Yves here. It’s worth reading Jon Walker’s piece on the sequester gamesmanship along with Black’s take. It looks like Obama has administered a big self inflicted wound, although between his PR apparatus distancing him from reality, and it taking time for the sequester to hit the economy (as in it won’t generate the sort of quick pain needed to shift the political calculus), it will take a while for him to recognize that.*
By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Jointly posted with New Economic Perspectives
We have been strangling the economic recovery through economic incompetence – and worse is in store because President Obama continues to embrace (1) the self-inflicted wound of austerity, (2) austerity primarily through cuts in vital social programs that are already under-funded, and (3) attacking the safety net by reducing Social Security and Medicare benefits. The latest insanity is the Sequester – the fourth act of austerity in the last 20 months. The August 2011 budget deal caused large cuts to social spending. The January 2013 “fiscal cliff” deal increased taxes on the wealthy and ended the moratorium on collecting the full payroll tax. The Sequester will be the fourth assault on our already weak economic recovery.
We have a jobs crisis in America – not a government spending crisis and the cumulative effect of these four acts of austerity has caused a certainty of weak growth and a serious risk that we will throw our economy back into recession. The Eurozone’s recession – caused by austerity – greatly adds to the risk to our economy because Europe remains our leading trading partner.
President Obama and a host of administration spokespersons have condemned the Sequestration, explaining how it will cause catastrophic damage to hundreds of vital government services. Those of us who teach economics, however, always stress “revealed preferences” – it’s not what you say that matters, it’s what you do that matters. Obama has revealed his preference by refusing to sponsor, or even support, a clean bill that would kill the sequestration threat to our Nation. Instead, he has nominated Jacob Lew, the author of the Sequestration provision, as his principal economic advisor. Lew is one of the strongest proponents of austerity and what he and Obama call the “Grand Bargain” – which would inflict large cuts in social programs and the safety net and some increases in revenues. Obama has made clear that he hopes this Grand Betrayal (my phrase) will be his legacy. Obama and Lew do not want to remove the Sequester because they view it as creating the leverage – over progressives – essential to induce them to vote for the Grand Betrayal.
Further evidence of Obama’s continuing support for the Sequester was revealed in an odd fashion today. Bob Woodward is in a controversy because of his column about Sequestration. His column made two primary points. First, the administration authored the Sequester. Second, Woodward claimed that Obama was “moving the goal posts” by asking for revenue increases. Woodward was criticized by many Democrats for this column and created a further controversy by saying that the administration threatened him. It turned out that the purported threat was based on a statement by Gene Sperling, Obama’s economics advisor. David Weigel’s column summarizes the dispute.
Weigel comes out where I do on each of the three issues. Yes, the administration created the Sequester and has fought to keep it alive when Republicans tried to kill it. (The Republicans “started it” by their obscene extortion in 2011 in which they threatened to force a default.) No, Obama has not moved the goal posts. No, Sperling did not “threaten” Woodward. I raise this background simply to provide a context for Sperling’s comments about the reasons that the administration created and continues to support the Sequester.
The idea that the sequester was to force both sides to go back to try at a big or grand bar[g]ain with a mix of entitlements and revenues (even if there were serious disagreements on composition) was part of the DNA of the thing from the start. It was an accepted part of the understanding — from the start. Really.
There may have been big disagreements over rates and ratios — but that it was supposed to be replaced by entitlements and revenues of some form is not controversial. (Indeed, the discretionary savings amount from the Boehner-Obama negotiations were locked in in BCA [Budget Control Act of 2011]: the sequester was just designed to force all back to table on entitlements and revenues.)
Obama continues to want to “force” a “grand bargain” in which he proposes to make large cuts to social programs, some tax increases, and reductions in the safety net. Again, Obama can easily break with this strategy of choking our economic recovery by supporting a clean bill that would kill the Sequester instead of our economy.
The good news is that Representative John Conyers has made the Obama’s task simple by sponsoring exactly that clean bill in the one sentence form many of us have been urging: “Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 is repealed.” Amen.
I propose that we launch an effort, open to all, to support Conyers’ bill and demand that our representatives in the House and the Senate promptly enact it.
___
*Also, on the Woodward being threatened claim, if you read the e-mail exchange, Sperling clearly screamed at him. But by faux-graciously waving it off as no biggie, Woodward gave away his ability to complain about it later.
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Well, I have been saying for years that nobody moves us closer to feudalism faster than a Democratic President. Clinton and Obama together have done more damage to the country than Bush pere et fils. Go figure.
I acknowledge that our Republican Presidents have been mostly fools, charlatans, and an occasional moron. Nobody with a scintilla of intellectual honesty or an acquaintence with history would want to eat dinner with any of them.
But let’s get over the idea that electing Democrats makes things any better. The last time that happened was 1932. Everything Roosevelt did after 1936 was counterproductive, and it is more than likely that he deliberately provoked Japan in order to immerse us in WW II (who do you suppose benefitted from that? Can anyone spell Rockefeller?).
Truman was a total loss, presiding over Taft-Hartley, the Korean war, and wholesale persecution of anyone proclaiming faintly liberal sympathies.
Since 1960 we have had five Democratic Presidents. Kennedy never really got started, Johnson engineered a fruitless 10 year war that decimated my generation, Carter produced an energy crisis and 21% interest rates, Clinton reduced financial regulation to rubble, and Obama’s achievements are summarized nicely by Mr. Black, who seems to be our one living honest and savvy economist.
Voting only seems to encourage them.
But I will say that republican presidents unlike the democratic ones for the most part select judges that want to bring back a Jim Crow America, e.g., Nixon’s Rehnquist, the appointments of the Bush Presidents.
Don’t believe the lies about Carter. The energy crisis and the high interest rates were induced partly by Nixon/Ford policies, partly by right-wing maneuvering designed to discredit Carter, and partly by external events which nobody could have controlled (the decisions of the OPEC countries).
Carter was overly militaristic, but on the whole he was the best President in my lifetime.
Reagan, of course, was actually a traitor who should have been hanged for treason. He specifically sent people to Iran to tell them NOT to release the hostages. (So that he could get elected.)
I believe that the public has been tricked into buying the false narrative that what is unfolding is “a game of chicken” between the parties, when instead, we are being played really in a game of “good cop, bad cop”. Both sides are diligently sticking to their respective sentiments waiting to see which mix of the story lines will result in us succumbing to their utilmate goal of dialing up the power of the 0.1%.
The difference between European austerity and US austerity is the European’s say “It’s for the best. We have made up our mind. Stuff it.”, whereas in the US, we try to make it look like some giant accident.
It’s sad enough that we are being sold out by those we elected to protect us, but to add insult to injury, our version of the crime is served up by cowards.
Let me add however, that there are few exceptions of individuals that I believe are true respresentives of The People of the United States. I can immediately think of three that happen to be in the same small region of the country: John Conyers of MI, Marcy Kaptur of OH, and Senator Carl Levin of MI. They are part of a very small band courageously protecting us from ourselves. I pray that they can evidentially arouse enough patriotism inside, and outside DC to stop this mad march to catastrophy.
Another hero in my book is Federal Judge Jed Rakoff of the Southern District of NY. Probably what we need most is him and one other just as courageous and honorable on the Supreme Court.
Levin was threatened by the decline of the auto industry, but I didn’t see him standing with Sanders during the extension of the Bush tax cuts. His committees have loyally pushed for more defense spending.
Senator Carl Levin authored the N.D.A.A., so he’s off my list.
Senator Sherrod Brown of Ohio is on my list, along with Marcy Kaptur, John Conyers and, although he’s far away in Vermont, Bernie Sanders.
And I agree about Judge Rakoff.
I agree about Rakoff. The only Senators who I can count as reliable “good guys” are Bernie Sanders and Tom Harkin.
In the US House, there are more. Rush Holt (one of the only actual scientists in Congress) is on my “good guy” list. And Waxman has been pretty good over the years.
I prefer the metaphor of professional wrestling.
It’s all great entertainment, but don’t mistake it for a true contest.
Well Said!
Conyers has been a congressman since 1965 (thats not a typo) and a fairly reliable liberal. Except when it comes to public access to publicly funded research. Or anything to do with copyrights. As the former chair of the judiciary committee that has jurisdiction over IP he was long ago captured by the publishing industry and he is extreme in his views. His position is basically: Privately funded research belongs to the private sector, while publicly funded research belongs to… the private sector.
http://en.wikipedia.org/wiki/Fair_Copyright_in_Research_Works_Act
He also put the DOJ in charge of enforcing copyright infringements, another example of the DOJ’s capture by the corporates.
http://en.wikipedia.org/wiki/PRO-IP_Act
Wonder what he thought about the Swartz prosecution. Not much:
http://conyers.house.gov/index.cfm/news?p=press-releases
OK I was off topic. My bad. The bill now has 3 cosponsors. They are the usual suspects:
Grayson, Alan [D-FL9]
Jackson Lee, Sheila [D-TX18]
Wilson, Frederica [D-FL24]
You can keep an eye out for future cosponsors here:
http://www.govtrack.us/congress/bills/113/hr900
11th dimensional chess strikes again!? Hoocoodanode the Repubs would call the President’s bluff?
But why wouldn’t they when:
1) they got what they wanted at the ‘fiscal cliff’; and
2) they know that Defense cuts will be restored as soon as there is any hint of conflict? And even if there is no conflict, the Defense industry will be fine because the Iranian threat will fuel ME arms purchases for years to come.
Concerning point 2, I don’t think there is a workable majority for raising defense cuts. The especially hideous, defense increases were done while housing values were rising and people could buy home, but unlike earlier defense increases, these were very focused in a few areas. People ignored it while education funding was nominally (the key word) rising.
The media has been a devoted accomplice, and people don’t appear to be that upset over the defense cuts. What will happen is there will be 96 Senators faced with people more concerned about the non-defense cuts and the economy than Maryland and Virginia’s economies dependent on wasteful (another key word) government spending.
Between the tribalism which infects the elite and that reality, I’m not certain they are coming back.
So everything is going according to plan:
Je répète: These are not bugs. They are features. Not only for Obama, but for his (remaining) fans as well.
Adding… Whaddaya mean, “self-inflicted”? What “self” are we talking about, here? Black persists in “public purpose” oldthink, when it couldn’t be more clear that Obama and his feral owners, operatives, and fans have dispensed with that notion entirely. “[P]rovide for the general welfare” had a good run, but now the political class doesn’t even give lip service to it.
…perhaps more pregnantly, not to “anti-trust” or “campaign finance reform”..
Anybody know who is turning the gears on this rack I find myself. It is really uncomfortable. Soon, I think, I shall hear my joints dislocate. This is sequester, is it not? I feel more like it is the inquisition. Just who is this pope of the economy? Can’t anyone tell him that the foundations of his economic religion are based on false assumptions.
Amazing how our economic rulers have skewed the game so much that the board requires so much additional climbing gear. The winning team have bribed the referees, tilted the field, cheated and stole…. now they claim to be brave by projecting their patriotic song while cowering behind the ramparts they have created.
Boswell tells us that Samuel Johnson made this famous pronouncement that patriotism is the last refuge of a scoundrel on the evening of April 7, 1775. He doesn’t provide any context for how the remark arose, so we don’t really know for sure what was on Johnson’s mind at the time.
However, Boswell assures us that Johnson was not indicting patriotism in general, only false patriotism.
Well I now think, as my joints pop, I know what Johnson was thinking.
Professor Black leaves me with a choice I neither like or fully understand. Why shouldn’t people support the sequester cliff? It would actually cut a small shard out of our military madness. Piercing that veil while leaving medicare and SS of the table as I understand it. Reducing MIC in any way is something I, a peaceful man, am willing to take great pains to do.
If people jump on the vague Conyers bill bandwagon… then we are simply asking ourselves and others to trust this band of thieves… that they (congress and admin) would suddenly do the right thing if we save them from their own sequester. Ha!
Stop negotiating with errorists!
The defense increases were done while there were nominal spending increases in other sectors or at least promises during devolution. When push comes to shove, Americans will start to wonder why 3 of top 6 wealthiest counties in the country are next to the Pentagon when they are seeing teachers being laid off.
We haven’t seen defense increases without some kind of circus to deflect from the real crime. When Congressman X leaves his district, he’s isn’t going to find much support for restoring “defense cuts” without the circus. Bush had his $300 and $600 checks and some fraudulent stuff NLCB. Housing prices were rising, and people were afraid. Fear works, but fear isn’t reliable. Not making the rent is scarier than anything in Syria for most people.
A View from the Street
From election day through Dec. 31st talk of the fiscal cliff killed business. Then, once that was behind us, we had a fabulous January. Now in February with the incessant talk of the Sequester the government again killed business. When will they get out of the way and let us work in peace.
Here is everything you need to know about politics for the next 2 years:
“House Speaker John Boehner says President Obama’s inauguration speech made clear his second-term focus is to “annihilate the Republican Party.”
The Ohio congressman made the comment during a private luncheon Tuesday sponsored by the Ripon Society, a Republican group.
“Given what we heard yesterday about the president’s vision for his second term, it’s pretty clear to me that he knows he can’t do any of that as long as the House is controlled by Republicans,” Boehner said, according to a transcript. “So we’re expecting over the next 22 months to be the focus of this administration as they attempt to annihilate the Republican Party.”
http://politics.blogs.foxnews.com/2013/01/23/boehner-obama-wants-annihilate-republican-party
He also told those who attended the event that he thinks the goal of members of the Obama administration is “to just shove us into the dustbin of history.”
Obama’s inaugural speech was a message by a re-elected pol with no more campaigns to wage at the ballot. The next stop is spoils, reward friends and punish enemies. I have to laugh at the arm chair psychiatrists, especially the money people on this site, who have no clue about politics, history or anything else not on a chart or a graph. The number one problem for capitalists has always been other capitalists. While labor has never been much of problem since the servile revolts of the Roman Empire or even the French Revolution, competition will kill you. Kennedy, unprepared to repeat WWII in Asia, was murdered and Johnson, with no stomach for continuing, just walked out of the office. LBJ, let me repeat, for those of you who still don’t get it, the American pol who lusted for power more than life itself, drops out of a sure fire re-election. And, we get Nixon from 1968 forcing us to stay in Viet Nam until March of 1975, when we were driven out by the North Viet Namese.( and yes, I remember that Nixon was forced out, unlike Johnson, on August 9th, 1974).
The neo-cons of war and de-regulation have failed, and are now in the way of making money and retaining power. Neo-liberalism is NOT about self destruction in the form of austerity for America, that is for peripheral areas. The tried and true structures of the social order were put in place for a reason and tearing down the load bearing walls of social security and medicare will take the wealth and power of America along with it. Symbolic gestures to make the so called “tough or adults in the room” choices that some in Obama’s party will find distasteful or unthinkable, is his sop to make him look reasonable and emotionally stable in the sight of the republicans who seem to be unhinged. Chained CPI is an actuarial adjustment that the Social Security Commission could recommend and have put through Congress without the wholesale liquidation of the program or its privatization in any measure at all. It’s a joke, because at this point in time, the republicans will not agree with anything at all. No one predicted this 3 years ago, but things got out of control, just like life.
If the explicit attacks on the New Deal and the Great Society by the republicans, and the additional ape shit crazy tea party/libertarian automatons don’t present a golden opportunity for Obama to wreak havoc and vengeance on the people who tormented him for 4 years, then he will let a great crisis within the republican party go to waste. Nothing is going to get done with this republican crew in Congress. Obama couldn’t preside of the complete liquidation of the New Deal and the Great Society if he wanted to do so with all of his heart and soul because the people he is dealing with are incapable of negotiating a deal. So, if you can’t get a grand betrayal, have grand guignol!
We the people are just caught in the cross fire.
Paul,
marginally brilliant, as usual…BUT bushbama is obviously happy to (just as did bush-Iraq) kick the can down the road…just as (history-you intone) 30’s depression era back and forth blame game political football handoffs…
Paul: you haven’t studied economics enough. The number one *preoccupation* of capitalists has been competition from other capitalists.
The number one *risk* for capitalists — a risk which they generally ignore, and which they are ignoring right now — is a worldwide economic depression (or “recession”, or “bust”, “general glut”, to use several obsolete terms for the same thing).
FWIW, it would be nice if Obama anihillated the Republican Party — it deserves anihillation, it’s well on the road to anihillation all on its own, and getting rid of it would open the door to an actually useful party — but actually Obama’s been throwing the Republicans life preservers (when he should be throwing them anchors). It’s political malpractice.
Support for the Conyers bill is not nearly enough. Rather needed at this late hour are public unions courageously organizing a general strike whose sole demand is legislation mandating a 1% #WallSteetSalesTax principally targeting financial institutions (and glorified hedge funds, like GE) trading thousands of billions of dollars per day. Time for the “job creators” (a euphemism for asset stripping thieves whose grease in all the right places has for decades produced hardly a squeak) to pay up.
A general strike? With elenventeen people ready to take my at-will job if I leave it to go on a general strike? Multiply that by millions of employed-by-a-whisker people and you see that a general strike is unlikely.
A general consumer slowdown . . . a “shoppers sit-down strike” which could cripple and then strangle the economy with no one in particular to be blamed for organizing it or taking part in it . . . might be more viable IF the OverClass decided to give in and submit to the tax you mention rather than waiting for the National Shoppers Sit Down Consumption Strike” to run its course by strangling the economy into firing a hundred million randomly selected people.
But indiVIDual National Consumption Strikers could not be identified and fired by name EARly in the process. “Honest, officer . . . I’m not on Shopping Strike, I’m just trying to save some money. Is it against the law to stay inside my own house when I am not at work or going to work or coming from work?” Yes . . . I think a National Shopping Strike might be easier to recruti people into and easier to get people to join than a National Jobdoer Strike.
Obama hasn’t inflicted any wounds on himself. He’s set. He doesn’t need to run for re-election any more than Calvin Coolidge did. He can retire to write moralizing opinion columns spouting bullshit — as Calvin Coolidge did — and live a comfortable retirement somewhere safe.
He’s inflicted a wound on the COUNTRY, on the FEDERAL GOVERNMENT, and on the DEMOCRATIC PARTY. That’s not the same as a self-inflicted would.