Monday, August 1, 2011

Banana Republicans

I cannot express how depressing the "debt ceiling" deal is.

Not because of the substance.

We knew the wingnuts were going to kill the hostage. We knew that Obama would cave rather than let his financial interest cronies take a bath when Standard & Poors downgraded U.S. bonds. We pretty much knew how this was going to play out because we've watched Obama and the Teatards play this game for the past couple of years. The Nobel-Prize-Winner-In-Chief would make some good speeches, there would be some posturing and scuffling, like third-graders in a playground, and then the GOP would man up and Obama would roll on his back like a Gresham hootchie mama with six mojitos in her in a waterfront bar on Fleet Week.

No, the depressing part is that process has exposed us as the banana republic we are.

"Banana republic" is defined in Wiki as "...a pejorative term that refers to a politically unstable country dependent upon limited primary productions (e.g. bananas), and ruled by a small, self-elected, wealthy, corrupt politico-economic plutocracy or oligarchy"

Accepting that we at least are not yet dependent on bananas - although video entertainment may be the New Yellow - but the rest seems to fit us pretty well. The bulk of the nation doesn't want the "shared sacrifice" to be shared between those making $7,000 a year and those making $70,000. The majority of U.S. citizens doesn't want to face an uncertain future without reliable food inspections, safe bridges, clean air and water, and some hope of dying outside of poverty and desperation.

But the GOP minority and the oligarchs who love them would accept all that and more rather than accept taxes on those oligarchs. And, to echo the Rude Pundit, the thing I keep coming back to is that through all this the wars continue. That we prefer war to roads and health care and education here is unfathomably depressing.

Well, I give up. It appears that the U.S. is going to get the squalid little dictatorship of the conservatives it seems to either want, or not care about. So I'm going to open my campaign for the GOP in 2012 with the slogan "Vote Republican; Let's Just Get It The Fuck Over With". Let's elect all these batshit fuckers and open the cage doors and let them rampage amongst the populace, flinging their teabag monkey shit, hooting and leaping, tearing down the remnants of the New Deal.

A New Deal, let's not forget, that wasn't built from a cloud of eleemosynary fluffiness of FDR but from that cold-hearted old patrician's savage political calculation that his own class had to pay up in order to prevent a destitute and despairing U.S. public from making the choice that the Russian people had in 1917, the Italian in 1922, and the Spanish and German people would in years to come; the choice between the freedom to starve and want and be forced to fight, and the peace-work-and-bread slavery of fascism or communism.

Well, all right, let's have it, then.

Perhaps when enough people have watched their parents sink into destitution, when we have returned to Gilded Age levels of inequality, to Hoovervilles and bread lines, when the gated communities of the few stand like proud beacons above the decaying suburbs of the many...perhaps then the two-thirds of those in this country who describe themselves as "conservative" or "moderate" will see what their moderation and conservatism has brought them.I only hope that I am long dead by then.

(Cross-posted to GFT)


  1. You know, the curious thing about Obama is that he doesn't even seem to want to be kissed while he's being fucked. He's turned out to be a slender reed to lean on against the Visigoths. So much for all the dancing in the streets three short years ago.

    It'd be nice to see a primary challenge, but the unfortunate reality is that the one thing Obama hasn't fucked up is in raking in money from the fat cats. Obama will be the guy driving the train into oblivion, although he'll actually be a passenger, given his passive ways.

    When historians write about this time in America, some will be perplexed by the weird way in which so many people of limited means and abilities somehow identified themselves with plutocrats who wouldn't piss on them if they were on fire. But if they know the history of the U.S., they will realize that it was asking too much of too many Americans to cooperate with a black man named "Barack." Especially when that black man was so afraid of being termed "angry," that he became a great compromiser when the times called for a great leader.

  2. What I fundamentally don't understand is how the oligarchs get so many people to vote against their own interests, over and over again.

    I mean, I can clearly see and hear it happening, but I can't understand it.

    To me, basic government policy is a no-brainer. Give me and mine decent education and healthcare, regulate things fairly and tax everyone (especially those richer than me) to pay for it. But no, significantly large portions of the voting populace demand that rich guys get richer and poor folk (especially those people poorer than them) get shafted.

    How can this me maintained?

  3. FDChief - "...perhaps then the two-thirds of those in this country who describe themselves as "conservative" or "moderate" will see what their moderation and conservatism has brought them."

    Won't work Chief. The blame will be placed someplace else - you know where. And the propaganda machine of the right wing is powerful enough, better than Reich Minister G's organization. The brainwashed are already screaming that the Dems and Obama tried to cut off their Social Security and Medicare but those programs were saved by a benevolent Tea Party faction in the House.

  4. The thing that gets me is how these dumb fuckers seem to think that all these social programs were put there to help Negroes have crack babies.

    Our superb ignorance of history makes it impossible for us to peer far enough back down the memory hole to remember when we worked for rapacious robber barons who shiked us every chance they got, hired goons and Pinkertons to shoot us down when we struck for wages or decent working conditions or company houses that didn't fall down or company stores that didn't rob us blind, who routinely tanked the economy (they were called "panics" back in the day), who dumped their toxic shit in our rivers and into our sky, who fed us diseased meat and rotten vegetables, and then sold up penny papers telling us what a Great Democracy we lived in.

    Do these fools think these bastards stopped BEING bastards out of the goodness of their hearts? That they stopped grinding putrid meat into our hamburgers because they decided it was wrong, or dumping toxins into our drinking water because they wanted to be nice?

    We've lived so fat and happy in our little government-inspected, FDIC-insured, patent-regulated, engineer-designed Middle Class World that we've flat out forgotten those vulpine fuckers are still there, and are licking their fangs at the thought that the U.S. government will no longer be capable of even the minimal health, safety, and regulatory oversight we've enjoyed until now.

    Likewise the social programs; we've been held up for so long by the safety net that we've forgotten how dark and deep the REAL bottom is...and how hard the landing at the bottom can be. We seem to think because it's been three or four generations since a quarter of all Americans were poor - REALLY poor, rickets poor, cholera poor, hookworm-and-pellagra poor, tarpaper-shack poor - that that sort of poor can't make a comeback...

    Henh. A part of me is going to have a cynical laugh from my family's dry spot under the Burnside Bridge as the sorry parade of raggedy-ass teabaggers shuffles by to get their soup and crackers from the Salvation Army while cursing the Damn Gummint.

    Christ. What a goddamn ignorant country we are. We're going to get bent over, and we'll deserve every agonizing moment of it.

  5. FDChief: "Vote Republican; Let's Just Get It The Fuck Over With"

    Spot on.

    Why settle for a lingering death then the GOP has a fast track for us?

  6. Chief,

    If you look at the US federal, state and local budgets over the 1/2 century (or even longer), you'll notice that the plutocrats/oligarchs pretty much failed to keep government money from going to the poor and destitute in this country. Unless you believe that some 2/3 of the federal, state and local spending is going to be cut out of existence, then the "hooverville" case doesn't have much merit. To wit:

    Take a look at this chart which shows fed, state and local spending and how big each piece of the pie is for 2010.

    Take a look at the same chart for 1960. Notice the difference?

    Now, take a look at how much was spent on welfare from 1930-2010 on a per capita basis in 2005 dollars.

    Here's the same thing for Education.

    How about Pensions?

    Health care?

    Sensing a trend yet?

    As for the President, what was he supposed to do? Refuse to "cave" and put us off the map into "here be dragons" land?

    This deal isn't actually that bad. The cuts are almost all back-loaded into future years - the cut for next year is....wait for it... a whopping $22 billion, which isn't even a rounding error. All of the cuts beyond that are theoretical since Congress and possibly the President will be different. This Congress can't make a future Congress enact these cuts.

    So what did the President get? He got a deal where the debt ceiling gets raised for a paltry $22 billion and enough time for him and his party to change the political reality next year. Seems to me that's about as good as could be expected considering the tea party faction was perfectly willing to go off the map/shoot the hostage, or whatever metaphor you want to use.

  7. @Andy,

    I'd like to belive but so far, this President and His party have failed to do diddly-squat for us regular folks. In fact, he's been a way better republican president than even W. Please don't expect me to hold my breath while waiting for the Obama miracle to appear. I've been burned enough already.

    @Chief, sadly, neither you nor I will be long dead by the time the new reality settles in with black-hooded, SWAT-team, tasering force. Its a future I wish on no one - especially our kids. Ah, but to change it? That is the rub in our woefully, willfully, propagandized ignorant society.


  8. I think Andy's on to something here. This may have been the best of all possible budget.

    I have been more interested lately in the "why" than the "what" of the budget-making process and, for that matter, the entire history of Obama's presidency.

    So the President wants to have the next couple of years without the debt ceiling pressing against his forehead. This makes sense from every angle.

    But why does he agree to have a 12 person bi-partisan Congressional committee study the issue in public during the Presidential election season? This makes the deficit THE issue for the entire campaign season, and there is plenty of ways this could blow up for the President.

    Furthermore, we've got plenty of experience that suggests that the committee is going to split apart while Obama is on the campaign trail. Is he courting a deficit crisis under the theory that the American public will rally around him? That doesn't sound like a sure bet for a savvy politician.

    Then there's the part that causes immediate budget cuts in Dec 2012 if there is no budget deal. No exceptions, not Defense, not Social Security. Say Obama manages to win the White House but Congress fails to pass a budget deal. His name is going to be mud with all parties of the American people. How would you like to govern under those conditions?

    Obama is a smart man, he's also a very capable campaigner who tamed the Kennedy wing of the Democratic party and allied with the Clintons to rise to power, no small trick. This, combined with his history in Chicago, suggests he's a shrewd negotiator. So what turned Candidate Obama into President Obama?

    At first I thought he was being conditioned to the Washington point of view, then I thought he had too many ex-Bushies in his administration that were coloring his view of the facts. Now I think he's playing a different game altogether and oddly enough it was the Republicans who pointed it out to me.

    Obama puts forward as little legislation as possible. He prefers to have Congress initiate legislation while he stands back and offers suggestions. This is the way that Congress is supposed to work. It isn't supposed to wait for the President to send it finished bills and then tack on its own suggestions.

    This budget deal makes particular sense when viewed in that light. Every move Congress makes during the budget debate will be against the backdrop of a ticking clock with the media watching and commenting like it was the Super Bowl. I suspect that the President is hoping to finally get the lethargic US population into the game as well.

    From this point of view, the President has probably made the best deal of his life. And he’s betting his political life on it.

  9. Now because, I’m too dumb to stop, I’d like to address a different topic. The US is at the very end of its run as a super power (militarily, policy-wise, and economically). We’ve got a population that is poorly educated for an industrialized nation. Furthermore, the best educated members and wealthiest members of the workforce will, by and large, be retiring in the next decade.

    The unemployment rate officially stands at 9.2% but that number, while high, does not convey the whole truth. Only 58% of working age Americans have a job. The rest are students, disabled, or fell off the employment roles. The workforce is increasing at a pace of about 1.25 million people per month. Employment is increasing at far smaller rate.

    Businesses increasingly view this country as a giant Japan; wealthy in assets but stuck in the mud and unable to make profit margins worth further investment. So investment money floods into Russia (they’ll be sorry!), China, Brazil, India, South Africa, Turkey, and even Israel.

    The American public is largely still awash in debt and a lot of us aren’t even sure who owns our homes because of the foreclosure crisis.

    During the good years we were the beneficiaries of a large number of valuable progressive ideas, such as the New Deal, Social Security, and the Food and Drug Administration. The question I hate to bring before the group but feel I must is this: Can we afford all of these old but good ideas? If not, which ones are more disposable than others?

  10. Can we afford in dollars involved in having, or social costs in not having?

    Let's phase out Social Security, replacing it with allowing people to put 10% of their earnings into an IRA style tax deferred annuity. Look at the lower 40% of the population and compute what they will have at age 65 or 70 to live on. Possibly 7 years at poverty level, baring any market drop. Can our society deal with 40% of the aged scraping by like that? One can cite GWB's dream of an "Ownership Society", but people with nothing to begin with will end up with nothing.

    So, what are our societal objectives, not our budgetary objectives. Can we afford the societal costs of not providing a "safety net" such as Social Security?

  11. RP,

    I never bought into the campaign promises or the expectations foisted upon candidate Obama. A lot of people seemed to think we were voting for a king, or a dictator in the Roman sense, one who could fix all our problems. I read a theory recently that people imagine the Presidency like an episode of the West Wing where a stirring speech shames the other side into compliance.

    The problem, of course, is that the office of the President doesn't have a lot of direct power over domestic affairs and the opposition isn't moved much by rhetoric, so it's not much of a surprise to me that reality did not meet expectations.

    Personally I think his biggest mistake was using his new-President agenda-setting mandate to focus the Congress on health care instead of the economy. Of course I say that with the benefit of hindsight since health care was and remains a critical problem in this country that needs addressing sooner rather than later. They spent a year on that fight all the while saying the economy was on the road to recovery. We know now the administration projections about the economy were not just wrong, but were not even close. Liberals are pissed off at Obama "caving" but one of the reasons he's in the position he's in is because opted to put health care first since that was the top priority of the liberal base.


    The American public is largely still awash in debt and a lot of us aren’t even sure who owns our homes because of the foreclosure crisis.

    You may find this post interesting. I think we're in new territory as far as recessions go. To me we are looking more like Japan all the time.


    I think you present a false choice - there are more options than dismantling SS and replacing it with a 401k vs continuing the status quo. Entitlements have to be reformed - and they will be one way or another - but they don't need to be eliminated.

    As for our societal objectives vs budgetary objectives, our current path is simply unsustainable. The American people are willing to pay for entitlements but, as I point out endlessly here, they will not and cannot indefinitely fund programs that are growing completely out of step with the rest of the economy. As I've mentioned before I place a lot of the blame for this state of affairs on the boomer generation who, as a cohort, like government services but lack the societal sense of obligation that previous generations had.

    BTW, Al, have you seen the DoD powerpoint briefing going around about potentially eliminating military retirement and replacing it with a 401k system? Unless we get our collective shit together and seriously reform these legacy entitlements in order to make them sustainable, they are going to collapse under their own weight.

  12. Andy: Your information is quite right; about 1960 we started down the road we're on right now.

    But here's the thing; up UNTIL 1960 about 25% of the U.S. was poor. REALLY poor; dirt-poor, malnutrition-poor, hookworm-poor, shotgun-shack-poor. The Great Society programs really did WORK. They pulled us up to the point where we've been at about a 10% poverty level ever since.

    And one of the big reasons for doing this is that it's damn hard to run a genuine "democracy" when a quarter of your public is in desperate straits. It's interesting to note that our great experiment in genuinely "popular" democracy occurred during the same time you identify as these programs expanding. Nobody's going to be investing too much time in government when they're trying to beat the rent collector. As far as expanding democracy goes, these programs are actually a pretty good deal for the dollars.

    Unfortunately - and I think you know this - the likelihood of actually trying to figure out who "needs" these programs ain't gonna happen. So they're gonna get hacked away at and the possibility that, combined with the long-term unemployment we're going to see as we slide into a Japanese-style "lost decade", we're going to see a return of Hoovervilles isn't all that ridiculous. We seem to think that just because that depth of poverty has gone away for three generations that it just can't return. I think we're going to find that it can, and will.


  13. (con't from above)


    Even assuming we "reform" these entitlement programs (and let's not kid ourselves - "reform" means "kicking the poor bastards on top of the heap off" - which means that people who right now are living the lucky-ducky life of the working poor are going to get poorer, and sicker, and less capable of functioning as citizens, which, I'm told, is not a good thing for a "democracy") we're not going to get a hell of a lot of savings there. The tradeoffs are going to surprise us, I think. For everyone who gets their Medicare yanked half will wind up in the ER slamming your and my insurance premiums. For everyone who gets kicked off AFDC half will end up in detox, jail, or a hospital ward, doing the same thing to our state and county taxes.

    So the most likely places these cuts will fall is on the already-pretty-meager non-entitlement "discretionary" spending.

    Which means fewer meat inspectors, bridge inspectors, financial regulators, IRS auditors, motor carrier enforcement...get the picture?

    Now for those of you who haven't been there...this is Egypt. Or Panama. Or Thailand.

    The wealthy will do just fine. But for those of us who AREN'T? Welcome to the wonderful world of salmonella, potholes, nightclub fires, bribes paid to all sorts of inspectors...

    The things is, Andy, on a relative scale, we really ARE undertaxed, especially at the higher income brackets. And if we would design our tax and tariff codes so as to discourage offshoring and the general dismantling of our domestic employment picture I think we'd find ourselves capable of bumbling along as a First World nation for some time. I think that all of this bloviating about deficits in the middle of the worst depression since the 1930s is ridiculous - if Dubya hadn't emptied the piggy bank giving his wealthy pals a reacharound during the last bubble we wouldn't even be having this discussion. This would be fixable, if the Teatards would just accept that fiscal discipline includes revenue as well as spending cuts.

    This deal pushes us further down the rabbit-hole of "We just need to shrink government and everything will be dandy."

    And so it will - if you like Honduras and Myanmar.

    BUT...I think there IS a big problem, and I think it's inescapable, and I think this will help us fall into that hole, and that's that we didn't try to do anything about our domestic economy - we let it slide into a financial-and-consumer-dominated McJobs economy - and there's no sign of what comes next. I think the Great Recession is the handwriting on the wall. The "private sector" is finding that they can get along just fine without hiring. And I think we're looking at a sustained level of unemployment we have never seen before. And that WILL explode the entitlement structure.

    And I have NO idea how to escape, or prevent that.

  14. Let me make this even more direct; if you make the reasonable assumption that the cuts going forward will mostly exempt entitlement programs, the military, and unemployment insurance, that means that something close to a third of the rest of the federal budget is going to get cut.

    It would be nice to fantasize that this consists mostly of subsidies to Archer Daniels Midland and bridges to nowhere, but in point of fact the rest of the budget consists of essentially everything the federal government does that doesn’t involve direct transfer payments or killing foreigners. Given that we’re not living in 1890 any more that’s actually quite a few things that are pretty important: education, science, environmental protection, infrastructure, health and safety, the entire federal legal system, and so on.

    Gone, or reduced to such a meager allotment as to be functionally gone.

    I know that the GOP hates this shit, but I wonder; do the teatards think that meatpacking houses stopped cutting up diseased animals and throwing the bits into hamburger out of the goodness of their hearts? That the people who were forced to take down the signs that said "No dogs or Negroes" became kumbaya-singing hippies?

    A pantsload of the cleaner, safer, less discriminatory world we live came about because the federal government forced people to become safer, cleaner, and less discriminatory. It baffles me why anyone would think that if those nanny-state rules and the people who enforce them went away all those bad old habits wouldn't come back.

  15. Andy-

    There is a big difference between military retirement programs, which are an employment contract, and Social Security, which is a social contract. In 1970, then COL Jack Vessey, a flight school student of mine, said that Nixon's proposed AVF wou become prohibitively expensive from a personnel cost standpoint. Since the AVF, raises have been spread across base pay (upon which pensions are calculated) and allowances, upon which pensions are not calculated. Pre-AVF pay raises were weighted more heavily towards base pay, because base pay was notoriously low. The change to spread it across pay and allowances was specifically to reduce pension liability. But again, military pay and retirement are not social programs, but employment contracts. Change the contract to a 401(k) like program, and you have a legitimate new contract. No argument from me. Since military pay is higher than the going rates for the general cohort, a 401(k) might just provide for a reasonably supportive income at retirement, and the increased government contribution for combat service also offers a "thank you" from society.

    On the other hand, the lower 40% of the wage earning population, for example do not earn what a typical service member earns. They will work a lifetime scrimping along, and I suggest you sit down and look at what they might be able to salt away in a 401(k), and if private employers are going to make a matching contribution, a practice that is on the decline at all firms, no less small businesses. Do we have a social obligation to those who flip our burgers, clean our houses, wash our cars, etc. Or do we ride them hard and put them away wet?

    So please don't use military compensation in answer to my questions about the societal obligation to the least among us. It doesn't hunt.

  16. And, sure enough, like the devil in pantomime, comes the very fucking thing that led FDR to start jacking these social welfare programs out of our precious "job-creating" rich;

    "They descended by the hundreds -- black-shirted, bat-wielding youths chasing down dark-skinned immigrants through the streets of Athens and beating them senseless in an unprecedented show of force by Greece's far-right extremists.

    In Greece, alarm is rising that the twin crises of financial meltdown and soaring illegal immigration are creating the conditions for a right-wing rise -- and the Norway massacre on Monday drove authorities to beef up security.

    The move comes amid spiraling social unrest that has unleashed waves of rioting and vigilante thuggery on the streets of Athens. The U.N.'s refugee agency warns that some Athens neighborhoods have become zones where "fascist groups have established an odd lawless regime."

    "Analysts argue that once-marginalized extremist groups are gaining a foothold in mainstream society for the first time, filling a perceived gap in law enforcement in crime-ridden neighborhoods, and benefiting from a surge in popular anger against the political establishment.

    Since winning a seat on Athens City Council, Nikolaos Michaloliakos, head of the violent far-right group Golden Dawn, has tailored his recent rhetoric to the financial crisis.

    "We are living in an enslaved country, financially and nationally," Michaloliakos, a 54-year-old mathematician, told supporters last month, giving a speech under a statue of Alexander the Great.

    "We have a bankrupt economy and the thieving politicians responsible go unpunished," he said. "How long do they think they can keep lying and fooling the Greek people? Whether they like it or not, the hour of Golden Dawn and nationalist revolution is coming."

    Anyone want to bet that assuming that this "deal" works as planned and tanks the economy that we might not see a similar version arise in our jobless white working class as Central American illegals ace them out of whatever sad minimum wage jobs are left to scrap over?

    Like I said; these programs weren't there to make cuddly crack babies happy and support hootchie mamas. They were originally intended to purchase social peace and they've done a pretty good job.

    IF - and I do say IF - "reform" ends up throwing significant numbers of people into a safety-net-less poverty, I don't see this as an impossible consequence.

  17. Andy: To use a personal example to illustrate what Al is saying; my in-laws.

    My wife's parents are "decent, hard-working" people. He's an auto mechanic, she's a housewife. They've played by the rules all their lives, raised two kids (who are pretty OK - at least enough so's I married one of them...), own the little house the kids grew up in.

    These people live as frugally as you can imagine; no cable TV, no fancy appliances, everything as simple as you can imagine. My wife remembers her father going to the dump and rescuing an old bed frame when she outgrew her toddler bed.

    But...his garage never made much money, either. Enough to keep them and the kids fed, clothed, and housed. But that's all. What little money they managed to put by went...for the water heater when the old one blew up...for my wife's dental bills when she cracked her tooth in high school. They just never could get ahead.

    Right now they own their house and their car free-and-clear. But without Social Security the smallest accident, the tiniest incident...and they won't be able to pay the insurance or the property taxes. He's "self-insured", which means his premiums are sky-high...and so far he's been fairly healthy. If either one gets sick...

    This guy is the perfect candidate to get "reformed" off Social Security. He's got a job...when everything's going right, he doesn't "need" his SS check to make the payments.

    But if anything goes wrong..?

    And keep in mind, this isn't 1890; his eldest daughter lives in a one-bedroom apartment in Cambridge and his younger lives way the hell out in Oregon in a two-bedroom house with a husband and two kids. If Grandma and Grandpa lose the house, who gets to take them in?

    I mean, there are ways of dealing with elder poverty, and until the Thirties American families used them all because they had to. If they have to they can start again...but I'm not sure that you, or many of the GOP that talk about "reforming" SS and Medicare are really thinking about the societal changes that will follow. We aren't the same society we were in 1930, and returning our social programs closer to that time opens a Pandora's Box that may be just as troubling as the implications of continuing these "unsustainable" programs...

  18. Andy - Thanks for the link about the Balance Sheet Recession. It seems to me that a Balance Sheet Recession can also be described as a Depression caught in time by Keynesian economics. I become more and more convinced that while Keynes did a perfect job of describing the problem, his solution is as bad as the problem it is trying to prevent. The flaw in his thinking as FDR, the Japanese, the Euro states, and now Obama have all demonstrated is that democratic governments can't sustain the spending long enough to resolve the crisis and so become caught in time themselves like bugs in amber.

    I have been dabbling with selective default as a way to get out of the crisis reasonably quickly but am not at all happy about potential consequences (I don't THINK anybody would get nuked).

    Chief -
    I also noted the CNN articles on renewed nationalism in Greece, it is one of the very many reasons I cannot believe the current plan will end well. And to be honest, the longer they kick the can down the road the worse the consequences. But everybody knows that, right?

    As usual, Chief, you've written very stirring, well thought-out, well researched posts about why sustaining the current programs is good for America. Honestly, I get your points.

    Which is why I was so regretful in bringing up the question about what of the current system we should bring into our new oligarchical period of government (may it be short and unpleasant for the oligarchs).

    George W started this plunge into oligarchy but Obama has only made it go faster. I'm afraid that we're past the point of no return already and that we should be looking more towards figuring out what the old regime did well and try to get the new regime to keep it. Which they will do only if it benefits them, of course.

    If you were to point out to the oligarchs that they are turning the US into a giant Honduras or Myanmar, they probably be surprised. But when you showed them the statistics, they'd agree with you with a smile and offer to buy you a drink.

    Our oligarchs have so far shown themselves to be self-centered, righteous, backstabbing, short-sighted, and quarrelsome. The current political environment is getting so fractured I kind of wonder if there's going to be an election in 2016.

    I really hated to say this, but it is how I see the current state of affairs and I can't see any benefit in thinking about things that don't have a firm basis in reality.

  19. In Canada, my mom and dad both get old age pension. However, because of tax clawbacks, they don't get any money from their pensions.

    They both complain about it, but not too loudly. You see, they grew up on prairie farms in the great depression / dust bowl.

  20. Oh, there will be an election in 2016, you can be sure of that. But the winner may not be anyone we'd recognize as a normal 20th century candidate.

    There is none more dangerous than someone who used to have a great deal of privilege and then had it taken away. Look at the good Germans in the 30s: they had one of the most advanced (technologically and economically) and prosperous societies on earth, then lost it all. Resentment is not a strong enough term.

    We're no different from the volk. No, we'll have the usual suspects (professional liars, empty suits, reality-show wannabes, egotist tycoons, creepy religionists) but we'll also get an angry, idealistic strongman willing to fight -- fair, legal or otherwise -- for the what he (and it will assuredly be a he) believes in, and the American people, after eight years of milquetoast, will love him for it.

    What will he believe in? Got me, but at a guess: the return of American manufacturing (sky-high tariffs, cancelling trade deals), economic growth and jobs for everyone by any means necessary, and some sort of socialism (under another name) predicated on "national greatness".

    How will he pay for it? Well, ol' Shickelgruber figured out that one can paper over a lot of sins with a good war...

    I think we're entering uncharted territory for our democracy, and I'm afraid that out there in the murk is an edge for us all the sail right off of.

  21. Jeez, I hate being the prophet of doom. I may just be depressed at the moment, so take my mutterings with a grain of salt.

  22. EGrise: "but we'll also get an angry, idealistic strongman willing to fight -- fair, legal or otherwise -- for the what he (and it will assuredly be a he) believes in, and the American people, after eight years of milquetoast, will love him for it."

    Your reasoning seems sound to me EGrise, I can possibly even put a name to your strongman. President Michele Bachman anybody?

  23. Olbermann has a very similar take on the fundamental issues faced by the country.

    The internet is a wonderful place.

  24. Al,

    Whoa, I only brought up the military pension thing as an example of sacred cows that are being considered for slaughter. That's how bad things are getting. Also, military retirement is an employment contract? I must have missed that somewhere among all the enlistments I've done over the years, but that's a subject I honestly don't know a lot about. I thought that military retirement is a benefit which, like social security, can be changed or altered by Congress at any time (ie. the "contract" is not enforceable) and people get the benefit once certain conditions are met - ie. 20 years of service. How is it functionally different from an entitlement? Next year if Congress decides to cut your retirement pay can you sue for breach of contract?

    Do we have a social obligation to those who flip our burgers, clean our houses, wash our cars, etc. Or do we ride them hard and put them away wet?

    Well of course we do. I'll state again that I think you're presenting a false dilemma and employing a version of the "Washington monument syndrome" where any talk of reform or even cuts is answered with a worst-case scenario and you seem to be implying that my support for reform means that I want to ride the poor hard and wet. That's not remotely the case. The simple fact is that what is unsustainable cannot, by definition, be sustained. If one chooses to ignore that then the poor are going to end up getting screwed even worse. These programs are going to change, the only question is when and how. Personally, I would like to reform them sooner rather than later for reasons which should be obvious - the longer we wait, the harder and more stark the choices will be. Insisting against all logic and math that we simply need to double down on the status quo is the real dog that won't hunt and is more likely to see people end up on the streets than implementing reforms while these programs are still reformable.

    They will work a lifetime scrimping along, and I suggest you sit down and look at what they might be able to salt away in a 401(k), and if private employers are going to make a matching contribution, a practice that is on the decline at all firms, no less small businesses.

    Before the 401k a lot of businesses offered jack squat, so it's an improvement in my book. And there is social security as the base level of retirement - which I do support - I simply think that it's wrong for government to make promises it cannot keep. In my judgment, having spent a lot of time learning about these programs, they are going to collapse unless something is done. My family is saving 25% of our income for a reason - we are saving that much because we don't think the promises made to us regarding promised military pension, social security and Medicare benefits can be kept.

    That said, the elephant in the room is health care. Social security is manageable when viewed in isolation but as long as health care continues to eat ever-increasing chunks of our GDP then nothing is safe.

  25. Chief,

    Same basic point to you on the "Washington monument syndrome." While it's certainly true that one possible outcome of reform is that the middle and upper classes keep all their bennies and the poor get nothing, that outcome is not predetermined nor do I think it is very likely. I think means-testing, for instance, is something that's much more likely than eliminating benefits for the poor. Of course, I could be wrong - nothing is certain - but if it were up to mean I would means-test all government benefits.

    The things is, Andy, on a relative scale, we really ARE under taxed, especially at the higher income brackets.

    Well, considering I've long maintained the position that we need tax increases for just about everyone but the truly poor, I agree. This is one area where I'm more progressive than most progressives since I believe we tax increases on the middle class as well as the rich. I've written about my own taxes on my blog and here. Serendipitously, I was going through old paperwork and shredding stuff today and came across some of my wife's old tax returns from the mid-late 1990's (before we were married). As a single woman with no dependents earning $36k a year her effective (FICA and income taxes) federal tax rate was 17%. By contrast, last year, married with three kids and income of about $80k our effective rate was 11.5%. Assume we don't have kids (take away the child tax credit ($1k per kid) and adjust dependents) our effective rate would be more like 15-16% - in other words a bit lower than what someone with 1/2 the income paid over a decade ago. By all means, increase taxes on the rich, but please don't drink the same kool-aid that a lot of progressives do and think that will be sufficient. You need to raise taxes on people like me too. You need to control health care cost growth, you need to control pension cost growth at the state and local level, and you need some non-trivial budget cuts all around as well.

    Anyway, another aspect of this debt ceiling deal is interesting. There is this commission that's supposed to recommend cuts that amount to around $1.5 trillion over a decade and if the commission doesn't come to a consensus or Congress doesn't act, then cuts automatically happen. The interesting thing is that entitlements are protected from these automatic cuts except for some small parts of Medicare. Defense isn't protected and would receive the lion's share of the cuts since it is by far the biggest discretionary budget item. So, theoretically, the Democrats could pull a tea-party style hostage operation and the GoP will be forced into concessions if they want to protect the defense budget. That actually gives Democrats a lot of leverage come 2012 and so I don't really understand the hyperbolic "end of the world" crying about this deal coming from people like Krugman, who, amazingly (or maybe not amazingly considering it's Krugman), thinks default would be preferable.

  26. Ran across two excellent essays this morning - An analysis of Democrats and the electorate and an analysis of the analysis. Interesting stuff.

  27. Andy-

    To date, all changes in the terms of military retirement have effected only those who begin service after the change. Yes, Congress can bail on current retirees, but so does the private sector. Numerous companies have converted fixed benefit programs to fixed contribution (401k type) programs mid-stream for current employees. They simply move the vested pension contributions to a deferred annuity fund and Bob's your uncle. IBM is one example.

    And, of course, a major private sector Chap 11 step is to abandon pension plans.

    My point, however, was the difference between an "employer-employee" relationship and a social program. I am not saying Social Security does not need changes. I am simply asking if we, as a people, will bail on the least among us. I have no issue with means testing for Social Security, nor do I have issues with every penny of wages being subject to Social Security tax, even if the wages are so high the person may never draw a penny of benefits under a means testing rule.

    IMHO, we are too focused on the budget being the end game rather than what government should be orchestrating on behalf of our society as the end game. Is our goal about accounting or about the general well being of our society? Everyone in our society?

  28. Andy: I think the problem with means-testing is the same reason that the New Dealers didn't insist on it in the first place; it keeps the middle-class and wealthy with a tiny bit of skin in the game. Means-test and you end up with the reality that the GOP now PRETENDS is the reality - that the rich and middle-class pay for crack babies, lazy bucks, and hootchie mamas. While I think it's a good idea for practical reasons - i.e., I agree with you - I also see why it's never been seriously suggested as a political tactic.

    And I should add that I think that the social entitlement programs - SS, Medicaid and Medicare - are probably so difficult to pare that they WON'T get pared. And you and I know how difficult to cut major procurement programs are.

    So the cuts will come from those things that have no constituency; O&M funds, troop strength, NOAA, the NCDC, FDA inspections, FHWA engineers, CoE projects, transportation and education funding. One of them is already in play - read the stories about the FAA gridlock and the ridiculous waste and abuse it's causing as the Teatards play politics with it.

    I think I mostly have to echo Al here; this debt ceiling game is so toxic because a) it didn't need to happen, and it REALLY didn't need to happen NOW - in the midst of the worst depression since 1945. No matter what Dick Cheney says, deficits DO matter...but not when 15% of the country is out of work! And b) because the way this has played out has BEEN so toxic. The GOP has simply lost its mind. Talking about "deficit reduction" while ruling out revenue increases is practically the definition of insanity. As Al says - these people aren't concerned about where the U.S. ends long as it doesn't include taxes. And the Dems, rather than figuring out what the hell they stand for, are trying to shoulder into the Right's deficit-reduction-without-taxation silliness.

    It's just too depressing for words...

  29. Damn Chief...I just don't know what to say...I'm kind of resigned to the fact that we have lost the Republic...and what was a long slow crawl to oligarchy...well, seems rapidly approaching.
    Just wish the damn oligarchy was benevolent, and not despotic.

  30. Chief, your line of reasoning is excellent, as usual.

    My only concern with it is that I'm not sure there's enough money in the items you list to satisfy the austerity types. Only time will tell at this point.

  31. FDChief: And I should add that I think that the social entitlement programs - SS, Medicaid and Medicare - are probably so difficult to pare that they WON'T get pared.

    I'm not so sure Medicaid won't face some serious cuts. Unfortunately, as of now, the beneficiaries have no voice as do the SS and Medicare recipients. AARP is almost as intimidating as the NRA and Medical Industry lobbies.

  32. Andy-

    As you have said so many times, our health care industry is not sustainable. Sooner or later, it will price itself out of reach of even a deficit running government. That is not the fault of government alone, but a society that has allowed our medical services to reach insanely high prices, resulting in the US spending 50% more the amount of money per capita on medical expenses as the next highest OECD country, and more than double that of 9 or the 13 others.

    Now, those on the right will say that "socialized medicine is the cause of Europe's debt crisis". The fact is, government spending on health care in Europe is a minor expense compared to the true causes of the burgeoning debt. However, public spending on health care in the US, about 46% of the total healthcare spending, exceeds the per capita spending of both public and private in 9 out of the 14 other OECD countries.

    As medical costs continue to rise and wages remain stable, as they have for at least 20 years, more and more people will be unable to afford medical care, putting more and more burden on the government or simply relegating more and more people to the scrap heap. But as "paying customers" shrink in numbers, privately funded care will simply become more expensive to maintain the huge industry that has flourished.

    What really flies in the face or rationality is that the US does not see any economies of scale in health care. You would think that simple overhead would drive up the per capita costs in smaller nations, but they don't. Rather, we have come up with the most overhead intensive model on the face of the earth, and throw more of our GDP at overhead and advertising than many countries with better health outcomes spend in total.

    However, no one has the balls to identify the medical industry as the monster. Rather, there is a cry to let the industry do its thing totally unfettered, which for all intents and purposes it has been doing all along. Only no one will get tax funded assistance to face the beast. We will let them eat cake.

  33. Andy & Al: "As you have said so many times, our health care industry is not sustainable. Sooner or later, it will price itself out of reach of even a deficit running government."

    Very true but there's an interesting trend none of us have thought about recently. A lot of community colleges have heavily modified their academic offerings to allow them to mass-produce workers for the healthcare industry.

    Medical billers (which IS an arcane art), nurses, lab techs, etc. are being mass-produced by the hundreds of thousands. Occupational studies continue to emphasize healthcare as one of the few places you can still predictably make a decent living to millions of impressionable young people.

    When, not if, the healthcare industry starts hitting turbulence these people are going to be dumped out of their jobs in a rough way. This is nothing new, its been going on for decades in lots of other industries, but I think healthcare will suddenly go from being publicly viewed as the industry that saves peoples lives to the industry that breaks them instead. That's going to be a rough time in America in lots of ways.

    My best estimates are that the healthcare industry will start hitting serious resistance at around 20-22% of GDP. We're somewhere in the neighborhood of 18% right now, depending on how it's counted. Perhaps 2-3 more years before trouble starts at current rates of growth.

  34. Pluto-

    It's not solely an issue of health care as a % of GDP, it's a matter of health care per capita versus GDP per capita. And we are way off the charts:

    The burden on each individual, compared to the resources available for each individual is what will break us.

  35. (Cont)

    What many folks do not take into account is that nearly 100% of the population pays a portion of the insurance premiums for the 50% of the population with "private" employer provided plans. It's included in the price of goods and services.

    So, next time you pick up a box of Kellogg's Special K at your local Safeway, keep in mind that the price you pay includes a contribution to the "Employer Provided" health insurance of the Safeway employees, Kellogg's employees, a variety of advertising agencies, the people who transport the cereal from the Kellogg's plant to Safeway, and Lord knows who else. You don't have a choice in the matter. Even the uninsured have to pay a part of the health insurance costs for millions of other "Employer Insured" Americans when they buy life's essentials.

    But we don't call it "socialism". Why, because it doesn't tend to the needs of every citizen, for one reason.

  36. Perhaps Standard and Poor's put our dysfunction succinctly:

    The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.

    See full article from DailyFinance:

  37. Yep. And here's this, from...fuckingDave Frum, of all people:

    "The debt ceiling debate feels like one of those tragic episodes out of the history of the fall of republics. To gain their point on a budget matter, Republicans did something unprecedented in the annals of American government. They made a bargaining chip out of the public credit of the United States. In a well-functioning democracy, certain threats are just not used [not a rule but a norm], and the threat to force the country into default should rank high on the list of unacceptable threats.

    Yet congressional Republicans not only issued the threat, they did so successfully. They have changed the rules of the game in ways that will have ramifications for a long time. Maybe Democrats will copy them. Or maybe Republicans will do it again. Either way -- something that was once unthinkable has become thinkable."

    That's why I compare this to the break point in Roman history that was the Revolt of the Gracchi. Before that time there were limits to what the Senatorial class could or would do to preserve their privilege. But after? No limits. And once it became obvious that the Game was no longer about "what is best for Rome" versus "what's best for this group of Romans or that" then Caesarism became inevitable. Why not? What could be more perfect for partisan gain than to just flat-out fuckin' rule?

    So with this; the most depressing part is that for a crappy little partisan gain the GOP has made it clear that NOTHING is too far; not the "good faith and credit" of the nation, not the supposed political process, not the wishes and benefit of the bulk of Americans.

    That's the road that eventually leads to the bridge across the Rubicon.

  38. Al - "The burden on each individual, compared to the resources available for each individual is what will break us."

    I completely agree. I was just pointing out that there will also be unexpected side effects and that we've probably got a few years yet before things come to a full boil in this area.

  39. FDC - "What could be more perfect for partisan gain than to just flat-out fuckin' rule?"

    To control indirectly rather than to rule directly. This is what our oligarchs seek to do, control the course of the country in ways that favor them without having to rule it. That way they get to hold the baby without having to change the diapers.

    The problem with this approach is that it insulates you from potential pain and so makes your choice of actions more cavalier. Like grandparents who load the grandchildren up on sugar highs and then hand them off to the parents who are about to drive home for four hours.

    Another issue is that worries me is that I'm still seeing what I would call wishful local thinking. Texas is convinced it would be best off alone. The South strongly prefers a country that didn't have the sentiments of New York and California politicians. I'm sure there are many more examples out there.

    All I'm saying is that the game of history is far from over. Buckle up and hang on because the fun is just beginning.

  40. Over? Hell, no.

    But I do think we're seeing a fundamental change in how the game is played. Because for the first time the wingnuts have acted on the threat they've made so many times. They actually put the gun to Sam's head. I don't really think we've ever gone quite that far before.

    But now...if it worked this time, wny not the next? And the next...and the next...until one of the times some jackhole will pull the trigger, and then we're suddenly in a very, very different game, and one that I suspect we won't like one little bit. It's called "imperial collapse" and it can be very stressful for the players.