WAKE UP AMERICA! PAUL CRAIG ROBERTS SPEAKS THE TRUTH: "IN SHORT, THE ATTITUDE OF BOTH PARTIES IS: IF YOU ARE NOT THE ONE PERCENT, YOU ARE DISPOSABLE. THE AMERICAN PEOPLE AND THE ILL NO LONGER COUNT; ONLY BUDGET CUTS. LETTING THE ELDERLY DIE SOONER IS CHEAPER. WE CAN THEREFORE AFFORD MORE WARS FOR HEGEMONY AND MORE TAX CUTS FOR THE ONE PERCENT."

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The Message From Both Parties Is That Americans Are Disposable ~ Paul Craig Roberts

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September 7, 2012 | Original here

If political conventions are ranked on a one to ten scale for intelligence, I give the Republican Convention zero and the Democrats one.

How can the United States be a superpower when both political parties are unaware of everything that is happening at home and abroad?

The Republicans are relying for victory on four years of anti-Obama propaganda and their propriety programed electronic voting machines. For nearly four years Republican operatives have flooded the Internet with portraits of Obama as a non-US citizen, as a Muslim (even while Obama was murdering Muslims in seven countries), and as a Marxist (put in power by the Israel Lobby, Wall Street, and the military/security complex).

Most Republican voters will vote against Obama based on these charges despite the curious fact that no committee in the Republican-controlled House of Representatives held a hearing to determine if Obama is a citizen. If Obama were not a citizen, why would the very aggressive House Republicans not capitalize on it. It would be easy for a Congressional committee to determine if Obama were a citizen. Despite the propaganda, the Republicans in office have shown no interest in the propaganda charges spread by Republican operatives over the Internet.

Either Republicans have no confidence in the charges and do not want to end up proving with Congressional hearings that Obama is a citizen, or the Republicans, having destroyed every other aspect of the US Constitution, reducing it to “a scrap of paper,” feel that making an issue of the last remaining Constitutional provision other than the Second Amendment would be the height of hypocrisy and don’t want to risk opening the constitutional issues that Republicans have run roughshod over.

If the Republicans can destroy habeas corpus, due process, violate both US statutory and international law, ignore the separation of powers, and create a Caesar, why can’t the Democrats run a non-citizen?

Why didn’t the Republican convention raise the issue about the Obama regime’s claim that the executive branch has the power to assassinate US citizens without due process of law? No such power exists in the US Constitution or in US statutory law. This gestapo police state claim exists only as an assertion. Republicans ignored this most important of all issues, because they support it.

Why didn’t the Democrat convention raise the issue that the Republicans took us to wars based on 9/11 assertions without ever conducting an investigation of 9/11? No qualified high-rise architect, structural engineer, physicist, chemist, or national security expert believes a word of the US government’s 9/11 story. Neither do the first responders who were on the scene and witnessed and experienced the event.

Many experts keep their opinions to themselves, because otherwise the federal grants to their universities are over and done with or their architectural and engineering businesses are boycotted by patriotic former clients.

Regardless of these risks, there are 1,700 architects and engineers who have sent a petition to Congress that they do not believe one word of the official explanation and who demand a real investigation.

Why did not either party raise the question of how can the US economy recover when corporations have offshored millions of US middle class jobs, both manufacturing jobs and professional service jobs. For at least a decade, the US economy has been able to create only lowly paid domestic non-tradable (not exportable) service jobs, such as waitresses, bartenders, and hospital orderlies.

Both parties talk total nonsense about jobs. The Republicans say they can create jobs by not taxing the rich. The Democrats say they can create jobs by financing jobs programs. The Republicans say that the Democrats’ jobs programs simply take money from business investments and give it to those who patronize bars and the drug trade. The Democrats say that the low taxes of the Republicans just subsidize yachts, exotic cars, private aircraft, and $800,000 wrist watches for the one percent, most of which is produced abroad.

Neither political party will admit that when US corporations offshore their production for US markets, Americans are removed from the incomes associated with the production of the goods and services that they consume. Offshoring is defended by both moronic political parties as “free trade.” In fact, offshoring is the gift of what was US GDP to China, India, and the other countries to which US corporations locate their production that they sell to Americans. US GDP goes down, the GDP of the countries who make the American goods sold to Americans goes up. The idiot free market economists call the de-industrializing of America “free trade.”

As an intelligent economist – an oxymoron – would know, destroying consumer incomes by moving their jobs to other countries, leaves consumers without incomes to purchase the imported offshored goods.

Neither American political party recognizes this disconnect. Neither party can afford to recognize it, as both parties are dependent on corporate campaign financing, and offshoring boosts executive bonuses and share prices. A political party that opposes offshoring of US jobs simply does not get financed.

So, the great “superpower,” the “indispensable nation,” the world hegemon, is going into an election, and no one knows what are the stakes.

Why did not either political party ask: if Washington has demonized Iran, why did the 120 countries that comprise the non-aligned movement convene in Iran last week?

Is Washington’s propaganda failing? Can Washington no longer convince the world that the countries that Washington wants to destroy are evil and must be destroyed?

If Washington’s propaganda is failing, the world rule of the hegemonic power will not succeed. As world rule is Washington’s goal in keeping with the neoconservative ideology, then Washington is failing and is not the superpower it pretends to be.

Most credible foreign policy experts, none of which either political party has, believe that Washington has thrown away US “soft power” by its obvious lies and unjustified military attacks on seven Muslim countries, its encirclement of Russia with missile bases, and its encirclement of China with air, naval, and troop bases.

In other words, Washington’s moral force no longer exists. All that exists is financial and military force, and both will fail as they are insufficient.

Neither party asked why the US is at wars with Muslims for Israel. Why should Americans be losing lives and limbs for Israel while going broke and running up enormous war debts for our children and grandchildren? The answer from both parties is to blame the country’s bankruptcy on what Washington does for its own economically disenfranchised citizens. America’s financial problems are all the fault of Social Security, Medicaid, Medicare, food stamps, housing subsidies, Pell grants – any and every thing that gives a leg up to the non-one percent.

In short, the attitude of both parties is: if you are not the one percent, you are disposable.

Both Obamacare and the alternative Republican voucher program dispose of ill Americans who confront potentially terminable diseases. The American people and the ill no longer count; only the budget counts. Letting the elderly die sooner is cheaper. We can therefore afford more wars for hegemony and more tax cuts for the one percent.

Have any peoples in human history ever been less represented by their government and political parties than Americans?

The US government represents Israel and the one to ten percent. Everyone else is disposable.
Regardless of the political party whose lever is pulled in November, every American who votes will be voting for Israel and for their own demise.

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Republican Deficit Hawk Hypocrites

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http://youtu.be/KYPvaC831xY

THE BUSH TAX CUTS (ABOUT TO BE MADE PERMANENT BY THE SOCIAL DARWINISTS) "SAVED THE RICHEST 1 PERCENT OF THE TAXPAYERS MORE MONEY ON THEIR TAXES LAST YEAR THAN THE REST OF AMERICA'S 141 MILLION TAXPAYERS RECEIVED IN TOTAL INCOME!"

The Republican’s Social-Darwinist Budget Plan

TUESDAY, MARCH 20, 2012

In announcing the Republicans’ new budget and tax plan Tuesday, House Budget Committee Chairman Paul Ryan said “We are sharpening the contrast between the path that we’re proposing and the path of debt and decline the president has placed us upon.”

Ryan is right about sharpening the contrast. But the plan doesn’t do much to reduce the debt. Even by its own estimate the deficit would drop to $166 billion in 2018 and then begin growing again.

The real contrast is over what the plan does for the rich and what it does to everyone else. It reduces the top individual and corporate tax rates to 25 percent. This would give the wealthiest Americans an average tax cut of at least $150,000 a year.

The money would come out of programs for the elderly, lower-middle families, and the poor.

Seniors would get subsidies to buy private health insurance or Medicare – but the subsidies would be capped. So as medical costs increased, seniors would fall further and further behind.

Other cuts would come out of food stamps, Pell grants to offset the college tuition of kids from poor families, and scores of other programs that now help middle-income and the poor.

The plan also calls for repealing Obama’s health-care overhaul, thereby eliminating healthcare for 30 million Americans and allowing insurers to discriminate against (and drop from coverage) people with pre-existing conditions.

The plan would carve an additional $19 billion out of next year’s “discretionary” spending over and above what Democrats agreed to last year. Needless to say, discretionary spending includes most of programs for lower-income families.

Not surprisingly, the Pentagon would be spared.

So what’s the guiding principle here? Pure social Darwinism. Reward the rich and cut off the help to anyone who needs it.

Ryan says too many Americans rely on government benefits. “We don’t want to turn the safety net into a hammock that lulls able-bodied people into lives of dependency.”

Well, I have news for Paul Ryan. Almost 23 million able-bodied people still can’t find work. They’re not being lulled into dependency. They and their families could use some help. Even if the economy continues to generate new jobs at the rate it’s been going the last three months, we wouldn’t see normal rates of unemployment until 2017.

And most Americans who do have jobs continue to lose ground. New research by professors EmmanualSaez and Thomas Pikkety show that the average adjusted gross income of the bottom 90 percent was $29,840 in 2010 — down $127 from 2009 and down $4,842 from 2000 — and just slightly higher than it was forty-six years ago in 1966 (all figures adjusted for inflation).

They could use better schools, access to higher education, lower-cost health care, improved public transportation, and lots of other things Ryan and his colleagues are intent on removing.

Meanwhile, America’s rich continue to grow richer — and many of them (and their heirs) are being lulled into lives whose hardest task is summoning the help.

Anyone who thought the Great Recession might reduce America’s wild lurch toward wild inequality should think again. The most recent data show that just 15,600 super-rich households – the top 1 tenth of 1 percent – pocketed 37 percent of all the economic gains in 2010. The rest of the gains went to others in the top 10 percent.

Republican Social Darwinists are determined that the Bush tax cuts of 2001 and 2003 be made permanent. Those cuts saved the richest 1 percent of taxpayers (roughly 1.4 million people) more money on their taxes last year than the rest of America’s 141 million taxpayers received in total income.

Thank you,House Republicans, for “sharpening the contrast” between your radical Social Darwinism and those of us who still cling to the belief that the most fortunate have a responsibility to the rest.

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Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock. His "Marketplace" commentaries can be found on publicradio.com and iTunes. He is also Common Cause's board chairman.

SOME SLANTS ON OBAMA'S STATE OF THE UNION ADDRESS THAT YOU MAY NOT HAVE HEARD ON NETWORK TV

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January 26, 2011


Obama Calls for Spending Freeze, Lowering Corporate Taxes in State of the Union

President Obama delivered his second State of the Union address last night.
Speaking before a newly divided Congress, Obama said the United States was in a 21st century version of the space race and in a global competition to create jobs in science and research. Obama focused much of his speech on the issue of jobs and proposed a number of deficit-cutting measures, including a five-year freeze in spending on some domestic programs.



Consumer Advocate Joan Claybrook and Former Salt Lake City Mayor Rocky Anderson Respond to State of the Union

President Obama began his second State of the Union address by paying tribute to Rep. Gabrielle Giffords of Arizona but did not address the issue of gun control. He spoke about the need for clean energy but did not mention the word "climate" once in his address. He talked about the economy but never mentioned foreclosures. We get response on Obama’s the State of the Union speech with longtime consumer advocate Joan Claybrook and the former mayor of Salt Lake City, Rocky Anderson, who is now director of High Road for Human Rights.



Dr. Atul Gawande Compares Obama’s "Frustrating" Record on Healthcare Reform and LBJ’s Leadership in Passing Medicare

In his State of the Union address, President Obama defended his healthcare overhaul and invited Republicans to help him move forward with essential fixes to the law. We hear from Dr. Atul Gawande, a surgeon at Brigham and Woman’s Hospital in Boston, staff writer at The New Yorker magazine and an associate professor at Harvard Medical School. "There’s leadership needed to give meaning to the policies for the public and to explain what the value is," Gawande says. "Obama] allowed the opponents to brand every one of those policies as failures, even though they passed."



Harry Belafonte on Obama: "He Plays the Game that He Plays Because He Sees No Threat from Evidencing Concerns for the Poor"

We speak with legendary singer, actor, humanitarian and activist, Harry Belafonte. "I think [Obama] plays the game that he plays because he sees no threat from evidencing concerns for the poor," Belafonte says. "He sees no threat from evidencing a deeper concern for the needs of black people, as such. He feels no great threat from evidencing a greater policy towards the international community, for expressing thoughts that criticize the American position on things and turns that around. Until we do that, I think we will be forever disappointed in what that administration will deliver."

Why You Should Feel Cheated, Deceived and Sickened by America's Stunning Inequality, Even If You're Doing Well

If middle- and upper-middle-class families had the same share of the economic pie as in 1980, they'd be making an average of $12,500 more per year. 

AlterNet / By Paul Buchheit

January 10, 2011 | Why should a relatively prosperous upper-middle-class family care about inequality? There are lots of reasons, but here's the most personal one: that's our money the very rich are taking! Based on Internal Revenue Service figures, if middle- and upper-middle-class families had maintained the same share of American productivity that they held in 1980, they would be making an average of $12,500 more per year.

That bears repeating: $12,500 of my money every year to the richest 1 percent, and $600 more to pay my share of their tax cuts!

Inequality in the U.S. doesn't get the attention it deserves. Many of us brush it off, thinking, "So the rich get richer -- it's always been that way." Or we think: "I'm doing OK myself – and I want to be really rich someday, too."

The lopsided distribution of wealth in the U.S. doesn't get the blame it deserves for our budget problems, either. On the contrary, since our economic system is based on individual freedom, most of us believe in the inalienable right to make unlimited amounts of money. The thought of taking back a greater share from innovative and industrious business leaders is (shudder) "socialism."

So instead we increase sales taxes and service fees. We cut police forces and educators. We remove funding for food pantries, homeless shelters and elder assistance.

The massive redistribution of income from the middle classes to the rich over the last 30 years is like a malignant tumor that doesn't appear on the surface but eventually destroys the whole body. Every one of the 90 percent of Americans who makes less than $114,000 a year should be aware of this – and they should be angry.

U.S. GDP has quintupled since 1980, and we all contributed to that success. But our contributions have earned us nothing. While total income has also quintupled, percentage-wise almost all the gains went to the richest 1 percent.

So we're being cheated. How are we being sickened?

In their book, The Spirit Level: Why Greater Equality Makes Societies Stronger (Bloomsbury Press, 2009), Richard Wilkinson and Kate Pickett have documented the numerous studies that correlate inequality with shorter life expectancies, increased disease and health problems, and even higher murder rates. These effects are attributed to the stress of "relative deprivation" -- trying to survive in a community where economic, educational and health care disadvantages persist in an otherwise prosperous environment.

The statistics clearly indicate that rates of illness in an unequal society are higher at all levels of income, even for the very wealthy. Wilkinson and Pickett document numerous studies that liken inequality to a "pollutant" that impacts the health of society as a whole. Even the super-rich can't escape.

So we're being cheated and sickened. How are we being deceived?

That $12,500 per American family mentioned earlier translates into a trillion extra dollars of income every year for the richest 1 percent (not including their tax cuts). The very wealthy insist all of this money will stimulate the economy.

But it's well known by economists that low-income earners spend a greater percentage of their overall income on consumption, while high-income earners save more. Middle-class America has been led to believe the growth at the top will eventually produce more jobs. But many of us have college-educated sons and daughters who can't find suitable employment. Fortune magazine reported that the 500 largest U.S. companies cut a record 821,000 jobs in 2009 while their collective profits increased threefold to a record $391 billion.

The deception has persisted for 30 years. According to Forbes magazine, the top 20 private equity and hedge fund managers took an average of $657.5 million in 2006. The salaries of these 20 people could have paid for 25 police officers, 25 firefighters, and 50 teachers for every one of the 3,000 counties in the United States. Instead we see counties like Ashtabula in Ohio, which cut back its police force from 112 to 49, while a judge advises the residents to "get a gun" to defend themselves.

Some hedge fund managers made up to $4 billion in one year. That's like one man telling my son and 100,000 other young men and women: "I have jobs for you, but my personal stimulus from the top will start with a yacht and an estate -- and then we'll just wait a while."

The great deception goes beyond jobs into another very personal area: home values. A Harvard University study revealed that while household wealth nearly doubled from 1995 to 2004 ($25.9 trillion to $50.1 trillion), almost 90 percent of the gains went to the top quarter of households.

It gets worse. According to noted researcher Edward Wolff (pdf), only the top 5 percent of American families increased their percentage of the country's total household net worth from 1983 to 2007. So unless you make $160,000 or more, your household value has decreased, percentage-wise, over the last 25 years. 

Taxing the 1 percent of America responsible for all this is not "soaking the rich." The soaking has already been done, in the opposite direction. The inequality caused by this sickening theft and deception is not just a plague on poor people -- at least 90 percent of us should be feeling it, and fighting back.

Paul Buchheit is a professor with City Colleges of Chicago, founder of fightingpoverty.org and co-founder of Global Initiative Chicago. He is the editor of and main contributor to the forthcoming book, "American Wars: Illusions and Realities" (Clarity Press).

"BoA should be placed in receivership for its serial crimes and unsafe and unsound practices. Instead, the Obama administration prominently displays its endorsement." -- Bill Black

Blogger's Note: My post yesterday is deep background for the story below.

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The Effort to Claim That Economists Support Obama's Capitulation on Tax Cuts for the Wealthy

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Read More: Bank Of America , Barack Obama , Barack Obama Taxes , Bush Tax Cuts , Chamber Of Commerce , Grag Mankiw , Obama Tax Cuts , Peter Cardillo , Tax Cuts , Taxes , Wall Street , Wells Fargo , Business News

You know the administration is desperate when it creates a web page citing economists who support its capitulation on taxes.

The web page cites the support of five economists. Peter Cardillo, the Bank of America, Greg Mankiw, and Wells Fargo (are the second through fifth economists on Obama's list). Who are these supporters and why is the administration proud of their support? Cardillo is an economist for an investment firm, Avalon Partners. Avalon's web site states that it specializes in "wealth management" for "affluent investors...to meet the unique needs of high net worth individuals...." Yes, the wealthiest one-hundredth of one percent of Americans -- the truly, uniquely needy.

The administration's web site gives pride of placement to Avalon Partners' support of Obama's decision to support the extension of Bush's dramatic reduction in the taxes its ultra-wealthy clients will pay. That tax reduction will make Cardillo and his senior colleagues at Avalon Partners, themselves among the wealthiest Americans. Obama's capitulation on tax breaks for the richest one percent of Americans is worth tens of thousands of dollars personally to Cardillo and hundreds of millions of dollars to Avalon's clients. Mr. Cardillo does not support Obama's capitulation -- he rejoices in it.

Indeed, he has said in a recent interview that the reduction in taxes for the elites has helped fuel a "Santa Claus" rally in stocks. Obama played St. Nick for the wealthiest of Americans to the tune of tens of billions of dollars. The reasons that Cardillo supports the bill are obvious. The mystery is why Obama fails to realize that his support demonstrates why Obama's capitulation is so harmful to the nation. At a time when income inequality has reached record levels in modern America and crippled our democracy Obama has given in to bullies who made increased inequality their central goal.

Obama claims that he capitulated to the Republicans on taxes for the wealthiest in order to reduce unemployment. Here's what Cardillo said about Obama and unemployment just before the midterm elections:

"As far as corporate America hiring again it's basically dependent on what happens in Washington," says Peter Cardillo, chief economist at Avalon Partners in New York. "If the opposition party should gain enough seats to perhaps reverse the present administration's policies somewhat, then I think you'll see a big pickup in employment."

Obama has promoted the views of one of his most virulent opponents, who gloried in and profited from his and the Democrats' recent electoral and legislative defeats. Simultaneously, Obama launched another petulant attack on his strongest supporters. The administration's daily floggings will continue until morale improves among progressives. Generations of political scientists will marvel at this administration's self-destructive reflexes.

The Bank of America (BoA) is next on the administration's list of supporters. BoA's senior leadership will personally save millions of dollars in taxes and its wealthy clients will save billions of dollars in taxes because of Obama's decision to support the continuation of the Bush tax cuts for the wealthiest Americans. Their support for Obama's agreement to support extended tax cuts for the wealth should have warned Obama that he was making a mistake.

The Bank of America is one on the major funders of the Chamber of Commerce's war on financial regulation, the administration, and Democrats. The Bank of America is a perfect example of why the "three strikes" laws never apply to corporations. The Bank of America has run a massively unlawful foreclosure system based on perjured affidavits. It purchased two notorious financial institutions (Countrywide and Merrill Lynch) that were destroyed by policies of deliberately making and purchasing fraudulent "liar's" loans. The Bank of America has recently admitted to a widespread policy of defrauding states and localities. It even has an openly racist senior advisor in Germany who claims that the U.S. mortgage crisis was caused by outlawing "red lining" -- refusing to loan to blacks. It's not often that senior bank officials openly stress their nostalgia for the good ole' days of open racism. I've repeatedly brought this racist to the attention of the administration and BoA in the U.S. and in Germany without ever prompting even a response. My colleague Randy Wray and I have explained why BoA should be placed in receivership for its serial crimes and unsafe and unsound practices. Instead, the Obama administration prominently displays its endorsement.

Professor Mankiw, Chairman of George W. Bush's Council of Economic Advisors, is the next supporter that the Obama administration highlights. Mankiw was a leading apologist for the Bush tax cuts for the wealthy. He even defends the wealthy when they become wealthy through fraud. He infamously responded to George Akerlof and Paul Romer's paper demonstrating the dominant role that "looting" by S&L CEOs (accounting control fraud) played in causing the debacle, by opining that "it would be irrational for operators of the savings and loans not to loot." Mankiw blamed the S&L debacle on excessive regulation and was one of the architects of the de-supervision that permitted the current crisis to occur.

The administration thinks it says good things that the Bush administration's principal apologist for its tax cuts for the wealthy supports Obama's agreement to extend those tax cuts. The mind boggles.

Wells Fargo is next on Obama's roll of honor. Wells Fargo's senior leaders, like BoA and Avalon Partners' senior leaders, have personal and professional interests in supporting tax cuts for the wealthy. Wells Fargo is overjoyed by Obama's agreement to extend tax cuts for the wealthy. All of these endorsements simply emphasize the extent to which Obama was taken to the cleaners. It's bad to be bullied, but it's pathetic to cite the testimonials of those that got even wealthier through the bullies' triumph as evidence of your success.

Bill Black is an associate professor of economics and law at the University of Missouri-Kansas City. He is a white-collar criminologist, a former senior financial regulator and the author of The Best Way to Rob a Bank is to Own One.

Obama and Democrats in Congress want to extend unemployment benefits, but Republicans say the federal deficit can't bear the $33 billion cost. However, they are offering this compromise: They will allow extention of unemployment benefits in return for a two-year extention of tax cuts for the richest 1% ...worth about $130 billion!!! (Compassionate conservatism?)

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The American Jobs Emergency

By Robert Reich, Robert Reich's Blog

04 December 10

The American Jobs Emergency Requires Action

his is not a recovery. It's a continuing jobs emergency and it demands action.

We learned this morning that unemployment rose to 9.8 percent in November and employers added only 39,000 jobs. Private employers added 50,000 - the smallest gain since January. Government employment continued to shrink.

We're heading in the wrong direction. In October, the jobless rate was 9.6 percent, and employers added 172,000 jobs. Private-sector job growth totaled 160,000.

At this rate unemployment won't return to its pre-recession level for more than a decade, if ever.

Over 15 million Americans were jobless in November. This doesn't include those who are working part-time but would prefer to work full time. Nor does it include a record 1.3 million who are too discouraged even to look for work.

Nor does it take account of the fact that most families are dependent on two breadwinners. So to figure out the true impact on most families, all these numbers have to be doubled.

Nor does it reflect the fact that the level of unemployment tracks level of education. Only 5 percent of those with college degrees are now unemployed, while more than 20 percent of everyone else is without work.

Maybe that's why Washington doesn't get it. The Washington echo chamber is filled with college degrees.

The Big Money economy on Wall Street and in corporate suites doesn't get it, either. They're doing marvelously well because they're tied to rapidly-growing markets in China, India and Brazil.

But the Average Worker economy on Main Street continues to wallow.

The Problem

Let's be clear about this. The problem is lack of sufficient demand for workers.

There are only four sources of demand. The biggest source is American consumers, who comprise about 70 percent of economic activity.

But the vast American middle and working class can't and won't buy enough to get people back to work. They're still under a huge debt load.

Even if and when they pay it off, their buying days are gone. The Great Recession took away their last means of coping with years of stagnant wages - going deeper into debt by using their homes as collateral. The housing bubble burst, and home prices continue to drop.

The second source of domestic demand is business. But businesses won't hire more workers without more customers.

(Republican supply-siders say businesses are not hiring because they're uncertain about the effects of the new healthcare law and don't know how much taxes they'll have to pay. This is political claptrap. Supply-siders also say businesses would start hiring if their taxes were lower. But businesses are sitting on almost a trillion dollars of cash. They don't need lower taxes in order to hire more Americans. They need more American customers.)

The third source of domestic demand is net exports. But they're going nowhere. Although China, India and Brazil are buying goods and services from American companies - and thereby boosting US profits - those US companies are making most of what they sell there in those countries. GM is selling more cars in China than in the US now, and manufacturing them in China.

That leaves the fourth source of domestic demand - government. But it's not nearly filling the gap. To the contrary, state and local governments are broke, and are cutting spending and raising taxes to the tune of over $110 billion this year. The federal government's much-maligned stimulus is about gone (almost all economists believe it saved over 3 million jobs).

The Fed is pumping $600 billion into the economy, but without an expansive fiscal policy this is only fueling speculation.

Instead, austerity and deficit reduction are the new buzz-words in Washington, as well as in Europe - which is absurd given what's happening to the economy.

Republicans won't even vote to extend unemployment benefits for the record number of Americans - almost half the unemployed - who have been out of work for six months or more. Starting today, 800,000 of the long-term unemployed lose their benefits. Unless Congress moves quickly, by the end of December, 2 million more will lose them.

What Must Be Done

Extend unemployment benefits. Not only do unemployment benefits help families who are hurting; they also put money into their pockets that they'll then spend - and their spending will keep other Americans in jobs.

I was on television yesterday debating a Republican who insisted unemployment benefits deter the jobless from finding work. Another partisan bromide. When, as now, five people are out of work for every job opening - and when, as now, unemployment benefits in most states are a small fraction of someone's former wage - it's bizarre to argue that unemployment benefits are causing unemployment.

Create a new WPA and National Infrastructure Bank. Not only do we need extended unemployment benefits. We need a new WPA, modeled after the WPA of the Great Depression, to put jobless Americans to work. We need a national infrastructure bank to rebuild our crumbling highways and water and sewer systems, thereby putting additional people back to work.

Cut payroll taxes and enlarge the EITC. We should exempt the first $20,000 of income from the payroll tax, thereby putting more money into the pockets of lower-wage workers - which they'll spend. We should extend the Earned Income Tax Credit - a wage subsidy - upward through the middle class, and reduce taxes on everyone up to $80,000 of income.

How to pay for this. Not in 70 years has so much of the nation's income been at the very top. Pay for all of this with a 2% surcharge on incomes between $1 million and $2 million, a 3% surcharge on incomes between $2 million and $5 million, and a 5% surcharge on all incomes over $5 million. Add in a .5 percent transaction tax on all financial transactions.

Why Would Republicans and Conservative Dems Ever Agree?

They'll agree to measures like this when they understand that our choice is either such reforms or continued economic stresses for millions of American families - stresses that will translate into an ever angrier and more divisive politics.

(When I wrote my new book, "Aftershock," I hoped what I saw unfolding would not become the new reality. It is.)

They'll agree when they see that we can not go back to the old "normal" of an unprecedented concentration of income and wealth at the top, because that old normal got us into the present fix.

It undermines the purchasing power of the rest of America. It invites speculation on Wall Street.

And it translates into extraordinary political power of a moneyed elite hell-bent on gaining even more power and wealth, and preventing the rest of America from flourishing.

But why would this moneyed elite ever agree? They'll agree when they understand this is a lousing strategy even for them.

Those at the top would do better with a smaller share of a booming economy that elicits a positive politics, than they will do with an ever-larger share of an anemic economy that fuels the politics of anger.

They should convey this message to their bought-for representatives in Congress.

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Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including "The Work of Nations," "Locked in the Cabinet," "Supercapitalism" and his latest book, "AFTERSHOCK: The Next Economy and America's Future." His 'Marketplace' commentaries can be found on publicradio.com and iTunes.

Bomb the enemy "back into the stone age": Familiar military hubris befitting the Federal Government's evident intention to financially squeeze the 50 states back into the stone age.

Natalie Bartling stands beneath the streetlight she petitioned to have put on her residential street five years ago in the city of Colorado Springs.

August 8, 2010

America Goes Dark

By PAUL KRUGMAN

The lights are going out all over America — literally. Colorado Springs has made headlines with its desperate attempt to save money by turning off a third of its streetlights, but similar things are either happening or being contemplated across the nation, from Philadelphia to Fresno.

Meanwhile, a country that once amazed the world with its visionary investments in transportation, from the Erie Canal to the Interstate Highway System, is now in the process of unpaving itself: in a number of states, local governments are breaking up roads they can no longer afford to maintain, and returning them to gravel.

And a nation that once prized education — that was among the first to provide basic schooling to all its children — is now cutting back. Teachers are being laid off; programs are being canceled; in Hawaii, the school year itself is being drastically shortened. And all signs point to even more cuts ahead.

We’re told that we have no choice, that basic government functions — essential services that have been provided for generations — are no longer affordable. And it’s true that state and local governments, hit hard by the recession, are cash-strapped. But they wouldn’t be quite as cash-strapped if their politicians were willing to consider at least some tax increases.

And the federal government, which can sell inflation-protected long-term bonds at an interest rate of only 1.04 percent, isn’t cash-strapped at all. It could and should be offering aid to local governments, to protect the future of our infrastructure and our children.  [Blogger's emphasis]

But Washington is providing only a trickle of help, and even that grudgingly. We must place priority on reducing the deficit, say Republicans and “centrist” Democrats. And then, virtually in the next breath, they declare that we must preserve tax cuts for the very affluent, at a budget cost of $700 billion over the next decade.

In effect, a large part of our political class is showing its priorities: given the choice between asking the richest 2 percent or so of Americans to go back to paying the tax rates they paid during the Clinton-era boom, or allowing the nation’s foundations to crumble — literally in the case of roads, figuratively in the case of education — they’re choosing the latter.

It’s a disastrous choice in both the short run and the long run.

In the short run, those state and local cutbacks are a major drag on the economy, perpetuating devastatingly high unemployment.

It’s crucial to keep state and local government in mind when you hear people ranting about runaway government spending under President Obama. Yes, the federal government is spending more, although not as much as you might think. But state and local governments are cutting back. And if you add them together, it turns out that the only big spending increases have been in safety-net programs like unemployment insurance, which have soared in cost thanks to the severity of the slump.

That is, for all the talk of a failed stimulus, if you look at government spending as a whole you see hardly any stimulus at all. And with federal spending now trailing off, while big state and local cutbacks continue, we’re going into reverse.

But isn’t keeping taxes for the affluent low also a form of stimulus? Not so you’d notice. When we save a schoolteacher’s job, that unambiguously aids employment; when we give millionaires more money instead, there’s a good chance that most of that money will just sit idle.

And what about the economy’s future? Everything we know about economic growth says that a well-educated population and high-quality infrastructure are crucial. Emerging nations are making huge efforts to upgrade their roads, their ports and their schools. Yet in America we’re going backward.

How did we get to this point? It’s the logical consequence of three decades of antigovernment rhetoric, rhetoric that has convinced many voters that a dollar collected in taxes is always a dollar wasted, that the public sector can’t do anything right.

The antigovernment campaign has always been phrased in terms of opposition to waste and fraud — to checks sent to welfare queens driving Cadillacs, to vast armies of bureaucrats uselessly pushing paper around. But those were myths, of course; there was never remotely as much waste and fraud as the right claimed. And now that the campaign has reached fruition, we’re seeing what was actually in the firing line: services that everyone except the very rich need, services that government must provide or nobody will, like lighted streets, drivable roads and decent schooling for the public as a whole.

So the end result of the long campaign against government is that we’ve taken a disastrously wrong turn. America is now on the unlit, unpaved road to nowhere.