Ellis Winningham — Fix the Debt – One Group’s Efforts to Cause an Economic Depression

Best takedown of the Peterson crowd I have seen.

In the profession of economics, there’s a lot of derp*. I mean, a lot of it. In fact, when it comes to economics, derp is everywhere. On TV, derp is there: from Fox Derp, Bloomderp, CNBDerp and Derp Dynasty, to MNSBDerp and Derp Maddow. Newspapers too, like The New York Derp and The Wall Street Derp. In Congress, derp makes itself at home. In the Oval Office, derp sits behind the big desk and conjures up macro policy. But, these advocates of economic derp aren’t the subject of our discussion today. I wish to address one particular group that is well-known for extreme derp. Its website, in fact, is 100% derp. There’s not a single, intelligent, realistic statement to be found contained within it; from the front page to the “Donate” section. Even the search function results in derp. It hands out T-Shirts with derp printed on them, which then become signs for the people wearing the shirts that says, “I want to rid America of US Dollars!” It uses derp to cause citizens great anxiety and fear at the thought of savings accounts that pay interest. Derp is its life blood; it’s daily bread and without it, the group wouldn’t exist at all. No, I’m not talking about nutty organizations like the Concorde Coalition or the Heritage Foundation. They promote economic derp, but they also deal in other types of derp. I’m talking about an organization that is dedicated exclusively to promoting the most pernicious form of economic derp. I’m talking about the Count Derpula of economics fear mongering called, Fix the Debt.…

Deep derpitude.

Ellis Winningham
Fix the Debt – One Group’s Efforts to Cause an Economic Depression

* Noah Smith explains "derp"in What is "derp"? The answer is technical. It used to be called "dogmatism."

Disingenuous, back-stabbing Obama lobbying harder than he's ever lobbied before for this big business corporate welfare giveaway

President Obama is pushing hard for passage of the TPP trade deal. Never mind the fact that he spoke out against such deals when he was candidate Obama. It's just another example of his shameless backstabbing and insatiable penchant for neoliberal "change."

Obama says that trade is "inevitable." No, it's not. Certainly not this kind of trade: secret deals that circumvent our own domestic laws and regulations on environment, labor (even child labor), patents, net neutrality and so forth?

News flash, Mr. President...in a vast, highly productive and technologically advanced economy like the U.S. there is pretty much ZERO need for trade deals. It would be much easier and more in the interest of our country and society to just have the government ensure that the residents of our nation have sufficient incomes to enjoy the fruits of their own labor.

We have 46 million people on food stamps, millions of homeless and millions more without the basics. Do we really need to be working to implement policies that feed, clothe, house and raise the living standards of foreigners so our industries can profit? Couldn't our industries profit just the same by selling their product to Americans who have labored to create that very output?

It's maddening to see the president lobby so hard for a deal that likely won't benefit a single American worker. In the decade of the 1970s the nation created 19.4 million jobs with a labor force of only 100 million. There was no TPP or NAFTA. It was also a time of heavy unionization.

Then NAFTA went into effect in January 1994 and from that point on through the end of Clinton's second term the economy created 18.4 million. Less jobs than the 70s and most of those jobs had nothing to do with NAFTA. It was the Internet and dot-com explosion and the whole, Y2K investment boom.

Furthermore, NAFTA's rollout was over a period of 10 years so, what has happened since? I'll tell you what has happened. Nothing. Since 2000 we created only 10 million jobs. Ten million jobs in 15 years with a labor force that is 50% larger that the labor force in the 1970s. Some job creator.

Let's not forget to mention, too, that real wages have declined. Labor's share of national wealth has shrunk and actually, it has never been smaller than it is today. Some boom. Some benefit.

For this we need more trade agreements?

I get even more upset when I see organizations like the creepy Third Way supporting this. The Third Way is to policy what Scientology is to religion. It's like a cult, disguising itself with very "reasonable" sounding ideas that people have been  brainwashed to believe in. Things like debt reduction (to save our kids and grandkids...yeah, right) grand "bargains," to strip Social Security, Medicare and Medicaid from our seniors.

The Third Way is nothing more than an insidious, slick, propaganda operation aligned with the Powers that Be: the same forces that want to dismantle the social safety nets. Their policies are policies of enrichment for the few and lack for everyone else.

The President, Fix the Debt, The Third Way, the Republicans...we are clearly so outnumbered and outgunned that it's a fucking joke, but at least if we're going to go down we can go down swinging and not like a bunch of pansies.

If we know what the consequences of these policies will be (which, we do) and know how to make some money off them at least we can create some wealth and protection for ourselves as it all comes tumbling down.

Get ready, because it's coming.

Steven Rosenfeld — Will Democrats Try To Kill The Party's Progressive Wing To Regain Power?

The GOP went after its more principled wing. Will Democrats follow?

Absolutely. Didn't the election show that the votes are on the right? (snark)

AlterNet
Will Democrats Try To Kill The Party's Progressive Wing To Regain Power?
Steven Rosenfeld

Salon
“I hear you”: President Obama responds to midterm rout of Democrats, lays out centrist agenda

Luke Bunker

Obama said, the two parties could find common ground on “tax reform that closes loopholes,” which would allow for a lowering of corporate tax rates.… 

Finally, the president called for cooperation on international trade agreements.

Just what the public signaled it wants. Not.

Obama also announced that he will soon ask Congress to authorize American air strikes against the Islamic State militant group; a chorus of bipartisan critics had decried the administration’s decision this year to launch the strikes without seeking congressional approval. The president reaffirmed that the U.S. was engaged in the struggle against the Islamic state for “the long term.”

War is always popular — without boots on the ground.

Mary Bottari — What a Victory: How a $40 Million Attack on the Middle Class Went Up in Smoke

The blow-by-blow of the grassroots v. the astroturf.

AlterNet
What a Victory: How a $40 Million Attack on the Middle Class Went Up in Smoke

Mary Bottari | Director of the Center for Media and Democracy’s Real Economy Project and editor of the www.BanksterUSA.org site for bank busting activists

David Walker responds to my tweet

He calls himself "Deficit Ranger." Oh brother.

@mikenorman - Your clip is a gross misrepresentation of my interview via selective editing. My comment was on current not L/T solvency. DW

— Dave Walker (@DeficitRanger) December 29, 2013

Says I "misrepresented" him and he was referring to the "long-term" deficit. So, we're going to run out of dollars in the long term, David?

Here's Greenspan.

Mary Bottari — Astroturf “Fix the Debt” Caught Ghostwriting for College Students

...Jon Romano, press secretary for the inside-the-beltway PR campaign “Fix the Debt” and its pet youth group, The Can Kicks Back, have been caught writing op-eds for college students and placing the identical op-eds in papers across the country.

This is the latest slip-up in Fix the Debt’s efforts to portray itself as representing America’s youth. Previously, they were caught paying dancers to participate in a pro-austerity flash mob and paying Change.org to gather online petition signers for them.The newspapers involved in the scam were not amused.

Campaign for America's Future

Astroturf “Fix the Debt” Caught Ghostwriting for College Students

Mary Bottari

Mark Gongloff — Krugman Trolls Deficit Hawks With One Amazing Chart

The Huffington Post
Krugman Trolls Deficit Hawks With One Amazing Chart
Mark Gongloff

A Pension Deficit Disorder: The Massive CEO Retirement Funds and Underfunded Worker Pensions at Firms Pushing Social Security Cuts

This report analyzes the retirement policies of the U.S. corporations leading the “Fix the Debt” campaign, which is calling for reduced spending on senior citizens’ benefits as part of a deal on the national debt.

A major player in the national debt debate, the “Fix the Debt” campaign, is arguing that cuts to Social Security and Medicare are necessary to avoid economic disaster. Meanwhile, the corporations leading this campaign are contributing to Americans’ retirement insecurity by funneling enormous sums into their CEO retirement accounts while underfunding their employee pension funds.

Key findings:

• The 71 Fix the Debt CEOs who lead publicly held companies have amassed an average of $9 million in their company retirement funds. A dozen have more than $20 million in their accounts. If each of them converted their assets to an annuity when they turned 65, they would receive a monthly check for at least $110,000 for life.

• The Fix the Debt CEO with the largest pension fund is Honeywell’s David Cote, a long-time advocate of Social Security cuts. His $78 million nest egg is enough to provide a $428,000 check every month after he turns 65.

• Forty-one of the 71 companies offer employee pension funds. Of these, only two have sufficient assets in their funds to meet expected obligations. The rest have combined deficits of $103 billion, or about $2.5 billion on average. General Electric has the largest deficit in its worker pension fund, with $22 billion.

IPS — Institute for Policy Studies
A Pension Deficit Disorder: The Massive CEO Retirement Funds and Underfunded Worker Pensions at Firms Pushing Social Security Cuts
Sarah Anderson and Scott Klinger
Contributors include Brent Soloway
(h/t MoveThroughIt in the comments)

Hypocrisy?

Thom Hartmann — Why Is Obama Taking Orders From A Secretive Billionaire?

Peter Peterson, founder and chairman of Peter G. Peterson Foundation. (Photo: Lingjing Bao / Talk Radio News)

Truth-Out
Why Is Obama Taking Orders From A Secretive Billionaire?
Thom Hartmann, The Thom Hartmann Show | Op-Ed

Zach Carter — Executive Pay Of Austerity Advocates Saves Companies More Than $1 Billion Via Tax Loophole

Companies in the Fix the Debt coalition, which advocates for federal austerity policies, qualified for $1 billion or more in tax breaks tied to executive pay packages from 2009 to 2011, according to a new report by the liberal think tanks Institute for Policy Studies and Campaign for America's Future....

Fix the Debt is one of several austerity advocacy groups tied to Wall Street billionaire Peter Peterson, who started a think tank devoted to deficit reduction in 2008 and has bankrolled multiple public relations campaigns on the issue.

A total of 125 CEOs are officially members of the coalition, including CEOs of 90 public companies. The IPS-CAF report only examined tax perks for public companies in the coalition. The same CEO pay loophole is available to private companies, but private firms do not have to disclose executive pay to the SEC.

The coalition urges a host of spending cuts and tax reforms, including benefit cuts for Social Security, Medicare and Medicaid, as a means to reduce the federal budget deficit. A spokesman for the group told HuffPost that while the group doesn't advocate for specific policies, it does insist that comprehensive tax reform be part of any debt deal.

 The CEO pay loophole being used by Fix the Debt companies is extremely popular in corporate America. According to a report by Citizens for Tax Justice, Fortune 500 companies skipped out on $11.2 billion in taxes in 2011 alone thanks to this loophole.

"The stock option loophole is a major reason why corporations are paying record-low federal income tax rates," said Matthew Gardner, executive director of the Institute on Taxation and Economic Policy. "The worst of it is that there is no 'cost' to a corporation that uses stock options to pay its executives, so there's no justification for allowing them to deduct it as an expense. It's not an expense."

The Huffington Post
Executive Pay Of Austerity Advocates Saves Companies More Than $1 Billion Via Tax Loophole
Zach Carter

Reuters — CEOs Slam Fiscal Cliff 'Disaster,' Call For Specific Deficit Reduction Plan

Some in the business community are calling for a change in strategy due to the meager results of the fiscal cliff deal.

"It doesn't work talking to the politicians, obviously," former Wells CEO Kovacevich said. "What we've got to do is educate the American public that our country is going to hell."

There are questions about how meaningful of a contribution Corporate America can make, especially if they do not deliver a unified voice on hard decisions such as industry-specific tax breaks.

Republican Senator Bob Corker from Tennessee said on CNBC on Wednesday morning that the business community could play a great role by pushing for concrete entitlement changes.

The business community appears reluctant to provide lawmakers with specific proposals.

Jon Romano, a spokesman for the Fix the Debt campaign, said the group has set out principles for a long-term deal, but it doesn't want to prescribe what the policy should look like.

"We're really looking to our elected leaders on both sides of Pennsylvania Avenue to come up with that solution to this issue," Romano said.

Mark Kennedy, who heads George Washington University's Graduate School of Political Management and served in Congress from 2001 to 2007, said business leaders need to do more.

He said executives should identify "sacred cows" that should no longer be protected, be more specific about how big a deficit reduction deal should be, and get specific about what they want included.

"It's more helpful to get parameters as to what should be done than to just say, do something," Kennedy said.

The Huffington Post
CEOs Slam Fiscal Cliff 'Disaster,' Call For Specific Deficit Reduction Plan
Reuters

Of course, no CEO wants to get specific and reap the whirlwind of angry customers whose benefits they want to cut, anymore than politicians want to angry voters by advocating unpopular policy. They want to force the president to do the dirty work for them and take the blame.

Paul Krugman calls this correctly in Battles of the Budget

For the reality is that our two major political parties are engaged in a fierce struggle over the future shape of American society. Democrats want to preserve the legacy of the New Deal and the Great Society — Social Security, Medicare and Medicaid — and add to them what every other advanced country has: a more or less universal guarantee of essential health care. Republicans want to roll all of that back, making room for drastically lower taxes on the wealthy. Yes, it’s essentially a class war.

Meanwhile the IMF admits, sort of, that their prescription for austerity hurt some countries in the EZ.

Eurozone Spending Cuts Hurt Economies During Height Of Financial Crisis, IMF Admits

If the media can't call these guys out on these baseless claims by now they're useless!

Check out this interview that Alan Simpson did on the Today Show this morning.

 

Visit NBCNews.com for breaking news, world news, and news about the economy

"There's people that we owe $16 trillion bucks to."   "We're in deficit to the tune of $1 trillion one hundred million. If that isn't a stimulus then the drinks are on me."   "Unless you get in there these people are going to say, I got an idea for you...you're addicted to debt, and we're gonna loan you more and we want more money for our money and then when we do that interest rates will kick up and inflation will kick in..."

First off the gov't owes about half of that $16 trillion to itself, so let's just correct him right off the bat and by the way, why doesn't he make that clear? The answer is, because it's part of his campaign to manipulate you. He has no leverage if you're not scared.  

Next he says we're in a deficit to the tune of $1.1 trillion. And he says, "if that's not a stimulus then the drinks are on me."  

Ok, I'm confused here. Is he agreeing that the deficit is a stimulus?  

Moving on he's saying that we owe money. Let's get real...WE owe nothing. WE got paid, in dollars. That's what WE own not owe. Dollars. That's it. The world (including parts of our own government) got to keep $16 trillion dollars because in the past 234 years that's the amount of dollars the gov't spent into the economy in excess of what it took away from us in taxes. Those people/nations/institutions...whatever...are holding those dollars in dollar equivalents called Treasuries, just like you holding your money in a savings account at your bank. How does the bank "pay you back?" It debits your savings account and credits your checking account. That's it. Done. Nobody screaming where's the bank gonna get the money to pay you back? Nobody saying the bank has to go on austerity in order to be able to move your money from your savings account to your checking account. The bank just makes some accounting changes and your savings account balance goes down and your checking account balance goes up. Same thing with how we "pay back" holders of Treasuries. The Fed just debits their securities account (at the Fed) and credits their reserve account (also at the Fed). In fact this has been done to the tune of $11.6 trillion so far this fiscal year. We're talking two and a half months! In that time the national debt has been almost completely rolled over (paid back).

Let's keep going. Simpson says, people are loaning us the money because we're addicted to debt. So, who is loaning us money? What money? Dollars? Simple question for Alan that the interviewer should have asked: If we make the money, why do we need to borrow? Where is that person who is lending it to us, getting it from? Finally, the most idiotic claims of all about rates going up and inflation going up.

Take a look at the charts below.

US Public Debt and 10yr Treasury yield

And this...

US Public Debt and Inflation

Interest rates have been collapsing even as the debt has been skyrocketing. Inflation has been non-existent even as the debt has been skyrocketing. If these guys can't see this by now it's a joke. If the media can't call these fools out on this by now it's a disgrace.