans would easily and painlessly completely eliminate the deficit. Considering the top 1% is sitting on assets of $19 trillion, just an 8% wealth tax alone would balance this year’s budget deficit of $1.6 trillion.

Finally, there’s the recession which has reduced tax revenue. Yes, corporate profits and the stock markets (headed for soon-to-burst bubble territory) are way up but they don’t pay much in taxes so that doesn’t help the budget much. There’s nothing on the horizon which suggests an end to the recession in the next few years, but at $400 billion that’s a deficit charge that’s relatively easy to sustain. Besides, that’s the only part of the deficit that is legitimate, the rest is all based on a lack of political will and common sense combined with cockamamie wingnut anti-tax insanity.

Instead of actually doing something to rein in the deficit, Obama and the Repugs will take a chainsaw to slash Social Security, Medicare and every program that benefits everybody below the top few percent. Why do I group Obama with the Repugs? Of the two people he chose to head his bi-partisan deficit commission, one, former senator Alan Simpson of Wyoming, positively despises Social Security, the other, Erskine Bowles, the nominal Democrat who served in the Clinton administration, is a fellow traveler. So even though SS has absolutely nothing to do with the deficit, they suggested serious cutbacks to the program. With $2 trillion in the bank, SS has all the money it needs for another 25 years and a little tweaking of tax rates will carry it decades further in the future. Obama talks about taking a stand to protect SS and other programs, but I don’t believe him for a minute. The only things he is good at are oratory and compromise.

The US is blithely and obliviously headed for a morass of its own making that could ultimately destabilize the whole world economy.

Obama the Disappointer

Obama has declared his candidacy for the 2012 elections... and it’s only 18 months before the poll takes place. America’s excruciatingly long and drawn out election season is one of the tell-tale signs of American political ossification. The process is hopeless; I can’t see anything good or reasonable or logical coming out of the congress or the president today. To do it right there needs to be regional primaries so candidates can focus on one area instead of wasting time and energy jetting back and forth across the country. One per month for four months starting in May of election year would allow campaigning to start at the beginning of 2012 instead of spring of 2011. Makes too much sense so can’t happen.

Mr O has three things going for him. For one, he’s a great ambassador to the world. He’s a very calm, steady and likeable guy and, as a representative of a long exploited and repressed minority, a great testament to the potential of American democracy. Compared to Bush in this regard, he’s a minor deity.

He’ll appoint decent people to the judiciary. If a Repug gets elected, it’ll mean another generation or two of feed the rich, starve the poor decisions from the bench.

Finally, most of his competition ranges from the laughable to the risible. The ones that are halfway reasonable and/or competent will have a difficult time getting through the tea-party electoral gauntlet. If a thoughtful, charismatic, moderate Repug showed up he or she’s likely to be toast.

At this point, I can’t see many thinking progressive people voting for Obama; rather, as true of every election for decades, they’ll be voting against the fearsome and/or cartoony right-wing opposition. I can’t think of a single major political initiative or stance that Obama’s taken that meets my standard of forward looking or compassionate. After compromising and kowtowing to the opposition while slamming and slandering his base, the people who worked for and voted for him, the so-called enthusiasm gap is wider than ever. Once again, Democrats, progressives, people who care will have a choice between crap and disaster.

The epitome of Obama’s disconnect from the reality of the common folk, the people who elected him was his choice of Jeffery Imelt, CEO of General Electric, to head his commission on jobs and competitiveness. GE is good at creating jobs, only most are in other countries, not in the US. The one area they have been hiring in is accountants who jobs it is to find legal loopholes to avoid paying their fair share of taxes. And at that they’ve been doing a great job. GE enjoyed profits of over $14 billion last year – five million earned in the US - but not only isn’t pay any taxes but getting a $3 billion refund.

There are all kinds of reasons why the US government thinks it needs to subsidize one of the largest, most profitable corporations in the world, but none of them are good. All of them are based on the wholesale purchase of government by the wealthy and powerful. They have their cockamamie supply-side theories and arguments for feeding the rich – they’ll create more jobs – but that has repeatedly shown to be ridiculously off the mark. Right now the country’s wealthiest citizens are sitting on $19 trillion of assets, while the corporations have nearly $2 trillion of cash reserves. How shoveling more money at them is suddenly going to create jobs is a conundrum only a wingnut teabagger could grasp.

GE also got billions from the bailout money since at one point they were making half their profits from financial services. So, funding for food stamps, Medicaid for the poor, Pell grants to enable more people to attend college, relief for people suckered into taking out mortgages they couldn’t afford to pay back, aid to the states who are in dire financial straits? Nope, we just don’t have the cash. Welfare for the world’s richest corporations and tax breaks for the already fantastically wealthy when the government is running a deficit equal to 12% of GDP; no problem, they obviously deserve it.

If deficit reduction is one’s goal, there is no way any amount of cutbacks on programs for the people at large can make up for the wealthy and corporations not paying their fare share of the cost of government. Neither can any amount of economic growth make up the difference without raising taxes on those who can afford to pay. Moreover, it’s living in Fantasyland to think the US can continue to run huge budget and trade deficits while printing oceans of money without the bill someday coming due.

Since I began writing this post Obama has gotten populist. Just after he declares his candidacy he says we’re going to tax the rich. (Where’s he been since his election in 2008?) We’re going to reduce the deficit by $4 trillion in 12 years, he says. Why stretch it out over 12 years, you ask, why not just say $340 billion a year? Well, I guess, because $340 billion doesn’t sound like much against a $1.6 trillion deficit, not even 25%, in fact.

Obama’s not leveling with the people – he obviously thinks it’s not politically tenable to tell the truth, assuming he does understand the situation – but that’s not anywhere near enough to tackle the deficit. Concurrently, deficits are also good for politicians since they make it seem the economy is doing a lot better than it really is. I mean, if I could borrow ten thousand dollars to gild my lifestyle, I’d be feeling great... until the bill came due. At this point the bill will not only be a crushing debt burden but a wholesale crash of the economy.

The catalyst for the coming financial implosion will come from rising commodity prices. As the value of the dollar slides, the price of commodities, since they are priced in dollars, will rise and increase inflation in America. As the price of oil, the largest component of America’s trade deficit, also moves up because of instability in producing regions combined with resource depletion, those rises will be intensified and the US will run hard up against an intractable, unsustainable situation. Rising inflation, according to current economic thinking, will require rising interest rates which will then increase the burden of servicing America’s huge debt.

Obama’s now only tinkering with the problem when the situation is just dire, which only makes it worse in the long run. When the situation becomes catastrophic, because it wasn’t dealt with when only dire, nothing less than great sacrifice on everyone’s part will make a difference. For every dollar of ease gained from borrowing, there’ll be equivalent pain in paying it back.

There only alternative to repaying loans is printing money and thus cheapening its value, which then brings an inflation death spiral. 2012 will be a tough year economically and an albatross around Obama’s electoral neck, but the Repugs will only have their failed policies of the past to cling to and thus look even worse than Obama.

The one thing the Repugs are good at is stealing elections and since no prominent Dumbocrat has ever had the courage or commonsense to call them to account for their thievery, not even those who’ve had elections stolen right out from under them, you can bet if the election is close the Repug will win.

I’m not optimistic. My cynicallity quotient is in the stratosphere. I’d hardly vote for Obama because he’s a likable guy and will appoint a few judges. Better to give the whole government to the Repugs and hope for a revolutionary backlash. If the people of Yemen can rise up, why not Americans?

Half-Assed is the New Standard

Once again, this time pertaining to financial reform, the Democratic congress has chosen half-assed over real reform. Hype over reality. Kid gloves over strong regulation. Though not directly connected, the recent sweetheart deal with Goldman Sachs is indicative of slap-on-the-wrist regulation. Biggest Fine Ever!, dominated the news. To recap, Goldman gave the task to create a mortgage backed security to a hedge fund manager named Poulson, who picked out the worst mortgages he could find because he planned to bet on the security tanking. Goldman then sold the securities to its clients without disclosing that vital information or the fact that they themselves were also betting against the security. They made a bundle on the backs of their own customers.

I’m not in America, nor have I ever had much connection to the drek the comes out of the mainstream media, but I can still state with some confidence that the sordid details were glossed over. The $550 million fine is but 4% of Goldman’s yearly earnings, which, as it happens, were no less than a gift from the American taxpayer. They moreover, were fined for civil, rather than criminal fraud - which it most decidedly was - and did not even have to admit their guilt. So simple, we give them tens of billions of dollars. They lie and cheat and steal like serial offenders. We bust them for one infraction, for which they use a tiny bit of the money we’ve showered them with to pay a paltry fine. Nothing to it, all a matter of the cost of doing business.

So now we have financial reform legislation touted as the biggest change since the Great Depression which has some potentially good parts but which doesn’t address the greatest problems of all. Yes, there’s a long and desperately needed consumer protection agency but it’s housed in the FED, notorious for being a lax regulator in the pockets of industry, instead of being independent. The effectiveness of the agency will depend in large part on who is chosen to head it. Considering the track record of the Obama administration, I wouldn’t be surprised if a former lobbyist for the banking industry were chosen to head it. The best candidate for the post is Elizabeth Warren, a woman who’s been a strong advocate for the agency, but she is considered ‘controversial’, possibly because she might actually be an effective regulator.

Yes, most derivatives will have to go through exchanges where purchasers will have to show sufficient capital. Hopefully they’ll no longer be able to buy $100 worth of derivatives with $97 of borrowed money. However, not all derivatives will be included in the regulations and the banksters have two full years to play before the rules take force.

The banksters will still be able to use their own capital – the money you have on deposit in your checking account, for instance – to gamble in ‘exotic’ securities, though they will be somewhat restricted in the amount they’ll be able to use for that type of speculation.

The problem is that the two most important, most imperative changes necessary to avoid the next too-big-to-fail meltdown did not make the cut. First, of course, the banks that were too big to fail before are even bigger and there’s nothing in the legislation to break them up. Supposedly the legislation sets up a mechanism so that if they get into trouble they will be wound down and closed but if they are still so large, you can bet your little finger they’ll be bailed out again.

Secondly, the Glass-Steigel act of 1933, which created a clear separation between retail banking and investment – read casino – banking and which was gutted on Bill Clinton’s watch in the deregulation fervor of the time was not reinstated. The biggest banksters can still engage in risky behavior knowing they’ll get bailed out.

And since Obama chose to save the banks but leave the peasantry to fend for themselves, the underlying causes of the meltdown are still operative; foreclosures are at an all time high and property prices are still going down. Under the most optimistic likely scenarios unemployment will stay around 10% for the foreseeable future.

The trillions of dollars thrown at the banks has set back the day of reckoning, but not eliminated it. The people who enabled the meltdown by pushing for deregulation and who in their rose-colored blindness never saw the crisis coming are in charge of Obama’s economic team so how are they going to fix the economy? More of the same stupidity?

One additional imperative if America’s economic ills are to be dealt with is to clamp down on speculation. As I’ve said before (sorry if my repetitions are boring you) what’s desperately needed to make a fairer society and end the tendency towards financial bubbles and their subsequent bursting - with devastating consequences for the greater economy - is to adequately tax financial transactions, capital gains and wealth in general.

There’s been a call lately to place a 0.025 tax on financial transactions. A person buying a million dollars of stock would pay a measly $2500 in taxes, which would bring in about $175 billion per year in revenue. That miniscule tax would be enough to abruptly end computerized trading where super computers owned by the likes of Goldman Sachs buy and sell stocks within thousands of a second. That is an important outcome, but that rate is not enough. Buyers of securities who do so for more than speculation would no more be deterred by a 1% tax than a .025 tax. An investor with a million bucks to plunk down in the market for the long haul is not going to be discouraged from buying stocks because of a $10,000 tax. Of course they’d bitch and moan but tough shit, that’s less than what a person earning $50,000 per year pays in income taxes so hardly worth anyone’s sympathy.

So then, figure about $700 billion in revenue from a 1% tax and half America’s huge deficit is wiped out. As stated previously, the rich have too much money: they don’t need it and it’s not good for the country or the world. However, even the quarter percent tax will be a hard sell in the congress since it’s owned, lock, stock and barrel by the banksters.

No, the big push now is to trim the deficit on the backs of Social Security recipients. We’re easy targets, so they think. Getting America’s fiscal house in order is of utmost importance but the idea that the only way that can be accomplished is on the backs of pensioners and Medicare and social services is ludicrous. Supposedly it’s not a good idea to raise taxes in a recession but that really only applies to taxes on lower income people who need and spend every penny they have. Raising taxes on the wealthy does almost nothing to dampen demand (how many yachts and Rolex watches can one person own?) and has virtually no negative effect on economic growth. The extra money you give a millionaire may be fun and games for him but does nothing to stimulate the economy except to engender asset bubbles.

I’m sorry, I can’t rant anymore on this; besides I’ve said it all before. The system is fucked and nothing in the political pipeline is going to change it for the better. So be it.