The Debt

The Debt

Even though Republicans got most of what they wanted in the debt-ceiling deal, including a long-term deficit reduction plan, the debt is not going away, either as a problem or a talking point. And it's true: the debt is a big problem. A mammoth one, in fact. However, if the House and Senate let the debt become the biggest issue of this and next term, they will be throwing away any tentative, stumbling progress the US economy has made and will send a message to the more than nine percent of Americans who are unemployed that they do not matter.
After all, the debt is a long-term problem; it has been around for decades and will be around for decades. Any serious solution to the deficit will be a big one and will involve years worth of budget-reassessment and will probably include cuts into the big three: Medicare, Medicaid, and Social Security as well as gigantic, damaging cuts into non-defense discretionary spending.
Now, though, is the worst time to make damaging cuts into non-defense discretionary spending, which includes education, infrastructure, job creation, and many other crucial government programs that are both the base of the US job creating ability and its "win the future" programs that make up most of President Obama's docket. These programs have already been cut to the bone through the debt-ceiling deal as well as from other budget cuts that were passed in this Congress, and cutting them any more would be devastating. There are school districts in America that will start up school in September with its students going to only four days of classes, and American students need to be in school more days, not less. Rabid debt-cutters always remind the US public that the deficit is putting a burdon on America's children, which is, generally, true. But that is not as big as a burden for American children as the one of school budget cuts. American children are mis- and under-prepared for a world economy, less educated then their foreign peers, and barely reaching standards that are dwarfed by those of Europe and Asia.
And then there is the matter of unemployment, the real problem in America, not the debt or budget deficits. When over nine percent of job-seeking Americans are unemployed, it is the responsibility of Congress to invest in job-creating measures. And it's not that hard; Congress has the power to fund desperately-needed projects for infrastructure or research or scientific development and to re-saturate the budgets of school districts. That's how jobs are created by the government. Some argue that it should be businesses creating jobs in America. Well, that's fine; they can. But in order for businesses to have any kind of incentive to move their job-creating factories and other means of production (after all, America is supposed to be a production-based economy) back to the US, Congress has to impose taxes on goods created out of the United States, even if the companies that make those goods are based in America. Otherwise, the jobs that left America will not return and nine-percent unemployment will become the norm while blooming overseas markets capitalise on low minimum wages and workers rights to attract the companies that once fueled US employment.
These are the important economic issues in America; these are the ones that need the imminent attention of Congress. While the debt is a problem and does require a long-term conversation on how to reduce it, the paramount issue is the jobs crisis America is facing and the elimination of non-defense discretionary spending that could have helped America "win the future."

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This is Not Egypt

This is Not Egypt

Perhaps the Republican Wisconsin State Senator misspoke when he compared Madison to Cairo. For, after all, however misguided Governor Walker may be, he is not former Egyptian President Hosni Mubarak; he is no undemocratic, corrupted dictator. No United States governor is. And rallying in opposition to union rule changes, however drastic, is not the equivalent of protesting for democracy. This does not, however, mean that the Wisconsin protesters' cause is any less important or serious.

Why do Republicans demonize unions, especially teachers' unions? It's not as though teachers are overpaid. Besides which, the Wisconsin teacher's unions have already agreed to the financial compromise Governor Walker offered. Now, he holds out on one issue- collective bargaining. A union's main role is to act as a singular representative for a group of people and to bargain with management to maintain or improve the people's rights. What use is a union without collective bargaining?
And this structural attack on unions in Wisconsin is not only confusing (the economic benefits of ending collective bargaining are negligible) but also dangerous. Governor Walker plans to create a condition where workers' rights can be slashed and teachers' paychecks can be shrunk for the benefit of a conservative social agenda against unions, not an economic one.

[Photo Credit: AP/Huffington Post]

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Graph of the Week: Big Government Spending

Graph of the Week: Big Government Spending

Featured by Paul Krugman, this graph shows the overall growth in government spending in the past four years, growing from a cold number of just over 4,000 billion dollars to just over 5,000 billion. So, yeah, the government spending has increased, though not dramatically. Notably, the rate of increase since the Obama administration took office has remained largely unchanged. We can talk all we want about the increase of government spending, but it hasn't really changed all that much. And let's not forget why spending has increased.
We were fighting two wars actively- and though the combat mission has since ended in Iraq, America is still acting as a strong financial support in the area. The recession is still in full swing, and the only way to pull ourselves out of the hole we've dug ourselves is to spend. Tax cuts are great, but they are the definition of blind populism. Sometimes, just sometimes, what Americans want and what the economy needs do not match up. And for the good of all America, the economy needs to see a major increase in monetary circulation.
While spending hasn't increased much, in general, what has is good spending. Good for America, good for the economy, and really the only way a recovery will be successful. Next time, before rants about 'big government' and too much spending become the politically acceptable narrative, it is important that why and what spending has become prevalent is examined.

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Elizabeth Warren

Elizabeth Warren

The aspect of the banking regulatory bill that will benefit consumers most in the long term is, doubtlessly, the creation of a new consumer protection agency. Its critics can rant all they want about how the agency will be superfluous, that all it is adding is more paperwork, but perhaps they remember the international fraud cases, focused in America and Europe, last year. Or maybe they recall the US's experience with Bernie Madoff? Or even the shoddy business practices by Wall Street companies that abetted the recession. The agencies already in existence failed here, and they have failed in scores of other cases. The new organization can cover these gaps, protecting Americans from fraud and malpractice in an unprecedented way.

The only way, however, that this agency can operate effectively and not go the way of, for example, the Minerals Managment Service, is if the person heading up the agency truly is devoted to its purpose. The work of Elizabeth Warren, who has been deeply involved in the creation of the agency, puts her in the best position to lead the group.

If the agency is properly headed and effectively run, the regulations it enforces can truly protect Americans to a much further extent than any predecessors. And isn't that the most basic reason for progress in government for a functioning society?

[Photo credit: topnews.net]

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Graph of the Week: Growth

Graph of the Week: Growth

Featured on The Huffington Post, Ezra Klein's Washington Post blog and The Rachel Maddow Show, this shows the growth of wealth under all Democratic presidents since 1948 (the blue bars) and all Republican presidents since the same time. Certainly, it is staggering. Not only did every income bracket grow more under the Democratic presidents, they each grew at a relatively similar rate with a slightly higher amount of growth for the lowest income group. That is how the economy should operate, as a mutually progressive rate that keeps wealth growing enough to encourage Americans to prosper but not to create such a division that the top percentile is the only one that experiences real growth. Under Republicans, the exact opposite effect occurred. Growth was uneven and polarized, with the top income bracket swelling (though not even growing as much as it had), and the others growing less and less in descending order. If nothing else, this is, in many ways, a validation of the economic policy of liberals in Congress who, for so long, have been treated as the party who didn't understand "real" America's economic problems. But as this chart so clearly lays out, spending works. It moves the economy forward, it creates jobs and it leads to an economic temprate where mutual prospering occurs.
In a chart, this is why who you vote for matters. And it raises the conundrum more clearly than any before it: why do so many low-income voters vote against their direct economic interest, especially when, like the tea party, they cite current financial conditions as a motivator for their vote?

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[Don't Forget the] Recovery

[Don't Forget the] Recovery

In March, we said:

In order to stimulate the economy, the US government must fund programs to provide jobs to American people, with a heavy focus on infrastructure spending. Infrastructure spending, or government funding of the building of roads, bridges, schools, etc, provides structure to America's crumbling infrastructure.
American buildings are falling apart. Destruction from natural disasters and simple age still ravage America's infrastructure, and the repair of roads and the like has become one of the most important issues today on a local level. America's buildings affect nearly every American every day, as they go to school, work, or home. The long term maintenance of failing infrastructure will result in incredibly high cost for the American taxpayer. If the problems are not immediately fixed, the financial consequences of quite literally rebuilding America will be great.
Additionally, infrastructure spending provides simple, viable jobs to US workers. In the current economy, with the shockingly high unemployment, workers are in desperate need of work that projects created by infrastructure spending will easily provide.
Often, the government will also hire small businesses to restructure the roads and buildings that must be repaired. Not only does that provide jobs, infrastructure spending funds small business, and, by extension, stimulates the economy on a national level.

Monday, President Obama proposed a 50 billion dollar transit spending plan, which is comprised mostly of infrastructure spending. Certainly, the plan is an important step in cementing the economy as President Obama's continued focus into the midterms, but also to confirm Obama's devotion to providing jobs for Americans. The plan includes an "infrastructure bank," which would be developed and run by the federal government but financed by both public and private investments.
This is the sort of plan that would pay dividends to the American people quickly and in large numbers, so the question arises as to why the plan is so small. Obama, as a senator, was a big proponent of plans like this one, so it isn't a policy-based trepidation on the part of the administration. The package was most likely set at a smaller size in hopes of gaining Republican votes, but didn't the President learn anything from the health care debate? Maybe if he set a higher goal, any 'compromise' set in Congress would be closer to what he actually wanted. Also, the administration was able to pass one of their main (if little-understood) policy goals, banking regulation, with a Republican filibuster and without conservative support. If there's anything that Republican congressmen are possibly inclined to support, it is a package like this one that will provide many jobs in their districts, even though conservative support for infrastructure spending is infrequent.
"1. It’s a good idea 2. It’s much too small 3. It won’t pass anyway — which makes you wonder why the administration didn’t propose a bigger plan, so as to at least make the point that the other party is standing in the way of much needed repair to our roads, ports, sewers, and more– not to mention creating jobs. Once again, they’re striking right at the capillaries," economist Paul Krugman wrote on his New York Times blog, Conscience of a Liberal on Tuesday.
Krugman is right. If only because of obstruction for obstruction's sake, passage- at least of this version- of the plan is unlikely. But this doesn't change the fact that the administration essentially threw away a good chance to appear completely in support of and devoted to creating jobs. Now, if the Obama administration wishes to use this economic focus to their advantage come November, they ought to try their hardest to get the new proposal passed.

[Photo credit: nytimes.com]

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Quick Fire News

Quick Fire News

To Kill an Ant
On financial regulatory reform, John Boehner said "[it is] killing an ant with a nuclear weapon." This, stated to the Pittsburg Tribune-Review was following his criticism of the compromise reached on the financial reform bill as serious overreacting to the financial crisis in 2008 that created the volatile economic situation today. This must be taken much more seriously by Congress. They have been handed the immense task of protecting our nation from risky financial practices that threaten it and protecting consumers from banks who sell them short.

Confirmed
Today, the Senate confirmed General David Petraeus to take Gen. McChrystal's former position as top commander in Afganistan. It is likely that Petraeus will continue the counter-insurgency strategy set by McChrystal. Although this was a key opportunity for President Obama to edit his policy, it seems that Afghan policy will stay the same; still, some good has come of McChrystal's comments. For the first time in what seems like months, the media is paying attention to international issues like Afganistan and, although less so, Iraq. It is imperative that the national conversation takes a focus on Afganistan so that the public remains educated and continues to act as a responsive force to extended stay there.

Having to wait for AID[S]
Due to America's still flattened economy, assistance for those with AIDS- assistance that maintains the life of many, is is incredibly limited supply. Additionally, HIV-positive Americans may more quickly develop AIDS without the needed- and very expensive- support. Many depend of government assistance to pay for this medical necessity, but, with the economy, the federal AIDS assistance programs have taken a severe hit.

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The Create-a-Few Jobs Bill

The Create-a-Few Jobs Bill

Although America may no longer technically be in a recession and although the job market has shown promising upwards trends, the American economy is far from fully recovered. The US Congress has the responsibility to work to improve the economy, including instituting programs that will create jobs for average Americans. Originally proposing a huge amount of jobs, the Senate jobs bill has shed billions of dollars in compromise with Republicans.
Senate Democrats have failed this year at standing their ground and protecting what they believe in. Sweeping compromises were made on the health care bill, but no Republicans voted for it. The potential regulation being proposed for the banking industry is being promised away for a few, possibly nonexistent votes. Now, the jobs bill is being cut and consolidated to the point where none of the originally beneficial parts of the bill will make much difference.
The Senate Republican caucus has an incredible ability to maintain party unity- possibly a little too well. However, compared to the Democrats' complete inability to stand firm on a single issue, the Republicans appear positively adept.
It is imperative that the Democratic party learns to stand together on important legislation. The regulations that were talked about a month ago in the Senate for the banking industry had the potential to protect consumers from risky business practices by banks. However, due to the Democrats' incessant need to compromise, the restrictions being discussed today are unlikely to make a difference.
Bipartisanship is a fantastic concept. However, bipartisanship requires two parties willing to compromise. Bipartisanship is not one party giving into the other's every demand in exchange for nothing.
Politicians who are in office today made a promise to the American people to improve the economy and attempt to secure American jobs. This won't get done unless either the Democrats can stand strong or the Republicans can learn to compromise.

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Why Regulation Matters

Why Regulation Matters

When corporations make seemingly wrong or immoral decisions, such as the bad investments allegedly sold by Goldman-Sachs or the massive bonuses given by failing, taxpayer reliant banks during the height of the financial crisis, Americans tend to blame these companies. However, no matter how horrifically immoral these private interests act, they are just that- private, for-profit businesses. They act as expected, in the best interest of their profits. It is not their responsibility to act with appreciation for the American consumer of the US economy; rather, it is the job of regulators. Irresponsible and immoral action by corporations is the fault of poor regulation and of regulators who do not fulfill their jobs.
Due to the privatized nature of the American economy, there is a paramount need for the US government to protect consumers. It is important that regulators are conscientious and unbiased judges for the American people, unlike those involved in the companies they regulate, like members of both the Treasury Department and the Department of Interior.
The 2008 economic crisis was a result of un-meticulous regulation by the federal government. The mining disaster in West Virginia could have been prevented if regulations had been stricter. If, historically, oil companies were better restricted, the BP oil spill would not have been so incredibly massive.

Critics call strong regulation overreaching by the federal government. However, it is the very job and nature of the US government to protect consumers, and, often, through regulation. Created “for the people, by the people”, it is the responsibility of the people’s government to act on behalf of and protect its citizens, whether this is from outside forces or from the nation’s own companies. The only way the American government can fully do this is to actively advocate and regulate.

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Europe's Economic Woes

Europe's Economic Woes

In 2008, the American economy took a turn for the worse, dropping the already volatile financial system into a full-blown recession. Correspondingly, the world economy fell. European debt is massive, and tenuous European economies were hit hard by the economic failure. Britain fell into a serious recession and began to fight bank fraud like the current Goldman Sachs case. Spain is being forced to reexamine their regulation of the banking sector, though are not doing so very willingly. Iceland, one of the first nations to fall victim to the international economic problems, experienced a huge financial meltdown and a disintegration of their monetary system.

In Greece, massive debt has ravaged the economy. Through tax cuts and decreased spending, the Greek government is attempting to control the crisis, to no avail. Other European nations have decided to bail out Greece, providing the nation with around 110 billion Euros, but the Greek economy is still distressingly bad. Angry Greek workers protested the new spending plan Wednesday, assaulting a Greek bank and causing the deaths of three inside the building; an attempt was also made to get into parliament. Historically, the Greek economy has been less than fantastic. Still, it can be saved with a combination of bailouts and careful federal spending to circulate money through the economy while slowly reducing Greek debt. Unfortunately, Greece is far from the only nation facing a horrific economy.

Divided savings banks in Spain have caused the Spanish government to take swift action and, today, the Spanish Prime Minister, socialist Rodríguez Zapatero, finally agreed to a deal with a more center-right leader on how to handle the failing financial system and what extent to bail out the banks. Spain also suffers from a 20% unemployment rate and massive deficit. As a final attempt to control the downwardly spiraling financial system, Spanish banks will be forced to merge together soon. The Spanish government have been and remain among the lead doubters of the Greek bailout by many European countries. 

Spain and Greece are far from the only countries suffering. Portugal's economy is suffering greatly, and eyes in Europe- at least those interested in continuing to bail out failing nations- are beginning to focus there. Until Europe's many and varied economies are repaired properly, the world economy will never be able to recover. 

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Jim Bunning's America

Jim Bunning's America

Senator Jim Bunning, the same man who predicted the death of Supreme Court Justice Ruth Bader Ginsberg and who called his general election opponent a "son of Suddam Hussein," has been filibustering the re-approval of the unemployment benefits bill, and single-handedly blocking its passage. If the bill is not passed by its re-approval deadline, thousands of unemployed Americans will lose their benefits, and there will but cuts to Medicare, another instrumental part of the bill. Bunning has stated his goal in filibustering as to stop unemployment benefits, as he feels that those who don’t have jobs should not be provided with those basic funds to live on, even in the current economy, where the January unemployment rate was 10.6 percent.

Senator Bunning has, recently, lifted his filibuster, and the Senate was able to pass the legislation. It is not just Bunning's actions that are at fault here, however, it is the basic philosophy that the government shouldn't have to help people in need.
This opinion is not unique to Senator Bunning. Senator John Kyl, who doesn’t have Bunning’s history of odd behavior and is not a radical conservative, has also expressed disapproval of the unemployment benefits bill, making comments that effectively expressed the belief that those who don’t have a job shouldn’t be rewarded for it.
Unemployment benefits are a basic service that Americans rightly expect from their government. Jobless Americans rely on these benefits to assist them though their daily life as they search for work. If the US Congress is unable to act to help Americans in need, it is not fulfilling its most basic purpose and is, therefore, a useless body.

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Quote 1/22/10

Quote 1/22/10

Paul Volker 

"Wake up, gentlemen. I can only say that your response is inadequate." 

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