CANTOR ACKNOWLEDGES GOP FORCED SEQUESTRATION (which is part of larger GOP strategy)

From The New Yorker we learn that Eric Cantor finally acknowledged that he and Paul Ryan blew up the Grand Bargain in 2011. Both he and Ryan convinced Speaker John Boehner to walk away from a budget deal. The agreement included a combination of tax hikes and spending cuts while the GOP's proposal focused on gutting Obamacare, paring back social programs, and more tax breaks for the rich. 

The president, in turn, told the Republicans that they would make their case and let the voters decide in 2012. The GOP agreed. President Obama proposed sequestration as a way of avoiding the fiscal cliff in 2011. Guess what? The voters decided that they liked President Obama's plan better. 

This week the GOP decided to go off the cliff anyways. Nice. 

In a few words, we're now facing mandatory cuts because the GOP isn't getting their way. They are throwing a political tantrum. And for what? The president is a big spender, according to the GOP. The evidence suggests otherwise.  

Let's take a look.

Big Spender?
In my last article to the Bakersfield Californian I was taken to task for my interpretation of new spending by people who don't understand charts, written nuance, and, apparently, basic math. I got the usual Fox-inspired comments that, once again, made it clear that there's an entire group of people who don't care to do their homework, and who believe whatever our nation's shiny spoon, Fox News, tells them to believe. 

What my critics can't seem to wrap their head(s) around is what new federal spending means. So I explained in another post that new federal spending refers to what President Obama puts on the books. It's what the president proposes and gets to spend. 

What President Obama had on his desk when he walked into the Oval Office, like the built-in trillion dollar deficits, is another matter. I then wrote that blaming President Obama for the built in budget deficits is akin to congratulating the man who marries the woman who is already pregnant from her previous boyfriend. 

Understanding this distinction is important for two reasons. 

First, while our total national debt continues to climb because of the credit card spending binge by the previous administration "new" spending on the nation's credit card has, comparatively speaking, stalled. The smarter readers of this blog will find this point repetitive (you know who you are). But keep in mind some people need to have this point repeated.  

Second, if we understand the distinction between what was left on the president's desk and "new" spending it should help everyone understand that all the hoopla over the mandatory spending cuts (sequestration) that was supposedly made necessary by President Obama's "out of control" spending was always a manufactured story. It was always a smoke and mirrors sideshow designed to bring us where we are today. 

And the GOP has worked diligently to make it happen. 

But first, let's check out the numbers. 

U.S. Deficits Shrinking at Fastest Pace Since the Great Depression
Because new spending under President Obama has dropped to its lowest level since President Eisenhower, over the past 3 years - and for the first time since 1937 - our nation's budget deficits declined as a percentage of GDP. What this means is that the size of our annual budget deficit today is lower than when President Obama entered office.

Need the actual numbers? OK. 

From fiscal 2009 through fiscal 2012 the deficit shrank 3.1% (from 10.1% to 7.0% of GDP). The only other times the deficit has fallen faster was during the military demobilization years following WWII and during the Great Depression (1937). Check out this chart from Investor's Business Daily ...

What all this means is that the GOP - with the help of their shrill media pieces - have manufactured the deficit-budget crisis by refusing to work with the president. This is part of a larger obstructionist strategy that was concocted on inauguration night 2009, as Robert Draper outlined in his book, Do Not Ask What Good We Do. 

If we understand that President Obama is simply the foster parent of a larger debt problem he took on, and that the GOP was always going to say No to President Obama, it makes much easier to embrace the following: The leadership of GOP was always inclinded to walk away from the deal John Boehner had with President Obama in August 2011. And they did (article with audio here). 

Simply put, they needed to create a budget crisis that they could dump on President Obama's lap. It's the only way they could get the American public to forget it was their guy and their policies that put us in this economic mess in the first place.

For those inclined to counter that the Democrats controlled the Senate in 2009 and the GOP-led House passed budget legislation while the Senate has not, I have one thing to say: Learn more about poison pill legislation, continuing resolutions, filibuster politics, and what it meant to have people like Joe Lieberman and Ben Nelson on the Democratic side. 

But one thing is certain. Because they couldn't get the president to sign off on the same policies that brought us the 2008 market collapse and trillion dollar deficits, Reps. Cantor and Ryan decided to force Speaker Boehner to walk away from his deal in 2011. This is what led President Obama to propose sequestration. 

The GOP has always wanted this mess. 

- Mark 

IF YOU CAN'T BEAT THEM, LIE

This article from the LA Times' Michael Hiltzik is one of the best essays to explain why the deficit hawks aren't really deficit hawks. They're simply using deficits and other red herring arguments to gut programs they don't like. Why? Because the programs - like social security and Medicare - are not only popular but they undermine their utopian world view that that government doesn't work.

Worse, the continued success of social security and Medicare blows up their argument that only market players in the financial, health care, and insurance industries can adequately provide America's retirement and health needs.

As an example, Hiltzik looks at the notion that social security and Medicare amount to little more than "generational theft." Robbing our children of money to pay for old age programs is their tug at your heart argument. Hiltzik correctly points out that the deficit hawks arguments here are wrong on the numbers and an outright sham.

Their position, which is led by the Republican Party, has everything to do with their inability to discredit the services and popularity of these programs. So they have to argue that the programs are uncontrollable, ungovernable, and therefore undesirable.

Read the article. It's a good one.

- Mark

THIS IS WHAT ILLITERACY AND IGNORANCE LOOK LIKE

"The person who reads 

and doesn't understand 

is no better off than the 

person who can't."

I can't remember where I first heard this, but it rings true the more I read the responses to the things I write. Specifically, I'm convinced that illiteracy goes far beyond the inability to read, and also applies to one's inability to understand simple graphs, charts, and written nuance.

This Monday my article "All hail the Gop's Stunning sequestration chutzpah" appeared in our local paper, the Bakersfield Californian. Among the points that I made, two of the most prominent are that: (1) President Obama inherited trillion dollar deficits as far as the eye could see and that; (2) new federal spending under President Obama has actually gone down. I also provided a chart with information drawn from the Congressional Budget Office to make my point on new spending (information that originally appeared in the Wall Street Journal's Moneywatch, which is reposted here).

So, what do I see in the on-line comment section of the Bakersfield Californian?

... Obama has outspent any other US president (by far), has increased the amount of Americans in Poverty and increased the number of Americans on government assistance to 128 Million. Obama refuses to stop spending money he doesn't have; he wants to collapse the Dollar. He wants all Americans dependent on the government. Part of his socialism push.

Besides going off track, the on-line writer - and others, as we shall see - completely ignored or missed what I said in my op-ed. Or, and this seems more probable, the on-line writer (he calls himself "giwillikers") simply doesn't understand what he reads.

Look, in very simple terms I was referring to NEW spending by administration. In fact, I wrote "new" spending  twice in the article. The term "annualized growth of federal spending" is also in the accompanying chart (I know, a bit tough for some, but this is supposed to be the editorial page).

So, in real simple terms, NEW federal spending refers to what President Obama is responsible for putting on the books. It's what the president proposes and gets to spend. What President Obama had on his desk when he walked into the Oval Office (the built-in deficits) is another matter.

So, let me make it simpler for all those who read at the same level as my on-line friend ...

Blaming President Obama for total spending levels today is like congratulating the man who marries the girl who's already pregnant from her previous boyfriend.

The fact that Congress fails to do anything about the budget mess every year is akin to the old boyfriend sneaking back into the house of his former girlfriend (annually).

Too blunt? Well, when people don't understand nuance or the finer points of the written word blunt is necessary.

The reason I didn't make this point in the article I submitted to the Californian is because of space limitations. You only get so many words. But most importantly I'm assuming that the people who read and respond to the Californian's editorial pages can read for nuance.

Apparently, I was wrong.

All of this wouldn't be so bad, except for one thing: I have a colleague (outside of my department, mind you) who can't seem to read for nuance either. Here's the link to his Letter to the Editor. In a few words, he's made the same mistake that my on-line friend did, and he's a statistician to boot.

But wait, it gets worse.

To make his point, my colleague invented an entirely new category - spending as a percentage of GDP - that I never made reference to in my article. I discussed NEW spending. My colleague would've known this if he understood nuance, or even paid attention to what was presented in the accompanying chart where, incredibly enough, it says "annualized growth of federal spending" (something a supposed veteran reader and student of statistics should be able to interpret).

To my colleague - who you can find by clicking here - all I can say is seek help ...

I could go on but would rather finish with this. Last week I posted this article on my blog. It's one of those run of the mill surveys. It says Bakersfield is the least literate city in America (yes, we're #1). I posted it because I found it amusing.

Then I started reading the responses to my op-ed.

They breathe life into Bakersfield's literacy ranking.

Worse, they make it clear that the person who reads and doesn't understand is really no better off than the person who can't.

- Mark

DYING TO GET IN (PRISON)

From The Atlantic Monthly ...

This is a story of the man who deliberately committed a crime (he stole skin cream) to go back into prison for surgery that he needed. It's written by the medical doctor who performed the surgery. It raises some serious questions about our health care system. While the person of interest (the patient) in the story is not the nicest guy the author forces us to ask questions about our economic system and how our bankruptcy laws don't take into account the families who have to make the decision between giving up everything they've worked for during their life in order to keep someone alive.

This is especially the case when we find that America has the most expensive system in the world, but doesn't provide the same level of outcome as the costs might suggest we should have.

- Mark 

THE GOP's SEQUESTRATON CHUTZPAH

After posting this sequestration piece on my blog I decided it needed more context. So I rewrote it and incorporated this post on Marco Rubios' State of the Union response, and sent it off to The Bakersfield Californian. This appeared in the Californian this morning. Enjoy ...

_____________________________________________________

Sunday, Feb 24 2013 11:00 PM

MARK MARTINEZ: All hail the GOP's stunning sequestration chutzpah

Chutzpah. It's a term best understood as a blind arrogance that pushes the kid who killed his parents to ask the court for leniency because he's now an orphan. One element of this is when people try to change story lines or shift blame so others will ignore their role in creating a mess of things.

The Republicans' attempt to change the story line on the budget, and then shift blame onto President Barack Obama for our looming sequestration deadline is a classic case of chutzpah.

If you're catching up, sequestration is part of the Budget Control Act of 2011 that mandates across the board spending cuts in defense, health and other areas. After missing established deadlines, we're now waiting for the hatchet to fall on March 1.

According to the GOP -- and if we're to believe Sen. Marco Rubio's State of the Union response -- we're at this point because Obama is an irresponsible big spender who only wants to make government bigger. Worse, the president has refused to work with the Republicans, so they argue that their only option was to accept the president's sequestration proposal. All in the name of fiscal discipline, of course.

Comparing the rhetoric to the real world makes it clear that blaming the president for the sequestration mess might actually take chutzpah to another level. Let's take a look.

If you watched Rubio's State of the Union response, you couldn't be blamed for believing that Obama was the second coming of Lenin. Rubio painted a scary picture of a big government socialist monster in the White House. He has a problem though. If we follow his logic, and Obama is Lenin, that makes Presidents Ronald Reagan and George W. Bush outright Marxists; new spending under both grew three times the rate under Obama.

Simply put, new federal spending under Obama has risen at its slowest pace since Dwight Eisenhower was president. Remove the recession-induced stimulus spending (left on the president's desk) and new spending under Obama almost grinds to a halt.

But wait. There's more. The size of our federal workforce isn't growing either.

The ratio of federal workers to our civilian population has gone down under Obama. In fact, not only does Obama beat Reagan and Bush II in this area, but we need to go all the way back to President Lyndon B. Johnson to find the same ratio of federal workers to civilians that we see today.

Put more simply, the spending spree the GOP is hammering Obama about -- and is using to refuse to negotiate with him -- never happened.

So why blame Obama for growing government if it's not true? Simple: The GOP wants America to forget that President Obama was handed built-in trillion-dollar deficits as far as the eye could see and a toxic economy. The GOP needs a (false) narrative to go along with their larger "just say no" strategy.

"In Do Not Ask What Good We Do," author Robert Draper explains how GOP leaders got together on inauguration night 2009. They pledged to sabotage Obama's agenda by showing "united and unyielding opposition to the president's economic policies." That night, Newt Gingrich even boasted that sabotaging the president would sow the electoral "seeds of 2012." From there the "Party of No" was born.

It's worth noting that during their only debate, congressional candidate Terry Phillips even reminded Rep. Kevin McCarthy about this meeting (which McCarthy attended) only to have him effectively ignore the issue when asked if Draper was telling the truth.

So, here we are, days before falling off yet another fiscal cliff. We have to ask why we're here. The president inherited built-in trillion-dollar deficits. GOP claims about Obama's big spending and growing government aren't true. And the GOP never had any intention of working with Obama. (Forget the Democrats' Senate majority in 2009. I'll just say get a high school student to explain "filibuster" and then have them explain what Joe Lieberman, Ben Nelson, et al., meant to the Democratic team.)

But let's be clear here. We wouldn't have this sequestration mess if the GOP hadn't threatened to blow up the economy in 2011 over a false narrative, and then voted overwhelmingly for sequestration (which both Rep. Paul Ryan and House Speaker John Boehner wanted and praised).

Yet the GOP wants to blame the president for the sequestration mess. Chutzpah indeed.

Mark A. Martinez, Ph.D., is the author of "The Myth of the Free Market" and professor of political science at CSU Bakersfield.

_____________________________________________

- Mark

UPDATE: Several people wrote in to our local paper to correct my math. Too funny. Click here for my response to the ignorance and illiteracy that exists all around us.

INTERESTING DISCUSSION TOPICS (for the weekend)

In my new effort to post things that catch my attention, or make me go hmmm, below are a few clips and articles that get me thinking about ideas to write about but I never find the time to act on.

* The Republican Party, then and now. Wow.

* Check this out for a look at what unhinged NRA paranoia looks like ... then break out the tin foil hats.

* Speaking of tin foil hats, take a look at this unhinged immigration stupidity. The comments would be amusing if they weren't so serious. Really ugly.

* Republicans and right wing pundits are complaining - with no supporting evidence (again) - that raising the minimum wage from $7.00 to $9.00 an hour will harm the economy. Check out this "facts and myths" site for a long list of studies that will help you understand the minimum wage debate.

* Proving that they really don't have a clue about modern economics, here's Fox News downplaying the impact of sequestration (mandatory budget cuts after March 1).

* What happens when you don't actually choose to purchase a service (like emergency health care), or pick where you will consume your product (a heart attack will determine this for you)? Time Magazine does an excellent job of explaining why there is no free market when it comes to health care.

And in the Orwellian WTF Category we have this ...

- Mark 

BAKERSFIELD ... WE'RE #1, WE'RE #1

It seems like these kind of reports on one  topic or another pop up every other year. This year? Bakersfield is the least literate city in the nation. Here's the original link, supporting data (thanks Tom) and, for those unfamiliar with the region, a map of the state ...

- Mark

THE BANKERS BALL CONTINUES ... THEIR PRIVILEGED POSITION MAKES THEM TOO BIG TO JAIL

A few years back I wrote about the special exemptions that privileged groups had in Latin America before its independence from Spain in 1810.  As I wrote then, these exemptions of privilege were called fueros, and were granted to members of the nobility (pre-independence), the clergy, certain government officials, and the military.

These privileged exemptions, as you can imagine, contributed to a culture of impunity and established a history of hierarchy and status. Apart from enabling the elites of Latin America to live a life of privilege and, in many cases, charmed luxury these privileges did much to skew Latin America's economic development on many levels. 

I then discussed how a Morgan Stanley wealth manager - in fuero-like fashion - was given the option of not facing felony charges for a hit-and-run case in Colorado because prosecutors didn't want him to face a career backlash (that would inhibit his ability to pay restitution). The fund manager, Martin Erzinger, struck a cyclist while driving, and - in spite of the wishes of the injured cyclist - was allowed to plead guilty to misdemeanor charges. 

Fast forward to 2013 and we get Matt Taibbi's most recent piece on our dysfunctional financial system from Rolling Stone magazine. In fuero-like fashion Taibbi writes of a banking system that has become "Too big to jail." Taibbi makes it abundantly clear that "gangster bankers" in America enjoy an emerging fuero financiero in America because of their extortion-like capability (threat?) to bring down the entire economy if they are punished according to their crimes. 

Here's U.S. Assistant Attorney Lanny Breur explaining why he refused to pursue criminal charges against banking giant HSBC:

“HSBC would almost certainly have lost its banking license in the U.S., the future of the institution would have been under threat and the entire banking system would have been destabilized."

Sounds like too big to jail to me. Breur didn't want the bank to lose its banking license, with the now standard threat of collapsing our financial system. So he fined them $1.9 billion (or about 5 weeks of HSBC profits). Not only is no one at HSBC punished for catering to drug dealers and terrorists, but HSBC will probably find a way to write off the fine as a business expense. 

Then we have Bank of America gaming the system to prevent investigations into their predatory and negligent foreclosure practices, for which they paid $1.2 billion in fines (part of a larger $8.5 billion settlement). Sigh ...

There's more, but you get the point. The special exemptions are so strong for the big banks that they are literally having a financial ball, at our expense. Call it the Bankers Ball.

As I've pointed out over and over, the arrogance and greed of the industry is going to collapse the economy some time down the road. Banks are neither following the most basic rules of capitalist markets, and are aided by favorable legislation that props up their bottom line but is killing America's middle class. The privileges and immunities they now have will only speed up the next market meltdown. 

We need to start prosecuting the criminality as it happens. 

That we are not prosecuting the banks, and the bankers who sign off on the illegality, tells the world that the banks have become a privileged class in America. Worse, they have become too big to jail, or even take to court.

- Mark 

CONGRESSMAN McCARTHY'S SEQUESTRATION CHUTZPAH

Some time ago our local Congressman Kevin McCarthy (R-Bakersfield) decided to remove me from his message list on Facebook. I can't say that I blame him. I would regularly let him know where he was wrong, and wrote many times that the political game the GOP is playing is pretty obvious. He especially didn't like me calling him on the GOP's "Just Say No to the President" strategy.

We're still "friends" (I think), but we're not good enough friends for him to let me know what he's thinking. The spririt of democracy lives strong in our congressional district ;-).

Anyways, although I haven't been there in months I decided to take a look at Rep. McCarthy's site. What do I find? This passage from Bob Woodward's book, The Price of Politics ...

Yeah, Rep. McCarthy is trying to blame President Obama for the looming sequestration deadline, which mandates automatic spending cuts if a budget deal isn't reached by March 1, 2013.

Why is Rep. McCarthy pointing to this passage from Woodward's book? Because the GOP knows the results of sequestration could be devastating to the economy. So he's trying to set the tone for the next news cycle: "Obama to blame for ruining the economy" (or something like that). This strategy has been in the works for some time now (more on this below). 

Citing senior Obama advisors - Rob Nabors and Jack Lew - as the source of the sequestration idea is McCarthy's way of finding scapegoats on an issue that the GOP has wanted for some time now. The reality is the Republicans have not only refused to consider President Obama's budget proposals - which include tax hikes on America's wealthiest population - but Rep. Paul Ryan even praised sequestration as a way to impose automatic spending cuts that the GOP wanted all along. 

Now the GOP wants to blame President for sequestration in spite of the fact that they have steadfastly refused to consider his policy proposals, and then voted for a sequestration bill they wanted all along. This takes some real chutzpah. 

Chutzpah, for those of you unfamiliar with the term, is best explained as a blind arrogance that pushes the kid who killed his parents to ask the court for leniency because he's now an orphan. The GOP's chutzpah on the sequestration issue is especially appropriate since the GOP's strategy since President Obama entered office in 2009 has been to say no to every major policy initiative from the White House and then blame the president for not fixing the economic mess left by his predecessor. 

This is a key point made in Robert Draper's book, Do Not Ask What Good We Do. 

In his book Draper outlined how Rep. McCarthy met with his GOP colleagues the night of President Obama's 2009 inauguration and pledged to sabotage President Obama's agenda by demonstrating "united and unyielding opposition to the president's economic policies" (which I discuss here, here, here, here and here). 

That night Newt Gingrich even suggested sabotaging the president would sow the electoral “seeds of 2012” (a claim Gingrich has not denied). From there the Party of No was born, with Kevin McCarthy at the helm (the strategy continues, as Newt Gingrich explained this morning).

So this is what we have. President Obama wanted congressional Republicans to work with him to fix our wrecked economy in 2009 (which includes tax hikes on those who did fabulously well after helping to crash the economy in 2008). But Congressman McCarthy and his GOP colleagues preferred to sabotage the economy to create a crisis-like atmosphere that they desperately want to pin on President Obama. After making it clear that they would not help President Obama fix the economy the GOP then accepted and voted for sequestration (August of 2011) with the goal of pinning the outcome on the White House.

With the sequestration deadline of March 1, 2013 around the corner congressional Republicans are refusing to entertain President Obama's budget proposals, again. You might think that they would budge a little since President Obama convincingly won re-election, with a mandate to raise taxes on America's richest class. Think again.

Let me leave you with this question. Which is worse? Proposing a sequestration plan that the GOP worked for, and wanted in the first place, or proposing a plan that undermines a newly elected President and places the interests of a political party above country? 

- Mark 

WE'RE NOT THE GREATEST COUNTRY IN THE WORLD

When discussing how dysfunctional our political system has become in my American Politics class this opening scene from HBO's Newsroom helps set the tone. The theme? We're not not the greatest country in the world.

The short version ...

A few more minutes ...

- Mark