Sunday, May 29, 2011

Eric Cantor on Taxes

Naturally, we already know House Majority Leader Eric Cantor's take on taxes: cut them, with special emphasis on cuts for the rich and for corporations. Yesterday's speech called for a 25% maximum rate, with the usual trickle-down rationale — let the rich and the corporations keep more of their money and they will, as Republicans like to express it, "invest in America." This is supposed to lead to rapid job growth.

As usual, the basic premise is fallacious. Top tax rates in the United States already are extremely low. Corporations are, in common parlance, "sitting on mountains of cash." Why? Thanks to low demand caused by high unemployment and concomitant excess productive capacity, it doesn't make sense to "invest in America."

As for wealthy individuals, they certainly are looking for places to invest the extra cash they pocketed thanks to the Bush tax cuts and their unconscionable extension under Obama. The sad fact, though, is that American business and industry doesn't offer very satisfactory returns on investment these days. Surplus funds are more likely to go to faster growing parts of the world like India and China, used for commodities speculation, or sunk into the new social media bubble. (Social media companies, by the way, provide very few new jobs.)

What we need — contrary to both Republican and Democratic talking points — is more government spending, because the private sector just is not coming through. If we can pick up employment — in infrastructure improvement, education, health care, environmental preservation, and other areas where we need lasting, long-term improvements — demand for private sector goods and services also will grow.

What we don't need is European style austerity programs. They're only making things worse in Europe, and they are beginning to have the same effects here.

Thursday, May 26, 2011

Medicare, again

The special election won by Democrat Kathy Hochul in New York's heavily Republican 26th Congressional District had national Democrats jumping for joy. Apparently, Paul Ryan's plan to turn Medicare into a voucher program was not at all popular up there in Erie County, and Democrats expect similar feelings extend nationwide. Probably, they're right.

Republicans claim Democrats "misrepresented" the Ryan proposal. Frankly, though, their chief problem seems to be that people understood all too well: just eliminate Medicare, the government insurance program, and replace it with a voucher to buy private insurance. Government savings only can come from voucher amounts always being significantly less than policy premiums. Those who can't afford to pay the difference wind up with no insurance, so they would not even be using their vouchers — leaving even more money to distribute in the form of tax cuts for the rich.

Republicans are right, however, in pointing out that Democrats have not offered a real alternative for reducing Medicare costs. The Obama plan, such as it is, depends mostly on reducing payments to providers — which logically would result in fewer providers accepting Medicare. We are still waiting the administration to suggest a replacement for the cost inflating fee-for-service model, which encourages providers to provide many unneeded tests and unproductive treatment protocols.

The chief reason Medicare is so costly, though, is that the people using it are older and sicker than the general population. To bring costs per patient down, the most sensible thing would be to bring younger, healthier individuals into the pool. In the past, I've recommended selling Medicare policies to major employers who wish to provide coverage to their workers. Since Medicare does not have to advertise nor pay out profits to stockholders, it ought to be able to offer real competition to private insurance companies. To stay competitive, the privates would either have to cut rates or offer better coverage and service.

Yes, this would look a lot like a first step towards a single-payer system, but if the private sector really is so much more efficient than government, it just might be able to steal away Medicare's customers — including the ill and the elderly. Now wouldn't that be a triumph for the free market?

Monday, May 23, 2011

Obama at AIPAC

I was very interested to hear what Our President had to say to AIPAC, the American Israel Public Affairs Committee. Many think of AIPAC as the chief lobbyist for Israel, but that is somewhat off the mark. AIPAC is the chief lobbyist for Likud. When Labour is in power, AIPAC's perspective does not change in any way. AIPAC represents the Israeli right wing, not Israel as a whole, and could not care less where Israeli public opinion falls at any particular time. Supported by old-line Zionists and Christian fundamentalists hoping to accelerate the advent of "end times," AIPAC has no interest in making peace with the Arab world. As long as American taxes go to feed the Israeli military, AIPAC has achieved its purpose.

Regular readers of this blog will appreciate how pleasantly surprised I was when Our President actually held his ground while addressing yesterday's AIPAC convocation, and did not pull back on the statement which referred to 1967 borders despite a major hissy fit by Bibi Netanyahu. Yes, he recognizes that some land swaps will be necessary to accommodate forty years of imperialist incursion, but he didn't back down. Whoopie doo!

Interestingly, it was Bibi who backed down, despite encouragement from Mitch McConnell and others who pander to Christians hoping to bring about an early Apocalypse. Did Obama suggest that the United States might not block the Palestinian Authority's attempt to gain recognition as a nation from the UN unless the Likudniks made enough concessions to get Abbas back to the bargaining table? I'd like to think so, but then, there are a lot of things I'd like to think.

(I'd like to think BSK was set up, but I know he's just another of those powerful men who thinks his dick is a scepter embodying unlimited sexual power. Somebody really ought to inject all those guys with medroxyprogesterone 17-acetate. It would be a far better world.)

Monday, May 16, 2011

Debt, more debt, and a bit of Afghanistan

I've been remiss. Sorry. Let's try to catch up a little.

So the US reached its current debt ceiling today, and Timmy Boy Geithner was only too happy to dip into the pension funds of federal employees to prolong the suspense. Nobody was surprised, and the yawns resonated across the Potomac. Wall Street, apparently, is not at all worried.

Why isn't Wall Street worried? My guess is that the Street is sure that nothing that happens will be in any way damaging to the Street. Oh, for Christ's sake, that's not a guess — that's just a totally non-creative reading of the way life is, these days. All I can hope for is that Democrats won't give in to "triggers" unless there are tax increase triggers as well as spending cut triggers. Hopefully, they won't have to look to Obama for leadership.
Dominique Strauss-Kahn is in a New York City jail at the moment. Is it entirely likely that he, as a powerful world leader, has the testosterone, the hubris, and the disdain for lower class African immigrants to be guilty. Quite possibly, if he stopped to think at all, he presumed she was an illegal, and hence wouldn't report the assault.

On the other hand, it's not outside the realm of possibility that he was set up. Nicholas Sarkozy can't be terribly upset — in fact, quite a few champagne corks must have been popping at UMP headquarters when the news broke. A more likely scenario, though, is that certain bankers holding short positions on Greek debt find it in their interest to stop another bailout of Greece. With Strauss-Kahn out of the picture, the inevitable default is likely to come far sooner.

NYPD says it has forensic evidence supporting the alleged assault, which seems a little odd considering it took the form of what Bill Clinton famously called "not sex." The maid, who came from a Francophone country where France continues to exercise a good deal of economic power, must have shown extraordinary presence of mind — especially for a presumably traumatized woman pushing around a cart well stocked with those little bottles of mouthwash. Yes, testosterone, hubris, and disdain offer a more likely explanation, but I'm just saying that's not the only explanation.
Meanwhile, John Kerry and a few others are suggesting that the recent Osamacide makes a somewhat accelerated exit from Afghanistan more acceptable. Sadly, somewhat accelerated is not likely to mean "next week," but at least Petraeus is keeping his mouth shut for the moment, which is appropriate for the future director of the CIA.

Now, if only Asif Ali Zardari and Ahmad Shuja Pasha can persuade Pakistani Islamists that they really didn't have anything to do with bin Laden's assassination, and also persuade Hamid Karzai he's better of accommodating Pakistan than India, some real progress in getting the US the hell out of Afghanistan might be achieved.

Friday, May 6, 2011

Yank the Trigger

Even though it's lots of fun to make up stories about what might have happened in Abbotabad earlier this week, and how Pakistan may or may not have been involved, this post involves a very different kind of trigger — one a lot more dangerous than the one that helped blow a hole in Osama bin Laden's head. This trigger comes in the form of the Corker-McCaskill CAP Act, a bipartisan (if you count McCaskill) bill that would tie combined discretionary and non-discretionary spending to a specific (and sharply reduced) percentage of GDP, and "trigger" automatic across-the-board cuts should that limit be exceeded.

(I still can't find a reference to one of my favorite quotations, "Bipartisan means everybody gets screwed," so I can't attribute it properly. Maybe I made it up myself, but I don't think so.)

Bills that "trigger" automatic spending cuts or tax increases are favorites of cowardly, self-serving "Congress critters" (RIP Molly Ivins), because nobody has to take personal responsibility for whatever shit happens as a result. Bob Corker calls his bill "a legislative straitjacket, a way of forcing Congress to dramatically cut spending over 10 years."
A straight jacket is a comfortable fit for a legislator who wants to serve the corporate agenda without attracting too much public disdain. Corker-McCaskill, which could have been written by Grover Norquist himself, naturally makes no provision for automatically raising taxes. It is designed to "starve the beast," more efficiently and effectively than would be possible were Congress required to vote for specific cuts. Even more distressing, it would outlaw Keynesian economics, making it impossible for government to respond to recession with economic stimulus.

Another "advantage" (from Corker's perspective) is that the bill would "eliminate the deceptive 'off-budget' distinction for Social Security." What this means is that Social Security payments could be cut automatically, well before the Social Security trust fund is exhausted. Social Security, because of the trust fund, is not a government expenditure — it is government debt, because the money collected for the trust fund over many years is invested in Treasury securities. What the Corker-McCaskill bill requires is that the United States default on the debt it owes current and future retirees. To default on that debt is no different than to default on the debt owed to banks, foreign governments, or private investors — and nobody is suggesting that we default on that debt.

Corker-McCaskill is the kind of bill one expects of Republican toadies to the plutocrats. If Claire McCaskill really is a Democrat, however, she is a particularly stupid and/or cowardly Democrat — and so is any other Democrat, in either house of Congress, who signs on to this particularly repellent proposal.

Monday, May 2, 2011

We won! Right?

Whoopie doo! Bin Laden is dead! We finally got him!

Now, as I see it, is a perfect time to declare victory and get the hell out of Afghanistan — and, while we're at it, the rest of the way out of Iraq as well. Yes, the death of Osama bin Laden is more of a symbolic victory than a military victory, but what the hell... as long as we won.

Our president has to be feeling pretty chipper today, as he should. If you're president, symbolic victories go a long way. How it all happened remains more than a little vague, so I don't mind indulging myself in a little pure conjecture, just for fun, mind you. I have no direct evidence for anything that follows, but it sounds good.

From what we've been told to date, there was only one mansion with eighteen foot walls in the upper-middle class neighborhood of Abbottabad where bin Laden was staying — and given what we know about the pervasive penetration of Pakistan by its security agency, we should assume that ISI knew who was living there. CIA operatives, on the other hand, may have been in the dark — since ISI doesn't make them especially welcome in Pakistan. It follows that the US got the tip about bin Laden from ISI.

It also follows that ISI wanted something in return for giving such politically valuable information to the Obama administration. One hopes that what ISI wanted was an expedited withdrawal of the US from Afghanistan, so that Pakistan can reassert what it considers its "natural" influence over its neighbor. Add that to the US foreign policy/military shuffle discussed in my two previous posts, and it seems that the troops just might be home well before the announced date of 2014.

Rejoice, ye progressives! Perhaps you weren't totally screwed. ("Hope" springs eternal, especially in the run-up to an election.)

In the meanwhile, expect to hear demands for Osama bin Laden's long-form death certificate from the usual quarters.