The "We can't afford it" bullshit incoming

 

Robert Reich 

11m  · 

My take on the week ahead: Congress is back this week, so you can expect more of the “we can’t afford it” bullsh*t from every Republican member of Congress and two Democratic senators (Manchin and Sinema) — aimed against Biden’s and the Democrat’s social investment bill.

Behind the scenes, big corporations and Wall Street are paying huge bucks to feed this hokum to the public. And the mainstream media is doing their bidding. So it should be no surprise that Americans are utterly confused and many are misinformed about what’s at stake in this important legislation, which will come to a head in the next few weeks.

Let's take my Friday interview with CNN’s Erin Burnett as Exhibit A.

She started by asking me: “The big question is whether Democrats can afford all of this.” By making this her first question, she’s already framing the debate around the cost of the plan. And by phrasing it as “whether Democrats can afford,” she’s making it a partisan issue.

Let’s be clear: Every rich country other than the United States already provides childcare, pre-K, child assistance, paid family leave, subsidized college, decent housing, and health coverage extending to vision and hearing. Every other rich country is taking measures to reduce climate change. We are the richest of the rich. Of course America can afford these.

In fact, there’s a good argument that making these investments will grow the economy (childcare will free more people to join the workforce, pre-K and community college will make our workforce more productive, and so on), while not making them will create huge costs down the line (the tab from wildfires and floods due to climate change is already mammoth).

Erin Burnett’s other guest, a former Republican governor, then argued we can’t afford these things because the national debt is too high.

This is a slight-of-hand. The national debt isn’t at issue. There’s no reason for the debt to grow if we tax the wealthy and big corporations to pay for the plan, as Biden and most Democrats — and the vast majority of the public — want to. Simply repealing the Trump-Republican tax cut to the rich and big corporations would pay for almost half the cost of the plan.

Biden is asking the wealthy to pay their fair share in taxes, but Burnett shows two slides purporting to show that they already pay their fair share (one showing the richest 20 percent of Americans pay 78 percent of the nation’s taxes, the other showing that the richest 1 percent – who pull in 20.9 percent of the nation’s earnings -- pay over 40 percent).

This is seriously misleading because the ultra-wealthy pay almost nothing in taxes. For example, Jeff Bezos, the richest person in America, didn't pay any income taxes for at least two years between 2006 and 2018.

How can the ultra-wealthy maintain their lavish lifestyles and pay almost no income taxes? By keeping their incomes small and borrowing against their vast wealth. (Bezos’s yearly income is only around $81,000.)

To give you some idea of how much wealth is now at the top, America’s 660 billionaires increased their wealth by $1.8 trillion just since the start of the pandemic. That’s half the cost of Biden’s entire plan right there.

Hence the fallacy of using shares of income rather than wealth to determine what’s a fair tax. Wealth is far more concentrated at the top than is income. The wealthiest 0.1 percent have as much wealth as the bottom 90 percent put together. This argues for a wealth tax or higher capital gains taxes, increased inheritance taxes, and a bar on heirs inheriting vast fortunes without paying capital gains on them.

Finally, the figures Burnett cited only look at federal taxes. State taxes – which comprise half the total tax revenue going to government – impose a disproportionate burden on lower-income people. That’s because they come largely in the form of sales taxes, which take a bigger chunk out of lower incomes.

Biden’s plan may be the last chance we get to fix what’s broken in our system. But the public knows little or nothing about it — other than it will cost a bundle. Even if Biden and other Democrats are doing a poor job explaining it, the mainstream media is doing a horrendous job. A democracy requires informed citizens. How are Americans to be informed about something as crucial to their future as this, when they’re being systematically misled?

PS: People often ask me “how do you keep your cool on these TV shows?” The short answer is I often don’t. I almost lost it with Erin Burnett.

Robert Reich warns us

Watch Your Wallets — The Next Crash Is Coming

Trump and his Republican enablers are now reversing regulations put in place to stop Wall Street’s excessively risky lending.

Link here.

What learning curve?

JPMorgan Trading Loss Suggests Little Has Changed Since The Financial Crisis

JPMorgan Chase CEO: I Have No Idea Whether We Broke The Law
(Best quote so far, my bold)

NEW YORK -- JPMorgan Chase CEO Jamie Dimon says he does not know whether the bank broke any laws in the surprise $2 billion loss by one of its trading groups. In an interview with NBC's "Meet the Press," Dimon says regulators should look at the matter.

What? NOW you want regulators to do their job? AFTER you've lost 2 BILLION, BILLION with a B dollars?? Because you don't know if losing 2 BILLION dollars on "from risky bets on opaque derivatives at a London trading desk" was the thing to do or not? Do you know where that 2 BILLION dollars went to, sir? ... Do you know how much good 2 BILLION dollars could do for our schools and communities and infrastructure and elderly and students and everybody? Just don't ask the US taxpayer to bail you out again. And don't try to make up the loss by overcharging on student loans or sneaking unnecessary fees into checking accounts or screwing over desperate mortgage holders. Make up the loss out of your fucking bonuses.

Compare and contrast headlines

This FOX News’ Dr. Ablow Wants Male Veto Over Reproductive Rights

I believe that in those cases in which a man can make a credible claim that he is the father of a developing child in utero, in which he could be a proper custodian of that child, and in which he is willing to take full custody of that child upon its delivery, that the pregnant woman involved should not have the option to abort and should be civilly liable, and possibly criminally liable, for psychological suffering and wrongful death should she proceed to do so.

to this: She, the decision maker.

In a significant decision, the Punjab and Haryana High Court last week ruled that the right to abort a pregnancy in a marriage rests with the wife and not husband. “A woman is not a machine in which raw material is put and a finished product comes out. She should be mentally prepared to conceive, continue the same and give birth to a child. The unwanted pregnancy would naturally affect the mental health of the pregnant woman…” said the court.

This Why Iceland Should Be in the News, But Is Not

What happened next was extraordinary. The belief that citizens had to pay for the mistakes of a financial monopoly, that an entire nation must be taxed to pay off private debts was shattered, transforming the relationship between citizens and their political institutions and eventually driving Iceland’s leaders to the side of their constituents. The Head of State, Olafur Ragnar Grimsson, refused to ratify the law that would have made Iceland’s citizens responsible for its bankers’ debts, and accepted calls for a referendum.

to this: Factbox: Greek austerity and reform measures

Greece's cabinet approved late on Saturday 325 million euros ($428 million) of extra austerity measures needed to complete a 3.3 billion euro package of cuts -- the price demanded from Athens for a new EU/IMF bailout. 

This: In a 325-Page SEC Letter, Occupy's Finance Gurus Take on Wall Street Lobbyists

Yesterday, a group affiliated with Occupy Wall Street submitted an astounding comment letter to the Securities and Exchange Commission. Point by point, it methodically challenges the arguments of finance industry lobbyists who want to water down last year's historic Dodd-Frank Wall Street reforms. The lobbyists have been using the law's official public comment period to try to kneecap the reforms, and given how arcane financial regulation can be, they might get away with it. But Occupy the SEC is fighting fire with fire, and in so doing, defying stereotypes of the Occupy movement.

to this: Thomas Frank Talks With Truthout on How Wall Street Doubled Down on Trashing America's Economy 

It is the absurd theme that runs throughout "Atlas Shrugged," where the main character, who has organized a strike of the billionaire class, describes himself as "the defender of the oppressed, the disinherited, the exploited - and when I use those words, they have, for once, a literal meaning." That's right, in one of the most popular novels in recent history, billionaires are said to be - insisted to be! - the "disinherited" and "exploited" class.
Understanding how conservatives get themselves to this point is slightly trickier. They merely understand "elitism" in a different way than you and I. The true powers of society are not the rich, but the professionally-credentialed and the government-connected. Conservatives basically invert the populist categories of yore. Instead of blue-collar workers or farmers being the exploited producer class, it is entrepreneurs, who work so hard and have to comply with regulations and pay taxes and put up with the whining of their tattooed hipster employees. And it is the rest of us who are the real parasite class. 

Banks are nervous.

Good.

Occupy it all

And so, at bottom, we have a spiritual crisis. How long can people of goodwill support billy-clubbed police officers knocking about citizens who are peaceably assembling, as is their right? If they assemble for longer than you want them to, then it's inconvenience versus the First Amendment. It is not OK to shout "fire" in a crowded theater just because you don't like the movie.

Really, the police and the city officials should be guarding the rights of those with legitimate grievances. They should protect those who have been laid waste by the rest of society. That's what government is for, to ensure that constitutional liberties are maintained. Anything else is just oligarchy.

There is a constituency here, people who have lost their homes or their jobs or life savings because of a system designed to make them suckers. They have experienced a profound loss of faith, and that is what will still be true come spring. I don't think this thing is going away anytime soon.

What would Jesus do? Chase the moneychangers from the temple, is my guess. There's precedent.

"This one could take them all down" Chris Hedges

Our voices will be heard

Even if there are those who are working hard to silence us.

An emphatic NO to business as usual

Around the world.

They want a message?

Here it is.

Update: Here is the transcript (via Bryan of Why Now?)

Tone deaf or just stupid?

The Chicago traders, confronted by the protesters’ “We are the 99 percent” message, crafted their own not-so-subtle reply, hanging signs in eighth-floor windows that said, “We are the 1%"

You guys, you do know that buildings can come down just as easily as they went up, right? Way to galvanize the pitchfork and torch mob.

And realize, you will have to walk down on the pavement with the 99 percent one of these days....

Occupy Wall Street

List of demands. Sounds good to me.

Morals, censorship, stupidity.

Explaining Wall Street ethics, cheating, intuition. Dan Ariely on our buggy moral code.

Censored Doonesbury about Palin not reading. And then there is the party of stupid. And Republicanism as religion. (Last one is scary.)

Surprise! (And thank god.) There are still intelligent people out there:

A federal judge on Wednesday blocked enforcement of a first-in-the-nation law that restricted what Florida physicians can say about guns to their patients, ruling the law violates the U.S. Constitution’s free speech guarantees and does not trample gun rights.

Some reasons why we actually need a government. You know... the kind Republicans deny exists. A government that works for the people. Or as the Republicans would have it... only some of the people.

Oops. FBI Raids Home Of CBS Correspondent By Mistake

Wars over water are just over the horizon.

Just imagine all those plastic dinosaurs we played with were really just terribly bald. Dinosaurs had colorful feathers.

Just a reminder:

Pat Robertson wants you to know if you get Alzheimer's.... your spouse can dump you.

Keep it up

If cats reported the news...

It's Saturday! Do you know where your cat is?

CHICAGO – No one knows how a tabby cat named Charles traveled the 1,300 miles from his New Mexico home to Chicago, but he's set for a complimentary flight home on American Airlines in a carrier donated by an Albuquerque business.

Charles disappeared about eight months ago while his owner was out of town and a friend was caring for him.

Report from Texas, Muffin.

Today, the Texas State Board of Education released amendments to the state's social studies curriculum that essentially rewrite history to comport with the personal ideological and religious beliefs of some members of the board. As explained below, the proposed amendments depart drastically from accepted historical accounts. Indeed, as the New York Times Magazine has reported, they are so disturbing that at least one member on the board vehemently exclaimed, "burst[ing] out in seemingly embarrassed exasperation": "Guys, you're rewriting history now!"

If the changes are implemented as proposed, it could affect the education of students from kindergarten to 12th grade across the country for the next 10 years: because Texas is one of the largest purchasers of textbooks nationwide, the changes the board makes to its standards often end up in textbooks purchased by other schools districts around the country.

Over to you, Whiskers.

Democrats don't want to deviate far from the Dodd draft, and they love the politics of putting Republicans and Wall Street on the same side of a battle line. They hope the optics there will be so bad, that Republicans will ultimately be shamed into caving. But ultimately Dems need 60 votes simply to debate the bill, and if the Republicans stick together in the face of a likely political backlash, there won't be a bill. And nobody knows dedication like the Senate GOP.

A lot of feathers will be flying, to be sure. To Spot for the weather:

WASHINGTON (AFP) – Global temperatures fueled by El Nino seasonal warming last month chalked up the hottest March on record, US weather monitors reported.
"Warmer-than-normal conditions dominated the globe, especially in northern Africa, South Asia and Canada," the National Oceanic and Atmospheric Administration said in a statement on Thursday.
Combined global land and ocean average surface temperature for March 2010 was the warmest on record at 13.5 degrees Celsius (56.3 degrees Fahrenheit), which is 0.77 degrees Celsius above the 20th century average of 12.7 C, it said.

Stop being so theatrical, Spot. Our science report from Midnight:

LONDON – A lingering volcanic ash plume forced extended no-fly restrictions over much of Europe on Saturday, as Icelandic scientists warned that volcanic activity had increased and showed no sign of abating — a portent of more travel chaos to come.

Scientists say that because the volcano is situated below a glacial ice cap, the magma is being cooled quickly, causing explosions and plumes of grit that can be catastrophic to plane engines if prevailing winds are right.

And more from the Onion:

PASADENA, CA–A team of cold-hearted, killjoy scientists at NASA's Jet Propulsion Laboratory callously announced Monday that the likelihood of complex life on Mars is "extraordinarily low," dashing the hopes of the public just like that.

Cats are secretly unmoved by this announcement....

Blog sprinkles

Welcome in the Year of the Tiger! Cautiously...

Tengrain of Mock, Paper, Scissors remembers Presidents' Day.

Why words matter. (And why education matters... and why stupid people can be so easily manipulated....)

Speaking of manipulation, Wall Street is using reverse psychology and pretending to WANT regulation! So you will think voting against regulation will hurt the evil banksters! Which is what they want! Oh them cleverish evil doers!

That's why we need a Robin Hood Tax! (video is good, too.)

Via Steve Bates, the Christianists have decided to rewrite history from the school ground up.

Maybe losing their source for caffeine will finally wake up the climate change deniers.

It's clear the next logical step is to WiFi the ENTIRE WORLD!!

The banksters have really gotten out of hand. Bank forecloses on house that was paid for. With cash.

Rachel Maddow holds her own and hits Republican Rep. Schock with the truth. Very satisfying.

One way to deal with state debt? Cancel 12th grade!

More jobs, please

Paul Krugman of the New York Times:

But there’s also, I believe, a question of priorities. The Fed sprang into action when faced with the prospect of wrecked banks; it doesn’t seem equally concerned about the prospect of wrecked lives.

And that is what we’re talking about here. The kind of sustained high unemployment envisaged in the Fed’s own forecasts is a recipe for immense human suffering — millions of families losing their savings and their homes, millions of young Americans never getting their working lives properly started because there are no jobs available when they graduate. If we don’t get unemployment down soon, we’ll be paying the price for a generation.

So it’s time for the Fed to lose that complacency, shrug off that fatalism and start lending a hand to job creation.

Why do banksters get a hand and the economic engine of the country ... the middle class ... gets the finger?

Watch Bill Moyers tonight!

Arianna Huffington:

Bill Moyers' show is always illuminating, but tonight's is one that no one should miss. When I spoke to Bill yesterday he described it as "a moment of truth-telling that could ignite the public's passion for Wall Street reforms that have been strangled in the crib by the big banks and their bought-and-paid-for politicians."

Bankster bastards

Is this an example of why the gross stuff floats to the top of a sewage reclamation system?

Robert Scheer explains:

But for those of us less sophisticated in the ways of Wall Street, it is a surprise that Merrill Lynch executives were rewarded for failure at the same time Bank of America was using $45 billion in taxpayer funds to take over the brokerage house. Six hundred ninety-six executives who helped run Merrill into the ground were granted more than a million bucks each.

BofA lawyer Liman attempted to put an egalitarian spin on this government-sponsored welfare for the superrich by pointing out that all told, another 39,000 Merrill employees averaged only $91,000 in bonuses, but the judge wasn’t having it: “I’m glad you think that $91,000 is not a lot of money; I wish the average American was making $91,000.”

That’s the point; the average American is paying for the banking debacle not only in taxes for the bailout but with lost jobs and homes. Yet the SEC, which is supposed to be protecting the ordinary citizen’s interests, decided to give BofA execs a bye. The question is why Bank of America and Merrill failed to inform their shareholders that such payoffs were part of the deal. The details of the bonuses were known to BofA CEO Kenneth Lewis and other top bank executives but not mentioned in the merger agreement or proxy statements sent to the company’s shareholders for approval.

And the smackdown:

As Judge Rakoff concluded, Bank of America and Merrill Lynch had not only “effectively lied to their shareholders” but the money to finance their bonus scam had come “from Uncle Sam.”

Thank you, your honor.

Goldman Sachs is in the news

Matt Taibbi:

THE GREAT AMERICAN BUBBLE MACHINE

From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression - and they're about to do it again.

And a wonderful reaction to Taibbi's article by Stephen Foley of The Independent:

Perhaps you have heard by now that Goldman Sachs is "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money".

It is the opening line of a piece in Rolling Stone magazine, which has been zinging around the email inboxes of Wall Street for the past few days, and which has got Goldman's tentacles all a-twitching with fury.

Matt Taibbi's piece is a rip-roaring read, obviously. It goes over well-trodden ground, listing all the Goldman alumni in positions of power in governments and at regulators around the world (or not listing them actually, since that would be "absurd and pointless, like trying to make a list of everything"), and then accuses the bank of using its influence to get government out of the way so that it can inflate all the recent investment bubbles, from dot.com stocks, through oil prices, to the biggest one of all, the US housing bubble.

In keeping with the hyperbole of the row, Goldman's wonderfully arch spokesman Lucas van Praag described the piece as "an hysterical compilation of conspiracy theories," adding: "Notable ones missing are Goldman Sachs as the third shooter [in John F Kennedy's assassination] and faking the first lunar landing."

Very funny. The Rolling Stone article is indeed a horribly unfair arrangement of the facts. In these howls of rage against the way unfettered finance led us into boom and bust, it is always tempting to assume Goldman must be uniquely villainous just because it has been uniquely profitable – but it is illogical to single out any one institution for stoking investment mania that by definition has many, many participants.

It is also not true that the US government's bailout of Wall Street was a matter of Goldmanites at the Treasury handing taxpayer money over to help out a few of their friends in banking. That is an outright misrepresentation of what happened last autumn, and if people start to believe it, we will doom ourselves to one day letting the banking system collapse – at which point we will learn all over again how ensuring the soundness of the banks is vital to keeping an economy out of a slump.

Yet there has been something troubling me about Goldman's response to this little flap, and it is this: the sheer lack of humility.

And speaking of Goldman Sachs' lack of humility:

Goldman Sachs bankers in line for record bonuses

Bankers at Goldman Sachs could be in line for record bonuses as compensation on Wall Street looks set to rebound in spite of problems in the wider economy.

And:

NEW YORK -- The U.S. Justice Department arrested a former Goldman Sachs Group Inc. employee and charged him with stealing computer codes related to the firm's high-speed trading platform.

Sergey Aleynikov, a naturalized U.S. citizen who emigrated from Russia, allegedly unlawfully copied, duplicated, downloaded and transferred computer codes from Goldman Sachs and uploaded the codes to a computer server in Germany, according to a complaint filed by federal prosecutors.

The complaint from the government didn't specifically reference Goldman Sachs. Goldman Sachs was referenced during Saturday's bail hearing, and a person familiar with the matter confirmed that Mr. Aleynikov worked as a computer programmer for the company.

The person familiar with the matter also said, "The theft has had no impact on our clients and no impact on our business."