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The Monster Is Eating Itself

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Back on February 10, 2009 – before President Obama had completed his first month in office – two students at the Yale Law School, Jeffrey Tebbs and Ady Barkan, wrote an article which began with the point that the financial crisis was caused by the recklessness and greed of Wall Street executives.  Tebbs and Barkan proposed a “windfall bonus tax” on those corporate welfare queens of Wall Street, at the very moment when budget-restrained states began instituting their own economic austerity measures so that The Monster could be fed:

Last week, Connecticut Gov. M. Jodi Rell proposed a state budget that slashes crucial public services, including deep cuts to health care for kids and pregnant women, higher education and consumer protection.  She says that the cuts are necessary to close our state’s budget shortfall, but she’s apparently unwilling to increase taxes on Connecticut’s millionaires.

That is to say, while your hard-earned tax dollars are funding Christmas bonuses for Wall Street’s jet-set, Connecticut’s government will be cutting the programs and services that are crucial to your health and safety and to the vitality of our communities.

Since that time, “reverse Robin Hood” economic policies, such as the measures proposed by Governor Rell, have become painfully widespread.  As an aside:  Despite the fact that Governor Rell announced on November 9, 2009 that she would not seek re-election, the conservative Cato Institute determined that Rell was the only Republican Governor worthy of a failing grade on the Institute’s 2010 Fiscal Policy Report Card.

The entity I refer to as “The Monster” has been on a feeding frenzy since the financial crisis began.  Other commentators have their own names for this beast.  Michael Collins of The Economic Populist calls it “The Money Party”:

The Money Party is a very small group of enterprises and individuals who control almost all of the money and power in the United States.  They use their money and power to make more money and gain more power.  It’s not about Republicans versus Democrats.  The Money Party is an equal opportunity employer.  It has no permanent friends or enemies, just permanent interests.  Democrats are as welcome as Republicans to this party.  It’s all good when you’re on the take and the take is legal.  Economic Populist

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The party is also short on compassion or even the most elementary forms of common decency.  It’s OK to see millions of people evicted, jobless, without health care, etc., as long as short term profits are maintained for those CEO bonuses and other enrichment for a tiny minority.  It’s perfectly acceptable for this to go on despite available solutions.  If you don’t look, it’s not there should be their motto.

Beyond that, The Monster’s insensitivity has increased to the point where it has actually become too numb to realize that the tender morsel it is feasting on happens to be its own foot.  Until last year, The Monster had nearly everyone convinced that America would enjoy a “jobless recovery”, despite the fact that the American economy is 70 percent consumer-driven.  Well, the “jobless recovery” never happened and the new “magic formula” for economic growth is deficit reduction.  As I discussed in my last posting, Bill Gross of PIMCO recently highlighted the flaws in that rationale:

Solutions from policymakers on the right or left, however, seem focused almost exclusively on rectifying or reducing our budget deficit as a panacea. While Democrats favor tax increases and mild adjustments to entitlements, Republicans pound the table for trillions of dollars of spending cuts and an axing of Obamacare.  Both, however, somewhat mystifyingly, believe that balancing the budget will magically produce 20 million jobs over the next 10 years.

Simon Johnson, who formerly served as Chief Economist at the International Monetary Fund, conducted a serious analysis of whether such “fiscal contraction” could actually achieve the intended goal of expanding the economy.  The fact that the process has such an oxymoronic name as “expansionary fiscal contraction” should serve as a tip-off that it won’t work:

The general presumption is that fiscal contraction – cutting spending and/or raising taxes – will immediately slow the economy relative to the growth path it would have had otherwise.

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There are four conditions under which fiscal contractions can be expansionary.  But none of these conditions are likely to apply in the United States today.

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The available evidence, including international experience, suggests it is very unlikely that the United States could experience an “expansionary fiscal contraction” as a result of short-term cuts in discretionary domestic federal government spending.

Economist Stephanie Kelton explained that the best way to lower the federal budget deficit is to reduce unemployment:

The bottom line is this:  As long as unemployment remains high, the deficit will remain high.  So instead of continuing to put the deficit first, it’s time get to work on a plan to increase employment.

Here’s the formula:  Spending creates income.  Income creates sales.  Sales create jobs.

If you think you can cut the deficit without destroying jobs, dream on.

Dr. Kelton has identified the problem:  Deficit reduction schemes which disregard the impact on employment.  Nevertheless, The Monster is determined to press ahead with a “deficits first” agenda, regardless of the consequences.  The Monster will have its way because its army of lobbyists has President Obama under control.  As a result, we can expect increased unemployment, a diminished tax base, less consumer spending, less demand, decreased corporate income, lower GDP and more deficits.  The Monster’s gluttony has placed it on a course of self-destruction.  Perhaps that might be a good thing – if only it wouldn’t cause too much pain for the rest of us.


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Because He Is A Tool

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November 13, 2008

The “Tool Watch” continues.  In the days after the historic 2008 Presidential election, intrigue abounds as to the future political career of Joe “The Tool” Lieberman.  Lieberman was re-elected to the Senate in 2006 as an Independent candidate (after having lost the Democratic primary to Ned Lamot).  The Tool realized that his betrayal of the Democrats could result in the loss of his many important appointments, should Obama get elected.  Joe had already “sold his soul” to Bush, Cheney and Rove in his quest for re-election.  At that point, he had no choice but to “go for broke” by endorsing John McCain.  However, The Tool went beyond that.  He spoke ill of Obama at the Republican Convention.  He followed McCain around throughout the Presidential campaign, giving rally speeches himself, in addition to serving as McCain’s “nodder” when McCain would question Obama’s patriotism.  The Tool questioned Obama’s patriotism with his own allegations that Obama placed allegiance to the Democratic Party ahead of his allegiance to the country.  The Tool evoked further outrage from Democrats by campaigning for “down ticket” Republicans, while stumping around the country for McCain and Palin.  Now that Obama has been elected President, many Democrats are hungry to avenge The Tool’s malicious acts by stripping him of the appointments earned while in good standing as a member of the Democratic Party.  The most notable of these is his chairmanship of the Senate Committee on Homeland Security and Governmental Affairs.  President-elect Obama has expressed his desire to see Lieberman remain in the Senate Democratic Caucus.  Obama has said nothing about The Tool’s numerous committee and subcommittee memberships or chairmanships.  In keeping with his “No Drama Obama” image, the President-elect appears to have distanced himself from any “blood feuds” involving Lieberman.

My animosity toward The Tool is based on the fact that he is a pathetic ass-kisser.  He knew that his committee appointments would be in jeopardy in the event of an Obama victory.  Accordingly, he didn’t simply endorse John McCain.  He followed McCain around as a stray dog, looking for a new home.  Those of us with the experience of having worked with such people, know that these individuals don’t deserve much in the way of respect.  One of the reasons we enjoy watching “action movies” is because the “ass-kisser” is usually the first person to get killed (by either the hero or the villain).  It seems as though justice and karma are well-served in these movies, when such cretins get their due.

Many people who consider themselves “liberal Democrats” seem anxious to make The Tool an example for future, would-be defectors.  On November 12, MSNBC’s Rachel Maddow expressed her concern that the Lieberman case could set a precedent, regardless of what action the Senate Democrats might take in light of The Tool’s transgressions.  Her November 10 program included an interview with Steve Clemons of The Washington Note website.  Mr. Clemons suggested removing Lieberman from his chairmanship of the Committee on Homeland Security and Governmental Affairs because of the The Tool’s fear mongering on the subject of homeland security throughout the 2008 campaign.  Clemons emphasized the proposition that Lieberman should not be able to use homeland security or national security as a foundation to batter Democrats who want a smarter national security policy.

Rachel Maddow discussed this subject again on November 12, with Indiana Senator Evan Bayh.  Senator Bayh discussed the possibility that Lieberman might be unwilling to suffer the indignity of being stripped of his appointments and thus relegated to the status of backbencher.  Bayh worried that under such circumstances, The Tool  might self-destruct:  resign from the Senate and allow Connecticut’s Republican Governor (Jodi Rell) to appoint a “pure Republican” to replace Lieberman.  To Bayh, this would be a more undesirable alternative than putting up with a traitor.  His logic seems based on the rationale that because Lieberman is such a tool, the Democrats could make him their tool once again.  Bayh suggested a two-part compromise.  First, Lieberman should be allowed to retain his chairmanship of the Committee on Homeland Security with “oversight”.  Bayh pointed out that a committee chairman could be replaced at any time.  If those overseeing The Tool reached the conclusion that he should be ousted, it would only then become appropriate for such action.  The second part of Bayh’s proposed compromise would involve an apology from Lieberman for his antics during the 2008 campaign.  I would like to suggest another alternative.  In the event Lieberman might be unwilling to make such an apology, the Senate Democrats should demand that The Tool have the word “Craftsman” tattooed on his forehead.