But still no prosecutions. (Click the link.)
The House passed a budget deal that lets extended unemployment benefits expire, keeps that “Hunger Cliff” cut in Food Stamps that has overwhelmed food banks, and has a lower spending level than the original “Ryan Budget” that everyone thought was so terrible. It increases military spending, so DC contractors can ride the gravy train.
Lots of Democrats voted for this.
Austerity is holding back our economy — and that’s the plan. There is simply no other way to explain it. Republicans know voters blame (or credit) the party of the President for the economy, and they are doing everything they can to make things as bad as can be. This new “budget deal,” for example, holds the country in full austerity, with spending lower than even the original “Ryan budget” that shocked everyone.
Austerity kills economies and jobs, and they know it. We know it, they know it, everyone knows it. It is obvious in front of our faces, and Republicans continue to force cuts — with many Democrats going along.
Since the financial collapse government spending has been cut and the results have been terrible for the economy. Under every previous President government spending and hiring propped up the economy until recovery was underway. Republicans as well as Democrats understood this is how it has to be done. Until now.
In Charts: What if Obama spent like Reagan? Ezra Klein explains, “It’s simply a fact that real government spending fell in three of President Obama’s first four years.” Klein compares government spending to Reagan and ‘W’ Bush:
Under Reagan and ‘W’ spending went up. This helped the economy get out of recessions. Under Obama, with a much worse recession, Republicans forced spending to go down.
What was the effect of these cuts? This next chart shows how this is a drag on GDP:
So yes, the spending cuts are obviously hurting the economy.
Paul Krugman’s blog post, Unprecedented Austerity comments on this. He starts with a chart showing what has happened to government spending since Obama took office, writing, “Look at total government spending — federal, state, and local — and correct it for inflation …”
Krugman writes, “You can see that there was a brief, modest spurt in spending associated with the Obama stimulus — but it has long since been outweighed and swamped by a collapse in spending without precedent in the past half century.” He calls this, combined with private-sector deleveraging, “awesomely destructive.”
“Awesomely destructive.” And you can see it.
That “modest spurt in spending associated with the Obama stimulus”? This is the effect the stimulus spending had on jobs:
The stimulus took us from losing more than 800,000 jobs each month to gaining jobs every month since. It completely turned the situation around. But then it stopped and Republicans were able to force austerity and kill off the recovery.
This Budget Deal
So that’s the story of what has happened to government spending as Republicans impose austerity. Down down down. Now we have a “budget deal” (that even leaves out help for the long-term unemployed and doesn’t replace the “Hunger Cliff” $5 billion Thanksgiving Food Stamp cut, etc…) This next chart shows where this budget deal fits with earlier budgets proposals.
This is what is missing from the explanations of this budget “deal:” spending will still go way down. This is not a spending increase, it is less of a destructive, devastating cut than the full “sequester” would be next year. But it is still a cut, and it will still cost us jobs and economic growth. It will still be “awesomely destructive.”
And that is their plan. It will still let them campaign on “Obama’s terrible economy.”
This chart from Calculated Risk shows how government hiring pulled us out of previous recessions, which government firing is holding us in this one.
Key point, Presidents Reagan, GHW Bush, Clinton and ‘W’ all increased public hiring to help get us out of recessions. But under Obama and austerity the public sector has lost 703,000 jobs.
The public sector grew during Mr. Reagan’s terms (up 1,414,000), during Mr. G.H.W. Bush’s term (up 1,127,000), during Mr. Clinton’s terms (up 1,934,000), and during Mr. G.W. Bush’s terms (up 1,748,000 jobs).
However the public sector has declined significantly since Mr. Obama took office (down 703,000 jobs). These job losses have mostly been at the state and local level, but more recently at the Federal level. This has been a significant drag on overall employment.
The 2014 Election
So let’s take bets: do you disagree that Republicans are planning to campaign in 2014 by saying that the terrible economy is Obama’s fault?
PS: Some of these charts are from Three Charts That Show That Republicans Have Won The Budget War by Danny Vinik, who writes that “the fact of the matter is that the GOP has won the budget wars.” Let’s see if they take credit for the economy and terrible human pain they are causing.
Remember when everyone was getting laid off, and the government and the Fed gave hundreds of billions to banks, and the banks used the money to give huge bonuses?
This is that time of year when newspapers bother to write about how there are hungry people in America. But this year is special. As the recession drags on for the non-1%, cuts in Food Stamps have completely swamped the capacity of food banks and other non-government assistance. Meanwhile pending cuts in unemployment compensation and even more cuts in Food Stamps and other assistance programs mean things will get much worse for millions of invisible Americans.
Have you heard about the Nov. 1 “Hunger Cliff?” On November 1 the Food Stamp program was cut. Millions of Americans are out of work, unemployment benefits have run out (and been cut), winter is arriving in force, but Congress allowed a temporary, recession-boosted increase in the Food Stamp program to run out! $5 billion in urgently-needed assistance just went away.
Terrance Heath told the story in 47 Million Americans Are Going Over the “Hunger Cliff”, writing “Millions of Americans will plunge over the “Hunger Cliff” tomorrow, when $5 billion in cut to food stamps go into effect tomorrow. While Congress negotiates even more cuts, millions of Americans will face negotiating where their next meal will come from.”
Food Banks Swamped
The “Hunger Cliff” has hit people hard. The cuts mean people just can’t get enough to eat. Hungry people are swamping the food banks.
Senate Democrats, there have been over 400 filibusters. What are you going to do about it? We the People want to know. We thought we had elections. We thought things were decided and the country could finally move forward.
Are We the People the boss here, or are the billionaires and giant corporations behind this obstruction in charge?
Obstruction Of The People’s Will
Everything that We the People want to get done is being obstructed. In the Senate there is what the corporate media call “a requirement to get 60 votes for anything to pass” and in the House there is the “Hastert Rule” that prevents legislation from getting a vote if a majority that would pass it includes Democrats.
The country is being held back by an intentional strategy to block economic recovery and obstruct change that the public wants, so that Republicans can campaign for office saying the economy is bad so vote for us, and then mocking democracy saying, “How’s that hopey-changey thing workin’ out for ya?”
Are you going to do something about it? Are you going to deliver for We the People? We elected you to use the power of your office to deliver for us.
They sure are delivering for the billionaires and giant corporations who are paying them to do this.
Senate Democrats: What are you going to do about it? Who is the boss, We the People or the billionaires and giant corporations paying for the obstruction?
Here is Rachel Maddow interviewing Senate Majority Leader Harry Reid this week:
Please visit Fix the Senate Now.
There is a phrase I hear from DC people a lot: He/she is going to “go make some money.”
Usually this means that someone in government is going to take a job for a corporation, likely on Wall Street, “for a while” and then come back. It is, of course, collecting the payoff for playing along with the corporate agenda.
Of course, in progressive circles it means someone is going to find any old NON-progressive-organization job because that means actually making enough to live on…
Larry Summers for the Fed? Seriously? There are better choices for Federal Reserve chair; in particular, Janet Yellen is more than qualified and would do a great job.
Ezra Klein writes in, “Right now, Larry Summers is the front-runner for Fed chair,” “The word among Federal Reserve watchers right now is that the choice is down to Janet Yellen or Larry Summers as Ben Bernanke’s replacement.”
The White House is not actively shooting this down and this is just an insult to American women.
Trans-Pacific Partnership – the corporate sovereignty treaty – is coming and they’re going to try to push it through Congress with “Fast Track.” It’s really, really important to pay attention to this one.
You have seen what the “free trade” agreements have done to cities like Detroit and Flint, along with entire regions of the country, several key industries, the middle class and ultimately our democracy. Now a super-treaty is coming down the pike and corporate forces are asking Congress to give up their Constitutional authority to act as a check-and-balance with something called “Fast Track.” We have to stop this before it is too late.
Next Up: Trans-Pacific Partnership (TPP)
The super-treaty coming down the pike is called the Trans-Pacific Partnership (TPP). This is a mega-agreement involving several Pacific-rim countries at the same time, with a special “docking” provision that lets new countries join without new negotiations.
Only a small part of this “trade” treaty is about trade at all. Most of it is about elevating corporate rights above the rights of citizens and sovereign countries to reign them in. Much of TPP is about “investor rights.” “Investor” in this case means people with tons of money, and this is about giving them rights so their interests come above what citizens and their meddlesome laws might try to do to mess things up for them. Minimum wages, environmental protections, workplace safety and other “regulations” are all things citizens do to make their lives better but that make trouble for investors.
Tim Geitherner is getting paid huge “speaking fees” by the big banks he helped while in his government jobs…
… receiving about $400,000 for three speaking engagements.
A speech at a Deutsche Bank conference last month netted him about $200,000…
… He spoke in June alongside Nicolas Sarkozy, France’s ex-president, and Mario Monti, Italy’s former prime minister, at Deutsche Bank’s annual conference in the UK.
… Mr Geithner was also the main attraction at Blackstone’s annual meeting in April, and the following month appeared at Warburg Pincus’s annual meeting. He was paid no more than $100,000 by each of the private equity groups, according to people familiar with the matter.
…Within a week of stepping down as Federal Reserve chairman, for example, Alan Greenspan was paid about $250,000 to speak at a dinner for hedge fund clients of the now-defunct Lehman Brothers.
$400K so far, just three “speaking” engagements… His time as Treasury Sec will prove incredibly lucrative.
Not so good for you and me, though.
You might have heard that “austerity is dead.” You’ll certainly be hearing it, and with good reason: the U.S. deficit is down more than 50 percent from what President Bush left behind, projections of the rise in medical costs that drove future deficits are way down, the “intellectual foundation” that justified the push for cutting government has collapsed (as if it ever existed), and the European experiment has shown that budget cuts really just make things worse – much, much worse – and cause misery and suffering to boot. Meanwhile we have two real problems to worry about: unemployment and crumbling infrastructure. So can we hire people to fix the infrastructure now?
Economists Had Learned How To Revive A Falling Economy
Before the financial collapse economists had nailed down the way to get out of an economic crisis: Government has to spend to pick up the drop in demand caused by businesses and consumers cutting back. This investment into the economy causes businesses to hire again, which helps people to be able to spend again, and after things recover the resulting growth pays off that investment.
The Great Depression in particular had taught us that a downward spiral could develop in which a drop in demand caused businesses to cut back, lay people off and/or cut wages, and of course this caused people to have to cut back, which meant demand dropped even more so businesses laid off more people, so demand dropped more, etc.
The FDR administration tried various things to stop this spiral and found that programs that injected money into the economy, such as unemployment benefits and other assistance, direct hiring, investments in infrastructure, etc., could turn things around. And then after things turned around we had all that new, modern infrastructure driving continuing economic growth!
We also learned the hard way. In 1937 the government cut back too soon, and the economy sank into recession again. Then World War II came along, the government spent massively, and the economy grew so much that the ratio of debt to the size of the economy shrank dramatically. We had it figured out.
Borosage, in Democrats Must Overcome Clinton Nostalgia,
The sad fact is that the old economy is coming back. Austerity continues to starve public investments vital to our future. The banks emerged from the crisis bigger and more concentrated than ever. Despite the domestic natural gas explosion, the trade deficit is still more than $1 billion a day, with the deficit with China setting records.
Extreme inequality is getting worse. The wealthiest 1 percent of Americans captured a stunning 121 percent of the income growth in the first two years after the economic collapse. Everyone else, on average, lost ground. The jobs being created offer less pay and fewer benefits than those that were lost. More than 20 million people still need full-time work.
I wrote about this in Just Stop It: This Is NOT A Good Economy. We Can Fix It.
PS Borosage makes a key point: “No matter how repellant Republicans may look to these voters, they are unlikely to turn out in large numbers for a party whose policies have failed them.“