GOP STILL PEDDLING BUDGET MYTHS

You can find my most recent article on GOP budget myths - "GOP still peddling budget myths" - in the Bakersfield Californian here.

I'll post the entire piece, with pictures, at a later date.

- Mark

GAS TAX FACTS

Ever wondered what each state pays in gas taxes. Here it is ...

Yeah, California, my home state, is ranked at the top.

The worst part is that I live in one of the largest petroleum producing counties in the country, but we have one of the highest prices for gas in the nation. I'm currently paying between $4.09 and $4.16 a gallon for diesel. Ouch.

I say we do what the socialists in Alaska do, and implement a Permanent Dividend Fund for Kern County.

- Mark

YOU'RE AN A**HOLE IF ...

Via imgur, via diggit. You're an a**hole if you do this  ...

Just saying.

- Mark

BORROW & SPEND REPUBLICANS

I've been saying this for years. To see it in print from a Republican is always a good thing. Though the current crop of leaders in the GOP could care less about the facts, I'm posting the LA Times op-ed in it's entirety below.
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Borrowing and spending the GOP way
The big deficit facing the U.S. is mostly Republican in origin, the Congressional Budget Office says. The Bush tax cuts alone have added $3 trillion in red ink, yet the party wants to double down on its failed policy.

By Mike Lofgren
June 26, 2011


President Obama's fiscal policies are a mess. Whatever one thinks of the need for stimulus in a severe recession, it is obvious that running trillion-dollar deficits for years on end is unsustainable. Moreover, his proposals are dishonest. The nonpartisan Congressional Budget Office concluded that his proposed 2012 budget underestimates spending while overestimating revenues.

Sadly, the Republicans have offered no viable alternative.

The failure of our leaders to offer realistic budget proposals was a major reason I decided to retire after 28 years in Congress, most of them as a professional staff member on the Republican side of both the House and Senate Budget Committees. My party talks a good game, railing about the immorality of passing debt on to our children. But the same Congressional Budget Office that punctured Obama's budget also concluded that the major policies that swung the budget from a projected 10-year surplus of $5.6 trillion in 2001 to the present 10-year deficit of $6.2 trillion were Republican in origin.

Consider the two signature GOP policies of George W. Bush's presidency: the wars and the tax cuts. Including debt service costs, Bush's wars have cost about $1.7 trillion to date. Additionally, as part of being "a nation at war," the Pentagon has spent about $1 trillion more than was expected in the last decade on things other than direct war costs, which has been a bonanza for military contractors but a disaster for the federal budget. And finally, there has been another trillion dollars spent domestically in response to 9/11, including spending on such things as establishing the Homeland Security Department and increasing the budgets for the State Department and the Veterans Administration.

The Bush tax cuts have added another $3 trillion in red ink. While Republican leaders wail that Americans — particularly their rich contributors — are overtaxed, the facts say otherwise: U.S. taxpayers, particularly the wealthiest, pay far less in taxes than they would in most other developed countries. Today, the 400 wealthiest Americans have as much wealth as the bottom 125 million. The GOP insists that those wealthy people use their money to create jobs, and that taxing them more heavily would ultimately hurt the economy. But, if that's so, why was the rate of job creation in the decade after the Bush tax cuts the poorest in any decade since before World War II?

Like a drunk swearing off hooch for the hundredth time, Republicans are now trying to show they are serious about controlling the deficit by saying they won't raise the debt ceiling unless they get through some of their cost-saving projects, like privatizing Medicare. Meanwhile, they want revenue increases "off the table," even though, at 14.8% of GDP, revenues are at their lowest level in 60 years. And the budget passed by the Republican-controlled House further cuts taxes on the wealthy, a fact it glosses over with optimistic growth forecasts.

Raising the debt ceiling isn't, as the GOP tries to say, Congress giving itself permission to continue excessive spending: It's something that's necessary to pay for past congressional decisions on taxes and spending, and those decisions were made primarily when Republicans were in charge.

No one wants to have to raise the debt ceiling. But not doing so could lead to at least a temporary default on our debt, which would force up interest rates for everyone and add more than a trillion dollars to the cost of servicing the federal government's debt. Moreover, a default could seize up our private financial system in a manner similar to the Lehman Bros. collapse. Do the Republican holdouts really want that? If so, they might want to take a hard look at the streets of Athens.

The policy of full faith and credit, constructed by Alexander Hamilton more than two centuries ago, has served us well. We shouldn't abandon it to a misplaced ideology.

Polarization based on juvenile talk radio sloganeering is dragging this country to the cliff's edge. If neither the Democrats nor the party I have served for three decades is willing to act like adults, perhaps it's time for a party that is willing to step into the void.

Mike Lofgren retired as a congressional staffer on June 17.
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- Mark

THE SARAH PALIN CHANNEL II

Earlier this month we heard about Sarah Palin's mind-numbing recount of Paul Revere's famous ride (according to Sarah, it was to warn the British). So I posted Conan O'Brian's hilarious The Sarah Palin History Channel skit here. In that spirit, I'm posting another clip that I'll call The Sarah Palin History Channel II. Enjoy.



Too funny. Kudos to my daughter for finding it.

- Mark 

WHY RYAN'S MEDICARE PROPOSAL NEEDS HELP ...

Of the many policy objectives presented by Rep. Paul Ryan's (R-WI) budget proposal - which is supposed to help fix the budget mess - perhaps the worst is what he and the Republicans are proposing for America's publicly managed, and much beloved, Medicare program.

To be sure, protecting tax cuts for billionaires, and setting social security up so that its funds get sent to Wall Street, are unconscionable budget goals. But they don't hold a candle to Ryan's proposal to dismantle Medicare so that the the health insurance industry - whose profits quadrupled during the Bush years - get greater access to the Medicare financial pie.

Specifically, Ryan's plan does two things:

* In effort to reduce program costs it will force elderly Medicare enrollees to pay more out of pocket expenses.

* In the name of "free market" competition, Ryan's proposes to hand Medicare management over to the private health insurance industry.

The idea behind making the elderly spend more is a simple one. If the patient pays more of their medical costs the Medicare program (and the taxpayer) doesn't have to dig so deep. Pretty simple, right? The problem here is that estimates suggest a senior who collects $12,000 per year from social security will see half of that amount ($6,000) go to the health care industry, even with vouchercare (most seniors take in about $28,000 per year).

When it comes to bowing to the free market mantra, while the Ryan plan continues to allow the federal government a small role in the program (like collecting taxes and transferring them to the health care industry) Ryan's plan essentially privatizes Medicare.

It's this prospect that scares the hell out of many Americans.



To be sure, there are examples where the private sector does an effective job of managing health care. But they're mostly in Europe.

The Netherlands and Switzerland, for example, have privately managed insurance providers running their "universal coverage" health systems. But here's the catch. Government mandates and restrictions for private insurers in these countries go well beyond what is proposed or practiced in the U.S. And, besides, European-like mandates strike most Americans as "socialistic."

But the socialism tag is a red herring in America's political arena for two reasons.

First, most politicians and most Americans have no clue what socialism is, so they're prone to throwing the term around for every initiative they don't really understand. Consider it's usage as a child-like tantrum, akin to when kids are told they have to leave the store.

Unfortunately, these "socialism" tantrums do nothing for our political dialogue, except lead to silly and forced caricatures, like this one ...



Second, socialism has nothing to do with America's consumer-driven model, which has been "widely discredited" on many levels. Business and Pulitzer Prize-winning journalist Michael A. Hiltzik writes that assuming elderly consumers - who now have "skin in the game" - will become discriminating health care insurance shoppers is wishful thinking.

As Hiltzik pointed out in "A moral approach to curing Medicare," studies show that (financially) strapped patients and consumers:

* Forgo not only ineffective but effective treatment.
* Lack the expertise to judge what's necessary and what's not.
* Are vulnerable to multimillion-dollar ad campaigns by drug and device companies pushing them into uninformed decisions.

Throw in a life threatening illness that hits at the wrong time, or the on-set of Alzheimer's, and what you're looking at is a real mess when you think about the elderly in a health care market dominated by an unregulated insurance industry.

There's more on how terrible the Ryan plan really is (read Hiltzik's piece; it's excellent). But you get the point. Ryan's plan is not well thought out.

- Mark

FOX NEWS FALSE STATEMENTS

Jon Stewart profiles Fox News' false statements ...

The Daily Show - Fox News False Statements
Tags: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

- Mark

SO MUCH FOR TRICKLE DOWN ECONOMICS ...

This should close the door on the idea that free markets allocate resources best. From "The Triumph Of  'Trickle Up' Economics" ...

From 1947 to 1992, the top 5 percent of all families never consumed more than 17 percent of the national "aggregate income." But since 1993, that top 5 percent has never earned less than 20 percent of the national bundle.

The only way to justify this is if you believe that the top 5 percent are smarter, harder working, and more deserving than everyone else. They're not.
 

 
The article is short, and has some holes, but you can read it here.

- Mark

A LESSON IN THE STRAW MAN ARGUMENT

Have you ever wanted to know what constitutes a Straw Man argument? Well wonder no more.

A few weeks ago I penned this op-ed on GOP budget myths for our local paper, the Bakersfield Californian. This morning a friend called to let me know that this was the op-ed response. It's too funny (and a bit sad too when you consider that this kind of argument passes for serious public debate in many corners of America).

With that, I think it's important to take a quick look at what the Straw Man argument is all about ...

The key to making a Straw Man argument is getting people to believe that you're addressing the key points of your opponents argument when, in fact, you've misrepresented, taken out of context, or oversimplified the original arguments (creating grotesque caricatures of your opponent helps the cause too). Put more simply, you recreate your opponents argument, but do so in such a poor manner that it's easy for you to take it apart.

In many cases it's easy for those making a Straw Man argument to distort or poorly recreate their opponents position because they don't really understand the points made in the first place. Or they have no real understanding of the topic.

While no one really knows the origins (etymology) of the Straw Man argument, it's often tied to the idea of scarecrows and dummy figures, which are created to give the illusion of reality. These recreations, as we know, are picked apart (by crows, as it were) and easily tossed around because they're poor substitutes for the real thing.

The overall goal of the Straw Man argument is to give the impression that you've covered the points when what you've actually done is distorted or trivialized the original issue(s). If you do a real good job you can get your opponent to respond to your poorly made argument, which sucks your opponent down an intellectual cul-de-sac, where facts are redirected, innuendo replaces substance, and the original points are lost.

The classic Straw Man argument might go like this:

Person A: Our prisons are stuffed with petty criminals who drain our financial resources. We need to decriminalize the actions of those who use small amounts of pot to help ease prison budgets.

Person B: Legalizing drugs will only lead to more crimes by those looking for drug money. More crimes means you will be mugged and robbed. Be afraid of supporting those who want to legalize drugs.

In the example above, if you get into a debate with Person B you have to go off track to explain that your original argument is tied to public finance and the decriminalization of small, petty users. Person B, on the other hand, will have none of it. That's the goal. They will try and paint you as a supporter of drug users and crime. Points of fact are lost to ideology and point scoring. Policy is undermined in the long run.

In the case of my op-ed article on GOP budget myths the author who responded to my piece begins by ignoring the very specific numbers I present on the sources behind our budget deficit. He then says plainly "Both the GOP and the Democrats have annual deficits. The GOP is the party trying to change that behavior." And, like a bad horror movie, the Straw Man begins to grow ...

In the process the author ignores how President Reagan tripled our national debt, how President Bush doubled it, and that President Clinton left budget surpluses to his successor. He also ignores what I had to say specifically about the origins of our budget deficits today. And on it went ...

If anyone were to respond point-by-point to the arguments made by the author they would be drawn into a cul-de-sac of ignorance, where political grandstanding and point scoring drowns out the real issues that need to be addressed. Fox News does this. Rush Limbaugh does this too. Glenn Beck is a master of the tactic.

That many Americans don't understand the tactic is most unfortunate.

 - Mark  

WHY THE STATE INTERVENES ...

In my book I discuss how market players can operate with little or no moral compass, and make money in the process. From slavery and market conditions under the Black Codes, to coerced prostitution, war profiteering, child labor, and drug economies (both legal and illegal), market players have been able to justify making money under just about every market setting - no matter how degrading or morally repugnant.

This is why this article from Business Pundit - "10 Global Businesses that Worked with the Nazis" - is so relevant. It tells us that market players can rationalize profits in just about any business environment, no matter how distasteful ...

Like it or not, it's these type of market activities that demand market intervention from the state.

- Mark

OUR HORRIBLE ECONOMY (in less than 3 minutes) ...

Robert Reich explains the truth behind our horrible economy ...



- Mark

FOX NEWS HITTING NEW RACIAL LOWS

This Fox News intro from Eric Bolling is both childish and disrespectful (at best) ...




During the segment, Human Events editor Jason Mattera declared that "Barack Obama likes to defecate on American allies," and Bolling had this exchange with Fox Business reporter Sandra Smith:

REP. JOHN GARAMENDI (D-CA): There are good guys. There are bad guys out there. We've got to stay engaged.

SMITH: We don't have to have them at home, though.

BOLLING: Thank you, Smitty.

SMITH: We don't have to have them in our White House and entertaining them.

BOLLING: Where? Where? Where? Go ahead, say it. Where?

SMITH: In the hizzy.

BOLLING: In the hizzy. Thank you, Smitty.

SMITH: Do we really have to have them in the White Hizzy?

Did Fox News ever refer to the White House as the "hizzy" when President Bush visited with African leaders?

Fortunately, Whoopi Goldberg had an interesting - if not humorous - response to Bollings' ignorant race-baiting introduction ...


- Mark

HOW BANKS ARE RIPPING OFF THE AMERICAN TAXPAYER

I can't see how this is a surprise to anyone ...

In a recently released study from the Congressional Research Service we learn that the nation's largest banks profited off of our nation's financial crisis-era programs by borrowing cash for almost-zero percent interest. Then they lent it back to the federal government at substantially higher interest rates.

Yeah, that's right, deliberately low interest rate programs - designed and justified with the idea of getting money into the hands of ordinary middle-class Americans - were hijacked by banks who borrowed cheap money from Uncle Sam (a.k.a. the American taxpayer). They then showed their appreciation by hoarding it (for their rainy days).

And when it suited their interests they lent it back to Uncle Sam and the American taxpayer at higher rates.

Let's see, where I have seen this before ...

Oh, yeah. I've been writing about these dynamics for years now. So have others, like one of my favorites, Barry Ritholtz.

The worst part is that trillions - perhaps as much as $9 trillion - was spent, lent, credited, or guaranteed ("encumbered") by the Federal Reserve over the past years, but no one really knew where the money was going. Yeah, that's right, the people who are supposed to be following and tracking where our money goes are about as clueless as Chief Wiggins.

But nobody pays attention to this stuff because getting people to take a look at how America's economy really works (especially with Maiden Lane, TALF, and other trillion dollar corporate welfare giveaways) is akin to getting Americans to line up for a root canal. It might be good for them, but they simply won't do it.

So, we continue to live a lie, believing in the myth that the banks do the right thing and that "free markets work best."

Sigh ...

- Mark

GRADUATION THOUGHTS FOR EVERY ERA

I attended another graduation ceremony this morning. As I sat listening to the speeches, I thought how most commencement speeches could begin and end with lessons tied to what Mahatma Gandhi called the seven deadly sins.

Wealth without work ...

Pleasure without conscience ...

Knowledge without character ...

Commerce without morality ...

Science without humanity ...

Worship without sacrifice ...

 Politics without principles ...

According to Gandhi most of the destruction and violence in society today are a product of humanity committing these seven deadly sins over and over again.

Kind of hard to disagree.

- Mark

SARAH PALIN: THIS WEEK'S VILLAGE IDIOT

While Sarah's supporters are bending over backwards to defend her history malfunctions, there's not a "Twinky" defense in the books that can make this right ...





Paul Revere rode to alert the British? Good one. Sarah later tried to defend her ignorance on Fox News (where else?). Chris Wallace's barely concealed smirk says it all.

Ignored in all of this is that Sarah also got her history on the Statue of Liberty wrong. She claimed that the French gave us the Statue of Liberty as a way of warning us not to make the same mistakes that they (the Europeans?) did. It was actually given to help celebrate the end of slavery (which helps explain the broken chains and shackles at the bottom of the statue).

I'm with Bill Maher on this one. Sarah shouldn't be on a summer bus tour. She should be in summer school. What an idiot.

- Mark

THE SARAH PALIN HISTORY CHANNEL ...

After Sarah Palin's most recent history malfunctions, this Conan piece is too funny ...




- Mark

VOUCHERCARE IS NOT MEDICARE

One of the more interesting developments since Paul Ryan's budget proposal was released is watching Republicans scramble and whine because of how their healt care proposal for Medicare is being described in the media. What they're really mad about is that people are learning the truth. Their biggest gripe is that critics of Ryan's plan are explaining how the GOP plan dismantles Medicare, only to replace it with something Paul Krguman is adequately calling Vouchercare.

To counter the attacks the Republicans are trying to scare America into believing that Medicare is going broke, and that they have the only plan that can save it. And they do ... if you prefer underfunded vouchers or underfunded coupon-like credits to go shopping for health insurance.

Under our current Medicare insurance system the federal government directly pays health-care providers. No vouchers. No coupons. No shopping. No hassle.

The GOP plan is a nod to their fairytopian market ideas, and would work something like this. Instead of having the federal government take money that you've paid over the years, and then paying your medical bills when you get old (as it currently does), the Republicans want to give you a voucher, or a coupon, to go shopping in the private sector for your insurance plan.

If your voucher (or coupon) can't cover your insurance needs you pay the difference out of pocket (current estimates suggest you would pay at least $6,000 out of pocket).

If the insurance industry wants to deny your claim, they can do so.

If the insurance company you select wants to deny procedures or kick you out of the system they can do it.

If you have a disease like Alzheimer's and get ripped off because you can't remember critical health information, that's OK with the GOP because that's the way the market is supposed to work.

Caveat emptor!

Paul Krugman has an excellent article describing the shortcomings of the Republican Vouchercare system. It's as direct and succinct a description of the program as you're going to find out there. Take the time and read it.

Vouchercare doesn't deserve to see the light of day.

- Mark

WHY FORECLOSURE IS A LUCRATIVE BUSINESS MODEL

Imagine what would happen if you filed an insurance claim on your $20,000 car after you sold it. Most of us don't do this because it's against the law. Specifically, most of us don't do it because it's morally and ethically wrong. We have a conscience. Not so with our nation's biggest banks. They not only file claims like these, but they do it often. Here's how it works.

The nation’s five largest mortgage companies have been accused of defrauding taxpayers by using defective and faulty documents to file federal reimbursement claims on home mortgages that are backed by the federal government (VA or FHA mortgages, for example). The problem is that these claims are being filed on homes the banks foreclosed on AFTER they sold it for less than the outstanding loan balance.

If it were a car, what the banks are accused of doing with foreclosed homes is akin to filing an insurance claim on a car the bank repossessed AFTER they sold it for less than what the previous owner owed. Instead of taking a hit for making bad loan decisions they're forcing the federal government the American taxpayer to take it on the chin.

Five separate investigations conducted by the Department of Housing and Urban Development examined the activities of Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally. To pursue the case the feds are using the False Claims Act, a Civil War-era law crafted after numerous firms swindled the U.S. government by selling it (and Union soldiers) sub par and defective food, uniforms, and weapons. 

So, why is all of this important? Three reasons.

First, if the banks knew they were going to get their claims paid out by filing false claims to the federal government then the banks had a financial incentive not to hire people to help distressed homeowners modify their loans (not hiring more staff also saved the industry $40 billion).

Second (and worse), the banks also would have had a financial incentive to file and speed up foreclosures on distressed home owners whose homes were backed by the government. Taxpayer guarantees are easy pickings. Bank of America, it appears, has mastered this practice.

Finally, the key to making all of this market magic work was to find a way to kick people out of their homes en masse, and quickly. Hello, Robo Signing mills ...

There's a reason why the banks want to pay fines for doing all of the above, instead of being forced to negotiate with distressed homeowners. They've made a ton of money, and fines are viewed more as a nuisance tax. With the federal government making guaranteed payouts, and with nifty tools like "net present value" to undermine homeowner interests, foreclosure has become a lucrative business.

Why isn't any of this surprising?

- Mark

THE FALSE PROMISE OF UNBRIDLED CAPITALISM

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While good reviews and course adoptions of my book are heart warming, I'm particularly excited when I learn that other academics who have read my book are writing aggressive op-ed pieces that strengthen or build on the arguments I made in The Myth of the Free Market. The article below - "False Promise of Unbridled Capitalism" - is one of those pieces. It was written by R. Matthew Poteat, Assistant Professor of History, at Central Virginia Community College. It's excellent, and deserves to be circulated widely. Enjoy.
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False promise of unbridled capitalism
Written by R. Matthew Poteat


GOP presidential hopeful Tim Pawlenty is finding out that the road to his party's nomination runs to the right. The far right. Take for example Pawlenty's view on capitalism:

"I'm a market person, but there are certain circumstances where you've got to have government put up the guardrails or bust up entrenched interests before they become too powerful."

This view, however, is no longer acceptable to many GOP voters. These voters believe not only that unbridled capitalism will fix the debt/ deficit crisis, create jobs, and protect American freedoms, it will also fix our schools and hospitals, too. They believe the government should "get out of the way," deregulate the marketplace, slash taxes and spending, and let independent market forces do their job.

The problem is, market objectivity is an illusion. There is no such thing as a truly free market. In a truly free market there would be one-page trade agreements. Trade in child labor, drugs, sex, and weapons would be open. Environmental regulations would not exist. Foreign capital and foreign workers would flow freely across borders.

All markets, therefore, are political and require government intervention. Every market has rules and boundaries that restrict freedom of choice. Yet, faith in free market fundamentalism is today a GOP litmus test. Moreover, to give this view historical weight, its supporters allege that by accepting this orthodoxy America is merely returning to its founding principles.

It may sound good to some, but it's not true.

Take for example the Gilded Age. From about 1877 to 1892, the U.S. economy grew at the fastest rate in its history. Industry boomed and mass transportation and communication networks were built. By the 20th century, U.S. per capita income and industrial production led the world.

Strict free-marketeers point to this period as the golden age of free market American capitalism. Yet, what they ignore is the 50 percent protectionist tariff rate and foreign investment prohibitions that allowed American industry to grow.

As Republican president William McKinley said, "free foreign trade gives our money, our manufactures, and our markets to other nations to the injury of our labor, our tradespeople, and our farmers. Protection keeps money, markets, and manufactures at home for the benefit of our own people." (Alexander Hamilton had suggested this decades earlier).

There are numerous examples of why unbridled free market capitalism doesn't work as well as advertised — especially for developing nations — but let's use a local example: the wild turkey.

By the 20th century, wild turkeys and many other wildlife species were hunted to near extinction. That is until concerned Americans lobbied their government for market regulation. In 1937 Congress passed the Federal Aid in Wildlife Restoration Act, which taxed firearms and other hunting equipment. The revenue was used for conservation programs. From fewer than 30,000 wild turkeys in the 1930s, the population today is over 7 million.

This law, and other regulations like bag limits, hunting seasons, and wildlife refuge areas, has contributed to an enormous growth in the outdoor industry.

According to the Virginia Department of Game and Inland Fisheries "each year in Virginia, hunters spend more than $480 million in trip-related and equipment expenditures and generate $128 million in state and local taxes supporting more than 24,000 jobs in the commonwealth. Hunters also contribute to the Virginia economy in the form of food, lodging, gasoline, dog food, kennel supplies, veterinarian care for hunting dogs,and equipment purchases. Hunting attracts visitors from out-of-state and those visitors spend a lot of money here in that pursuit."

None of that would have been possible without state intervention in the marketplace.

Capitalism is the best and most just economic system invented, but Adam Smith and our founders understood that the invisible hand of the market required state regulation to check greed and corruption. Indeed, a just market cannot operate in a state of nature. Article I sec. 8 of the Constitution, Federalist Papers 10 and 42, and the recent Great Recession make this clear.

The utopia promised by rigid free market capitalism is a myth, and politicians and radio talk show hosts who think otherwise aren't being honest or historically accurate.

R. Matthew Poteat is an assistant professor of history in the Virginia Community College System. Email him at rmpoteat@gmail.com
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Click on the link here if you want to read the "Comment" section. As you'll see, Professor Poteat hit a nerve with a few of his neighbors.

- Mark