|Number 540||October 28, 2013|
Welcome to the new readers this week! This is a Super-Sized Nygaard Notes, typically they are about one-half this long. So, this editor's note will be short and sweet. Coming up next: The Nygaard Notes Pledge Drive 2013! Send in your Pledge today and beat the rush. Thanks to those of you who have already renewed for this year!!!
On April 15th of this year the Political Economy Research Institute released a remarkable paper by economist Robert Pollin. Entitled "Austerity Economics and the Struggle for the Soul of U.S. Capitalism," the 31-page paper offers a very succinct de-mystification of the current budget/deficit/debt madness in Washington that is perhaps more timely now than it was last spring. Here's an excerpt from page 2 of the document:
"Amid the wreckage of the 2008-09 Wall Street collapse and Great Recession, orthodox economists and political elites in both the United States and Western Europe have been strongly pushing the idea that the only way out of the mess is to deliberately make life worse for almost everybody. Details aside, this is the basic idea behind the austerity agenda that has become the conventional wisdom in both the U.S. and Europe, regardless of which political parties happen to hold office. It has been the underlying premise for both the Democratic and Republican sides of all recent debates—on debt limits, the "fiscal cliff," sequestration, and all skirmishes in between—concerning the U.S. federal budget.
"Thus, despite Barack Obama's reelection last November, the inside-the-beltway Democrats, including Obama, appear committed to reaching common ground with Republicans over a bipartisan austerity agenda that would entail significant cuts in Medicare, Social Security and public spending on education, infrastructure, family support and the environment. No such cuts have been agreed to as of this writing (March 2013). But Obama continues to offer them to Republicans as part of a fiscal "grand bargain" that would also include some tax increases for the wealthy beyond the modest increases enacted in January 2013. To be sure, the Obama austerity agenda is softer than the hard-right approach favored by Republicans. But it is the long-term Republicans agenda to gut Medicare, Social Security and public education that continue to frame the debate."
I would add the attack on the Income Tax to the list, but essentially I think Pollin has it right. What he refers to as "the underlying premise" is what we in Nygaard Notes-land refer to as Deep Propaganda, and the failure to highlight this deep stuff is a major reason why many people mis-characterize the recent showdown in Washington as "madness" or as a "defeat" for Republicans. His analysis is well worth reading, and can be found on the PERI website.
Like many, I had sort-of tuned out the jabbering about a government shutdown, since I thought I had heard the story before. But things started to change for me on October 3rd, when I was listening at work to NPR's All Things Considered. The interview I heard was with Democratic (Senator Mark Begich of Alaska, who is "a member of the Senate Democratic leadership." Speaking about the continuing resolution, or "CR", that the Senate had prepared and sent to the House for approval, Begich expressed his bewilderment at the negative response it got from House Republicans. The CR is the budget agreement that was needed to end the shutdown, remember. Describing the CR negotiations, Begich explained, again and again, how the Democrats had given up, and how "amazed" he was that the Repubs still weren't happy.
Begich pointed out not once, not twice, but SIX TIMES (in a roughly-four-minute interview) that the Democrats' version of a "compromise" was to give up everything. Here are his words, with all six repetitions conveniently highlighted (and numbered!) so you can't miss them:
"You know, this CR that we sent over also met their [the Republicans'] numbers. That's what's so amazing about this. It's not like, you know, it was a budget number between ours and theirs. It was their number."(1)
The NPR host paraphrased: "This was the Republicans' number, in other words, that baked in the sequester cuts."
(The sequester cuts are the "automatic" across-the-board federal spending cuts that were agreed to back in 2011, in an earlier major Republican victory. When that deal happened, here's what Republican House Speaker John Boehner said: "When you look at this final agreement that we came to with the White House, I got 98 percent of what I wanted. I'm pretty happy.")
Begich then repeated the point: "Yes. And, you know, on an annualized basis, we came down $70 billion. We came to their number."(2) In case the audience still didn't get the point, he added, "So it's a totally unnecessary, you know, shutdown that's occurred. And we took their numbers.(3) You know, that's what's so amazing about this."
It is kind of amazing, if you think about it.
The NPR host dutifully asked if it were not true that it was partly Obama's fault, since "a number of Republicans" say that "President Obama has flatly said, I will not negotiate, and that's misguided."
So Begich explained that one doesn't need to negotiate if one has already sold out completely: "I would say—as I said earlier—we've come down to their number on the budget.(4) It's not like we went up. I mean, I don't know what negotiations is called but when you—two sides get to the table, usually you give a little on both sides. We gave it all.(5) But to be very frank, those past negotiations, those have been around the budgets and the amount of money expenditure. And we have done that. We have compromised all the way down to their number."(6)
Yep, that's what budgets are about, all right: "the amount of money expenditure." And, as we see elsewhere in this issue of the Notes, those cuts of $70 billion will cause great pain to lots of people—and I'm not talking about long lines at airports and closing of parks.
Get it? The Democrats gave up the ghost before the body was even cold. Freely admitted, by a member of the "Democratic leadership" on October 3rd.
It was not even two weeks later, on October 14th, that the same host on the same NPR program, All Things Considered, interviewed Republican Congressman Tom Cole of Oklahoma. He's also House deputy whip, in which job NPR tells us he "counts and cajoles fellow Republicans ahead of a vote." In that capacity, he told NPR, "I think the sequester cuts, which evidently [Democratic] Senator Reid is trying to get out are probably nonnegotiable from a Republican standpoint."
NPR Host: "You're talking about the spending caps that were put in place under sequestration. The Democrats want to relax those in the coming year."
Tom Cole: "Well, actually, Republicans want to relax them as well, but they want to do it by them getting savings on the nondiscretionary side of the budget and that takes you into discussion over entitlements where, I think, everybody acknowledges that's the real driver of the debt." [I just have to note here that everybody decidedly does NOT acknowledge any such thing, but no challenge to this absurd statement was heard from NPR on this day.]
The next day the Washington Post reported that "Senate Majority Leader Harry M. Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) appeared confident that they had developed a framework that could win the approval of Congress and spare the country from a first-ever default on the national debt. 'We've had a good day,' McConnell said in a speech closing the Senate for the evening."
Good for whom? Well, to answer that question the Post turned, as had NPR, to our friend Senator Cole, who "said he was confident that McConnell would not sign off on a deal unless [the Republican leader in the House, John] Boehner was convinced that it could win a broad majority of Republicans."
Then Cole explained how un-crazy the Republican strategy really is. Here's how the Post reported it: "'McConnell, I don't think, will deliberately put us in a bad position,' Cole said, adding that any agreement that creates a process to litigate broader budget issues would achieve an important GOP goal. 'If you're able to do that and you're able to get some savings out of the entitlement portion of the budget, 'those aren't Republican defeats. They are Republican victories.'"
Ahhh... Entitlements. That's the big victory, the key to the whole story.
The real powers behind the Republicans (I'm not talking about the Tea Party) never had as their goal the "repeal" or "defunding" of Obamacare. They know that the market-based Obamacare system marks yet another defeat for a universal single-payer system (or, better yet, a fully socialized system). Not even the token presence of a "public option" was allowed to be included. Last November the business magazine Forbes ran an article, "ObamaCare, Part III: Who Will Benefit The Most?" The top two: Insurance Companies and Hospitals. Patients? Not so much. Yet another Republican victory.
No, the real goals of the reactionary right are the same as they were when I wrote about them back in 2002, in NN #147. Back then I asked, "What can we expect in American politics in the near future?" I noted that "The individualist, libertarian ideologues who are increasingly setting our national agenda have three main targets in the current era." The first target was "welfare," which was "already mostly obliterated." The other two were Social Security and the income tax.
And now, eleven years later, while everyone is distracted by Obamacare, the attack on Target #2, Social Security, continues at a high level. Enter Paul Ryan.
In George Orwell's 1984 the propaganda ministry, the Ministry of Truth, spreads a new language among the population called "Newspeak," in which War Is Peace, Freedom Is Slavery, and Ignorance Is Strength. And now we have a media system that may not be as intentionally sinister as the Ministry of Truth, but it also seems put considerable energy into redefining familiar terms. Maybe we could call this "News-Speak." The most recent slogan goes like this: Republican Victory Is Republican Defeat.
I've just gone over how the Democratic leadership admits that "We gave it all" to the Republicans in the recent debt/budget negotiations. The leader of the House Republicans has told us that "I got 98 percent of what I wanted." Another Republican leader looks at the upcoming negotiations about preserving current budget cuts and moving on to cutting Social Security, and tells us that these "are Republican victories."
And yet... And yet...
When the deal ending the government shutdown was signed on October 16th, the New York Times reported it as "a near total defeat for Republican conservatives," the Washington Post called the result a "humiliating failure" for Republicans, and the left-leaning Guardian of London told us that "the terms of surrender could not have been more humiliating" for Republicans.
The Fiscal Guru
The "failure" has locked in, for now, the sequestration cuts which started with an earlier giveaway by the Democrats called the Budget Control Act of 2011, or BCA. And this is the first sense in which the October 16th deal to preserve the sequester cuts was a big victory for the Austerity Crowd. (Since the consequences of this "victory" remain severely under-reported, I offer some specifics on the sequester elsewhere in this issue of the Notes.)
Recall what Republican Tom Cole said about Republicans wanting to "relax" the spending cuts known as "sequestration" because they want to get "into discussion over entitlements." If sequestration is the Pawn in this chess game, the Austerity Crowd will happily sacrifice it in order to capture the Queen: Social Security. And this is a job for Representative Paul Ryan, whom the New York Times refers to as "the conservative Republicans' fiscal guru."
In April of 2012 I wrote a piece in these very pages called "The Ryan Budget." (Nygaard Notes #505, April 10, 2012). In it I explained how extreme the Ryan Budget (called The Path To Prosperity) was, and I tried to paint it as absurd—it would have, after all, shrunk the non-military parts of the federal government to almost literally nothing. But then... Paul Ryan was selected as the Vice-Presidential nominee of the Republican Party. And now... he's the chair of the House Budget Committee where (you guessed it), the Path To Prosperity is the centerpiece. And Paul Ryan is a "guru." And his budget is still just as absurd.
It's a new and improved Path To Prosperity, to be sure. In March of this year the outstanding Center on Budget and Policy Priorities analyzed the 2014 version of the "Path to Prosperity" and released various reports to the public. Here's the opening paragraph of one of them:
"House Budget Committee Chairman Paul Ryan's new budget would cut the part of the budget that supports everything from education and law enforcement to biomedical research to nutrition assistance by more than $1 trillion below the funding caps in the 2011 Budget Control Act (BCA) over the next decade. That's hundreds of billions of dollars below the funding levels that would result from nine years of sequestration."
Now recall the previous article in this issue of the Notes, wherein Oklahoma Republican Tom Cole noted that, if Republicans are able to "create a process to litigate broader budget issues" and to "get some savings out of the entitlement portion of the budget," then "those aren't Republican defeats. They are Republican victories."
Cole's remarks were reported on October 15th. On October 16th the official notice came out that "House Speaker John Boehner today named the . . . negotiators to serve on a formal House-Senate conference committee charged with crafting a budget." And the first two names on the list of "negotiators" are: Paul Ryan and Tom Cole! This tidbit, and its implications, remain virtually unreported in the nation's major newspapers.
This is all part of the "near total defeat" that we must understand is a "humiliating failure. . . for Republican conservatives." Copyright: George Orwell.
"They Hope the Fever Has Broken"
We were told that "the issue" for Republicans in the recent battle over the government shutdown was the repeal or "defunding" of Obamacare. While it no doubt was, and is, for some Republicans, for the reactionary power structure—the Big Business interests that fund and maintain the "Free Market" structures that serve the One Percent—the fact is that Obamacare is small fry. The real targets for them have been, and remain, the same three main targets that I listed back in 2002: Welfare, Social Security, and the Income Tax. The first one has been checked off of the list, and we are now, and for some time have been, working on #2: Social Security. Social Security remains perhaps the most popular government program in history, so the preferred term for the target is "entitlements." And since the overwhelming majority of citizens really don't want to "cut" them, the preferred term there is "reform."
And, as always, the entire framework for all of this is Deficit Mania, which is but one chamber in the House of Horrors known as Austerity, despite the fact that the interest burden of the national debt, relative to the size of the economy, is lower than at virtually any time since World War II. Economist Robert Pollin puts it plainly in a report released earlier this year: "the U.S. has not been facing a fiscal crisis at all in the commonsense meaning of the term." (See this week's "Quote" of the Week.)
The New York Times mostly got it right on its October 17th front page, when it reported that:
"Mr. Boehner and his leadership team had long felt that they needed to allow their restive conference to pitch a battle over the president's health care law, a fight that had been brewing almost since the law was passed in 2010. Now, they hope the fever has broken, and they can negotiate on issues where they think they have the upper hand, like spending cuts and changes to entitlement programs."
As always, we must translate the word "changes" to its actual meaning, which is "cuts." Other code words for "cuts" to Social Security and Medicare include "reform" and "preserve."
But those cuts are the stuff of a later Republican victory. Let's have a look at the current and ongoing victory, the current budget deal that "baked in the sequester cuts," as NPR so delicately put it.
Back on February 20th, the Washington Post reported a story in their online "Wonkblog" headlined "The Sequester: Absolutely Everything You Could Possibly Need to Know, in One FAQ." The reporter, Dylan Matthews, updated the story recently and asked "What notable programs get cut [under the budget plan knows as 'sequestration']? Here are just a few, with the amount they got cut by in fiscal year 2013 (which concluded on September 30, 2013):
- Military research is cut by $6.3 billion.
Lists are good, but sometimes a list of "X Million" here and "X Million" there fails to communicate the depth and magnitude of the human suffering and lost opportunities that the austerity agenda and its child, the sequester, is delivering. So what I've decided to do here is to offer a very brief list of quotations from various sources that I hope will come together to create a more visceral understanding the assault on you and me that is currently underway. Remember, these anecdotes are illustrating a larger, general trend of cutbacks the alleged "need" for which appears to unite the two major political parties.
"The truth is that [Republicans have] won a most important victory: No one is talking anymore about ending the sequester." And, says Hiltzick, "It's proper to recall the sequester's devastating effects on millions of Americans..."
(As we go to press, there actually is talk of modifying the sequester, but only in exchange for even larger cuts to Social Security and Medicare. A Lose/Lose situation.)
"It will cost as many as 1.6 million jobs over that time frame, the [Congressional Budget Office] says."
"Thousands of low-income residents of public housing will be thrown out of their homes. Public housing authorities that managed to stave off evictions this year say they will be out of options next year, when the cuts go deeper."
"Tens of thousands of 3- and 4-year-olds will be barred from Head Start, perpetuating the vicious cycle of poverty and poor educational attainment faced by those families. Unemployment benefits will continue to be cut by an average of 15% nationwide. And of course job growth will be worse because of the sequester. That's a great one-two punch Congress has landed on the jobless."
Their press release tells us that "Some critical statistics from the report include: Private investment in academic research has been feeble. Only 2 percent of survey respondents have been able to find private funds to make up for those lost from federal grants; More than two thirds of survey respondents do not have the funds to expand their research operations, postponing important scientific advances in all fields; Research jobs have been lost. Nearly half of survey respondents have laid off researchers and 55 percent have a colleague who has lost his/her job, and; An overwhelming majority of scientists in all fields believes the U.S. has lost its position as the global leader in scientific research."
"Take the Meals on Wheels program in Contra Costa County, California, which, like the national program, has had to cut 5.1 percent of its budget. After losing $89,000 in federal funding over a six-month period, the program had to scale back the number of meals it serves from 1,500 to 1,300 a day. This puts its director in the unenviable position of having to choose which low-income or lonely 80-year-olds are less deserving of a meal delivery."
USA Today noted that there is "little hard data on the impact of the budget cuts on special education," but "Across the country, advocates for children with disabilities are grappling with the impact of sequestration..."
Commenting on the same thing, Live Science quoted the president of the American Meteorological Society in May, after the first round of sequester cuts had taken effect, who said that "It really highlights the game of chicken we're playing with the nation's safety."
"Jean Halloran, director of food policy initiatives at Consumers Union, said she's concerned that the cuts will lead to more outbreaks. 'That's fairly alarming,' Halloran said. 'It's a huge step in the wrong direction.'"
"The FDA, says USA Today, "could also take longer to review and approve new drugs" due to the cuts.
Nobody can sell something unless someone buys it. So why did the Democrats buy what the Republicans were selling in the recent budget negotiations? The media used countless hours of airtime and countless tons of newsprint to tell us all the twists and turns of the recent negotiations, telling us who was "winning" and who was "losing." The problem is that when we zoom in so closely to get a better view of the details, we lose sight of the overall picture. So what is that overall picture, the one that the most devoted followers of the news—I'm talking about YOU, NPR listeners! among others—are missing?
Big-time politics in the United States have always been about money, but over the past couple of decades money has become even more important to the shaping of the political scene. It's not about "corruption," per se. Remember The Investment Theory of Money in Politics that I have discussed in these pages before.
That theory turns the common understanding of money and politics on its head. The common belief is that behavior follows money. That is, politicians agree to do things, in exchange for which they get money. The Investment Theory says that money follows behavior. That is, the people of the monied classes (and their corporations) watch politics very closely—sort of like scouts for a sports team. They look for players who play the game the right way. In political terms, they look for politicians whose political beliefs mesh with the agenda of the people with the money. Then, when they find these right-thinking politicians, they do everything they can to make sure that they ascend to power. These politicians are not, for the most part, corrupt. They believe in what they are doing. What is corrupt is the rules of the game, the ones that allow money to dominate the public realm. "Right-thinking" politicians in this system will win, while anyone who might rock the Free-Market/austerity boat will not win. Of course there are exceptions, but the general rule holds true.
This applies to both Republicans and Democrats, which goes a long way toward explaining the current "defeat/victory" reporting on the debt crisis. I don't think I can explain it any better than I did when I introduced the Investment Theory to readers back in the year 2000. So here is a lengthy excerpt from Nygaard Notes #56 (So... How About That Campaign? ). Here I'm talking about how investors decide which politicians to select for success:
It's not only politicians that money selects for success. It works the same way with ideas. That's why all we hear about is how there's no money, which virtually guarantees that nobody will even notice when Republicans and Democrats both subscribe to the bogus idea of "austerity," when the real issue is disparity. Both Democrats and Republicans seem to attract votes while telling us that's there's not enough to go around, so lots of voters must believe them. And that "believing" brings us into the realm of Deep Propaganda, the breaking up of which is Step One in turning things around, which is why I talk about it so much.
An enormous amount of money in recent decades has gone into promoting and legitimizing the idea that The Market Knows Best. Any candidate or would-be candidate who questions the Individualistic and Competitive ideology that is the foundation for such market fundamentalism is destined to discover that there is a glass ceiling that will prevent them from advancing much beyond the holding of an office on the municipal level. Maybe it's not a glass ceiling, come to think of it. It's more of a cash ceiling. Can't get through it either way.