Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

News & Supplemental  

“Austerity” Equals Fascism, Part 2: A Kindler, Gentler T-4 Program

Greeks protesting the "Austerereich"

” . . . Other fields of activ­i­ties for the group [Nazi government in exile–fuehringsring]  were. . . . the ini­ti­a­tion of con­spir­a­cies in for­eign coun­tries on behalf of Ger­man indus­trial cartels. . . .”  ( “Nazi Circular Letter of 1950 [Madrid], quoted in The New Germany and the Old Nazis by T.H. Tetens.)

“Imagine for a moment that two decades ago, a newly unified Germany set out to take over the European Continent, as the previous unified Germany had tried and failed to do half a century earlier. This time it would use money, not guns, to accomplish the goal. . . ” (“As Europe’s Currency Union Frays, Conspiracy Theories Fly” by Floyd Norris; The New York Times; 06/15/2011.)

“‘Germany is our fatherland; Europe is our future,’ [German Chancellor Helmut] Mr. Kohl told the German Parliament. . . .” (“Kohl Says Monetary Line Aids Unity” by Craig R. Whitney; The New York Times; 9/26/1992.)

“. . . The Ger­mans have a clear plan of what they intend to do in case of vic­tory. . . . Germany’s plan is to make a cus­toms union of Europe, with com­plete finan­cial and eco­nomic con­trol cen­tered in Berlin. This will cre­ate at once the largest free trade area and the largest planned econ­omy in the world. . . . . . . As far as the United States is con­cerned, the plan­ners of the World Ger­man­ica laugh off the idea of any armed inva­sion. They say that it will be com­pletely unnec­es­sary to take mil­i­tary action against the United States to force it to play ball with this sys­tem. . . . Here, as in every other coun­try, they have estab­lished rela­tions with numer­ous indus­tries and com­mer­cial orga­ni­za­tions, to whom they will offer advan­tages in co-operation with Germany. . . .” (Dorothy Thompson, writing in The New York Herald Tribune, 5/31/1940; quoted in Germany Plots with the Kremlin by T.H. Tetens,; p. 92.)

“. . . The [FBI] file [on Martin Bormann] revealed that he had been bank­ing under his own name from his office in Ger­many in Deutsche Bank of Buenos Aires since 1941; that he held one joint account with the Argen­tin­ian dic­ta­tor Juan Peron, and on August 4, 5 and 14, 1967, had writ­ten checks on demand accounts in first National City Bank (Over­seas Divi­sion) of New York, The Chase Man­hat­tan Bank, and Man­u­fac­tur­ers Hanover Trust Co., all cleared through Deutsche Bank of Buenos Aires. . . . ” (Martin Bormann: Nazi in Exile by Paul Manning, p. 205.)

COMMENT: In the first part of this analysis, we looked at the Nazified Reagan/Bush I administrations, whose “austere” policies increased the U.S. national debt five-fold in twelve years, creating the foundation of the fiscal straits that engendered the propaganda line of the current GOP. The budgetary profligacy of Reagan/Bush I created the problem the Republicans claim they can, and should, solve. Before examining what the effects of GOP “austerity” might be, we would do well to consider to what extent the Third Reich alumni staffing Reagan/Bush I may have been consciously involved in one of the “. . . conspiracies in foreign countries on behalf of German cartels” described by T.H. Tetens above. With the Bormann organization maintaining Nazi Party command continuity and the Gehlen org maintaining a degree of German military command and control in the postwar period, the actions of the Reagan/Bush administrations may well have been just such a conspiracy. Bush II engaged in budgetary suicide as well, targeting social programs of the New Deal as “unaffordable.” This fiscal profligacy was a deliberate targeting of those programs and the New Deal.

Hartheim Euthanasia Center: GOP Headquarters, 2016?

The budgetary proposals of GOP Representative Ryan, endorsed by “The VerMITTler,” (Romney) will pull the trigger on those targeted programs. (“Vermittler” is the German word for “agent.”) The VerMITTler’s prospects for election may well hinge on the fate of the Euro, to be determined in considerable measure by a Germany that has steadfastly adhered to “austerity” as the [final] solution to economic difficulty. With the economy being the central consideration in this election and with the possibility that a Eurozone collapse could cause sufficient economic difficulty in the U.S. to bring about a Romney victory, a number of things should be taken into account:

  • In his oblique column on conspiracy theories about Germany and the Euro, Floyd Norris notes that German banks provided the loans that enabled the bubble which preceded and caused the fiscal crisis in the peripheral Eurozone countries. EXCERPT:  . . . German banks helped to finance housing bubbles in the periphery — usually not directly, but through loans to other banks. . . .
  • In that same column, Norris posits a possible German gambit, that may have been aided by the loans from German banks: EXCERPT: . . . Conceivably, Germany learned three things from the 1992 experience, and mapped out a course with those lessons in mind. First, absent fixed exchange rates, its export-oriented companies faced the risk of periodic competitive devaluations from the rest of Europe. . . . Second, a currency union could help German exports if the euro’s value were held down by less competitive economies. . . .
    Finally, if Germany adopted a low-interest-rate policy, and superlow rates arrived in European nations accustomed to high rates, banks could open the credit spigot and create a debt-financed boom in much of Europe. That would invite a mushrooming of imbalances. Ultimately, deeply indebted countries would face a crisis, one that they could solve only if they acquiesced to German policies and surrendered a large part of national sovereignty. . . .
  • With the large German banks under control of the Bormann capital network, the exigency hypothesized by Norris may well have been realized.
  • If Germany continues to insist on “austerity,” instead of rescuing the Euro countries, the resulting collapse could torpedo the U.S. economy and Obama.  EXCERPT OF LINKED ARTICLE: . . . Look at it this way: When Lehman Brothers went bankrupt in 2008, sending the global financial system into a tailspin, its debts amounted to about $600 billion. Government debt alone in Greece, Spain, Portugal and Ireland — the most vulnerable European countries — adds up to about $1.9 trillion. And the economies and government finances of most developed countries are in worse shape than they were four years ago. . . .
  • Job Creation, Austere -Style

    Paul Krugman has highlighted the continuity between the GOP and the Germans, noting that one of VerMITTler’s top economic advisers penned a piece in a leading German paper encouraging Merkel to “stay the course,” ignoring Obama’s advice and heading for catastrophe. EXCERPT OF LINKED COLUMN: . . . Actually, it’s kind of ironic. While Republicans love to engage in Europe-bashing, they’re actually the ones who want us to emulate European-style austerity and experience a European-style depression.And that’s not just an inference. Last week R. Glenn Hubbard of Columbia University, a top Romney adviser, published an article in a German newspaper urging the Germans to ignore advice from Mr. Obama and continue pushing their hard-line policies. In so doing, Mr. Hubbard was deliberately undercutting a sitting president’s foreign policy. More important, however, he was throwing his support behind a policy that is collapsing as you read this.
    In fact, almost everyone following the situation now realizes that Germany’s austerity obsession has brought Europe to the edge of catastrophe — almost everyone, that is, except the Germans themselves and, it turns out, the Romney economic team.
    Needless to say, this bodes ill if Mr. Romney wins in November. For all indications are that his idea of smart policy is to double down on the very spending cuts that have hobbled recovery here and sent Europe into an economic and political tailspin. . . .

  • The Federal Reserve has publicly expressed reticence to take to steps to stimulate the economy so as to avoid appearing to be helping the Obama campaign. Aside from the overt political pollution of the Fed’s position (it has been under fire from the Congressional GOP attack machine), this indicates how far afield we’ve gotten. The idea is to help the economy, the country and its citizens.
  • The GOP has been nakedly working to undermine Obama’s administration, rather like the CIA worked to undermine the Allende regime in Chile in the 1970’s. They do not hesitate to use deadly force, either.
  • If, for the sake of argument, Romney gets elected with a GOP majority in both houses of Congress–a distinct possibility with 23 Democratic and 10 Republican seats up for grabs in the Senate–what can we expect?
  • Paul Krugman informs us: EXCERPT: The really decisive evidence on government cuts, however, comes from Europe. Consider the case of Ireland, which has reduced public employment by 28,000 since 2008 — the equivalent, as a share of population, of laying off 1.9 million workers here. These cuts were hailed by conservatives, who predicted great results. “The Irish economy is showing encouraging signs of recovery,” declared Alan Reynolds of the Cato Institute in June 2010. But recovery never came; Irish unemployment is currently more than 14 percent. Ireland’s experience shows that austerity in the face of a depressed economy is a terrible mistake to be avoided if possible. . . .
  • With a passage of the GOP/Ryan budget proposals favored by The VerMITTler, an open assault on the New Deal, Social Security and Medicare is to be expected. If, for example the voucher system proposed by Ryan, et al is made law, many elderly and poor people will not be able to afford the medical care they need to survive. People will die. Poor folks, sick folks, old folks, weak folks. And that is just exactly the idea. People like that, when they vote at all, usually vote for the Democrats. GOP is brilliantly cynical in its approach to such matters.
  • When he became President in 1989, the elder Bush promised a “kinder, gentler” approach to government. In that same vein, we might view the  GOP program as a “kinder, gentler” euthanasia program, rather like the T-4 program undertaken by the Third Reich. That “War Against the Weak” was itself an outgrowth of eugenics ideology and practices that occupied a very important place in the hierarchy of Western political and sociological thinking
  • Underlying “austerity” is a Social Darwinism that is part of a continuum of social thought that produced the horrors of the camps. “Death instead of Taxes” might be one way of thinking about the situation.
  • Von Clausewitz would recognize the GOP/German-driven austerity as “war” by other means–in this case an annihilating “Postwar” that will accomplish what the T-4 program was intended to do–week out “the unfit.”
  • The effects of “austerity” on the United States will be similar to those in other places that embraced the “Irish doctrine” highlighted by Krugman above. We will experience the downward spiral stemming from job loss, cancelation of orders engendering further slowdown and other highly unpleasant symptoms of “austerity” disease.
  • This will dramatically weaken the United States.
  • One can but wonder to what extent The VerMITTler will be given the task of implementing and overseeing America’s final collapse.
  • It is doubtful that the master cynics of the GOP will sit back and allow the howls of outrage from unemployed, newly-poor and politically-jilted workers and voters derail their agenda at the midterm elections of 2014. Rather, I suspect we may see some “event”–a monster terrorist incident or manufactured disaster of some kind that would conveniently take the blame for economic problems. That disastrous event will also eclipse the disastrous social policies of Romney/Ryan that will have thrown people off the payrolls and unto unemployment lines. In this regard, the “event” will serve to distract, much as 9/11 served to obscure much of what the Bush administration was actually doing, as well as justifying “emergency measures.”

Discussion

36 comments for ““Austerity” Equals Fascism, Part 2: A Kindler, Gentler T-4 Program”

  1. http://frontpagemag.com/2012/06/19/mormons-have-irrational-beliefs-who-doesnt/
    In an article for the outlet Front Page Magazine – Mormons Have Irrational Beliefs? Who Doesn’t? – writer Dennis Prager gives us a preview of the coming era of irrationalism by way of contextualizing Romney’s far-right insanity within a larger global rejection of reason. Nazi doctrine explicitly rejects reason and embraces the irrational, placing political or even scientific practice on the same level as religious belief and continually intermixing all. Prager advocates ‘faith’, political and religious, since reason proves so feeble and uninspiring.

    Prager – “I read and hear these dismissals of Mormonism with some amusement — because everyone who makes these charges holds beliefs and/or practices that outsiders consider just as irrational.”

    The thrust of the article is that a reasonable path is not to be found and perhaps doesn’t exist, so one man’s craziness is no worse than any other’s, the important test being who wins. This is the core of Nietzsche’s nihilism and Superman philosophy.

    At bottom the extreme right-wing economists and pundits are as wearied by discussions of data or documentation as they are by arguments for morality. Power and reason do not mix well.

    Posted by Dwight | June 19, 2012, 7:37 am
  2. It’s not ALL bad out there on the economic front. At least there’s one group of workers out there that have managed to extract a bit more compensation for their efforts during the Great Recession even when their bosses opposed it. And according to experts, it’s this group’s ability to maintain competitive compensation packages that has probably played an important role in rebuilding the health of the US corporate sector. Sometimes, you see, the rule of “pay your employees as little as possible” that pervades the corporate sector doesn’t always apply:

    NY Times
    C.E.O. Pay Is Rising Despite the Din

    By NATHANIEL POPPER
    Published: June 16, 2012

    YOU call this a revolution?

    Probably the most-heard complaint about big business these days, one seemingly tailored for the 99 percent, is how much money corporate C.E.O.’s routinely pull down. Many ordinary Americans probably cheered when stockholders – that is, the people who actually own public companies – finally began to say, “Enough.”

    Yeah, well.

    Despite a lot of noise from shareholders and a few victories at big names like Citigroup and Hewlett-Packard, executive pay just keeps climbing.

    Yes, some corporate boards seem to be listening to shareholders, particularly on contentious issues like the seven-figure cash bonuses that helped define hyperwealth during the boom. Since the bust, corporate America on the whole has moved to tie executive pay more closely to long-term performance by skewing executive paychecks more toward restricted stock, which can’t be sold for years.

    But rewards at the top are still rich – and getting richer. Now that 2011 proxy statements have been filed, the extent of executive pay last year has finally become clear. Median pay of the nation’s 200 top-paid C.E.O.’s was $14.5 million, according to a study conducted for The New York Times by Equilar, a compensation data firm based in Redwood City, Calif. The median pay raise among those C.E.O.’s was 5 percent. (The full list is available here.)

    That 5 percent raise is smaller than last year’s. But it comes at a time of stubbornly high unemployment and declining wealth for many ordinary Americans. Even corporate pay experts say that this is hardly the kind of change that will quell anger over the nation’s have-a-lots by the have-lesses, particularly in an election year.

    “The bigger issues are there, still to be worked on, and those are the more difficult ones,” says Eleanor Bloxham, the chief executive of the Value Alliance, a firm in Westerville, Ohio, that consults on corporate pay. Corporations are changing pay practices, Ms. Bloxham says, but not enough: “There is too much hype and too little substance.”

    The latest list of the most richly rewarded executives expands on a preliminary survey Equilar put together for The Times in April, before many companies had submitted final regulatory filings for 2011. While the earlier study showed the median pay package rising 2 percent from 2010 to 2011, the final figures put the increase at 5 percent.

    Because the list includes only the C.E.O.’s of public companies, it does not capture the many billions that have been earned by top hedge fund managers and private-equity dealmakers in recent year. But even in the more narrow universe of public companies, the complete Equilar study shows that there was not one, but two executives who had nine-figure paydays last year – the first time that has ever happened, according to Aaron Boyd, Equilar’s head of research.

    David E. Simon, the top executive at the Simon Property Group, was the second-highest paid C.E.O. last year, with $137 million. He joined the exclusive nine-figure niche occupied by Timothy D. Cook, who succeeded Steve Jobs at Apple. Mr. Cook received a package valued at $378 million. The pay of both Mr. Simon and Mr. Cook were bolstered by one-time rewards that the companies said would not be repeated, and that are tied to future company performance.

    In Mr. Simon’s case, this was a stock package that will be distributed over eight years that was worth $132 million when granted last year. Like Mr. Cook’s bonus, it has already gained substantially in value.

    While Apple shareholders overwhelmingly approved Mr. Cook’s compensation, Simon Property investors lopsidedly rejected Mr. Simon’s pay package at the annual meeting in May, with 73.3 percent voting against it, according to Institutional Shareholder Services. But such votes aren’t binding. That means companies can do as they want, whatever shareholders say.

    The fact that there were votes at both companies shows the new power that investors have seized. Despite opposition from corporate America, the Dodd-Frank legislation mandated that public companies give shareholders a vote on compensation strategy at least once every six years. Last year brought the first onslaught of such say-on-pay votes, and this year 1,714 companies have already held them, says the consulting firm Semler Brossy. Among those, 45 companies’ pay strategies have been rejected by shareholders, up from 29 last year at this time.

    The votes have had immediate impact, pushing many corporate boards to explain to investors how they reached pay decisions, and influencing some companies to rein in golden parachutes like the ones Hewlett-Packard gave its last two chiefs.

    Ira T. Kay, a managing partner at the consulting firm Pay Governance, said companies had set “hard goals” for executives that explained why they “are so motivated to run these companies very well.” He gives these pay packages some credit for the performance of American corporations, which have recovered faster from the financial crisis than the overall economy. “Maybe it has caused some issues between the 1 percent and the 99 percent,” he said. “But it has certainly made for a very strong corporate sector in the U.S.”

    Still, the votes against the pay packages at companies like Simon Property also underline some of the hollowness of the shareholder initiatives. Investors get a vote on pay only after the numbers have been set by corporate boards. And, because the votes are nonbinding, they carry only the sting of possible embarrassment.

    After its meeting, Simon released a statement saying executives “value” shareholders’ input and that its compensation panel “will take their views into consideration as it reviews compensation plans.”

    MORE important, shareholder votes often take on companies where executive pay is out of line with industry norms. They don’t address the fact that even companies using the norms have raised C.E.O. pay faster than the wages of average employees.

    Charles M. Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware, said the sharp rise in executive pay was a result of the practice of setting C.E.O. compensation by looking at what other companies in the same industry are doing, then adding a bit. The additions are intended to ensure that executives stay put. The Simon Property Group said the bonus offered to Mr. Simon “is intended to ensure that one of America’s best C.E.O.’s will lead the company until at least 2019, when Mr. Simon will be 58 years of age, rather than pursuing other employment opportunities.”

    Mr. Kay, at Pay Governance, said critics of current C.E.O. pay underestimate the willingness of executives to leave their positions.

    “Could you pay them a little less?” he asked. “I think you could.” But he added: “You are dealing with board members that don’t want to lose their C.E.O., and they buy insurance by paying at the industry standard.”

    I’m pretty sure there’s a lesson in this about the direction of the economy. In the future, if you want a job, you had better provide a vital service the public needs. No more mooching.

    Posted by Pterrafractyl | June 19, 2012, 10:46 am
  3. Hmmmm….I think the cause is clear: Undercompenation. Me thinks some of JC Penny’s overseas suppliers are getting a little greedy.

    Seriously, for only $44 million a year who wouldn’t go Galt?

    Posted by Pterrafractyl | June 19, 2012, 2:04 pm
  4. Hey all you US residents lucky enough to make too little to qualify for income taxes, the gravy train is approaching its final destination:

    June 19, 2012 8:45 AM

    Mitch McConnell: Tax code already “extraordinarily progressive” and needs to be changed

    UPDATED 12:46 p.m. ET

    (CBS News) The United States tax code is already “extraordinarily progressive” and should be restructured, Senate Republican Leader Mitch McConnell said, noting that more than two-thirds of the money the government collects already comes from the wealthiest ten percent of taxpayers.

    In an interview that aired on “CBS This Morning” Tuesday, the Kentucky Republican said he is ready to sit down with “this president or the next president” and have an animated discussion about the tax code to “reach a conclusion” that would bring down the ballooning U.S. deficit.

    “Almost 70 percent of the federal revenue is provided by the top 10 percent of taxpayers now. Between 45 percent and 50 percent of Americans pay no income tax at all. We have an extraordinarily progressive tax code already. It is a mess and needs to be revisited again,” McConnell said in the interview, taped Monday.

    A “progressive” code increase tax rates as income increases.

    Florida Republican Gov. Jeb Bush caused a stir in Republican circles earlier this month when he told the House Budget Committee that he would have taken the hypothetical offer to increase taxes for a dollar of revenue if it came with $10 in spending cuts. Presumptive Republican nominee Mitt Romney said he would reject that offer in an interview with CBS’ “Face the Nation” over the weekend.

    McConnell said he willing to make a so-called “grand bargain” with the Democrats, but he said he “will not make a commitment in advance about what I will or won’t do.”

    “The issue of revenue, from our point of view, is tied to serious entitlement reform,” McConnell said, referring to changes to such federal benefit programs as Medicare, Medicaid and Social Security.

    An earlier version of this article said, “The United States tax code favors lower income Americans too much already and should be restructured to make it fairer to upper income earners, Senate Republican Leader Mitch McConnell said.” An aide to Sen. McConnell called to clarify that the Kentucky Republican has never called for lowering rates only on upper income Americans but said the code should be “simplified” and taxes should not increase on anyone.

    Posted by Pterrafractyl | June 20, 2012, 8:45 am
  5. Don’t you just love how our economic system is set up: US worker productivity is up, leading to a decline in hiring:

    Bloomberg
    Job Growth May Fizzle in U.S. as Productivity Gains: Economy
    By Alex Kowalski – Jun 20, 2012 4:10 PM CT

    The U.S. economy may be on the cusp of a pickup in productivity that will make it more difficult for Federal Reserve policy makers to reduce unemployment.

    After cooling throughout last year, worker output per hour will probably rise at around 1.5 percent, in line with its long- run trend, according to economists like Ellen Zentner and Robert Gordon. That means the lower-than-forecast payroll gains in May and April may be closer to the norm than the exception for the rest of the year as companies redouble efforts to improve efficiency.

    Payrolls will grow between 80,000 and 120,000 per month, less than this year’s 165,000 average, even as the economy expands by about the same 2 percent, estimates Zentner, a senior economist at Nomura Securities International Inc. Fed Chairman Ben S. Bernanke earlier this year aired his concern that hiring will subside without faster economic growth.

    “As the rate of productivity normalizes, businesses won’t need to hire as many workers,” said New York-based Zentner. “The level of job growth we’ve been getting over the past few months is probably pretty normal.”

    The Fed said today it will expand its program to replace short-term bonds with longer-term debt by $267 billion through the end of the year in a bid to reduce unemployment and protect the expansion.

    Employment Cools

    Employers in the U.S. added 69,000 workers to payrolls in May, the least in a year, lowering the average pace of job creation in 2012 to about 165,000, figures from the Labor Department show. Zentner projected a 95,000 increase, the second-lowest in a Bloomberg News survey of 87 economists, after taking into account a rebound in productivity.

    The jobless rate last month climbed to 8.2 percent from April’s 8.1 percent. It has held above 8 percent for 40 consecutive months, the longest stretch of such elevated levels in the post-World War II era.

    An uptick in efficiency would mark a reversal from last year and early 2011, when companies expanded payrolls even as economic growth cooled. Worker output per hour rose 0.4 percent in the year to March, compared with an average 2.5 percent gain in the six-year expansion that ended in December 2007.

    Labor costs adjusted for productivity rose 1.8 percent in 2011, the most in three years.

    The slowdown in productivity and increase in expenses occurred as companies brought headcounts in line with demand, correcting over-aggressive firings during the 2007-2009 recession, Gordon, a professor at Northwestern University in Evanston, Illinois, who’s researched the ebb and flow of U.S. productivity, said in an e-mail.

    Productivity Trend

    Productivity growth will return to a trend of 1.2 percent to 1.4 percent per year, which means job creation will be slower for any given pace of economic growth in the next year or two compared with 2010 or 2011, projected Gordon, also a member of the National Bureau of Economic Research committee that determines when recessions begin and end.

    His view echoes comments Bernanke made earlier this year during a speech that explored the reasons behind last year’s drop in unemployment. At the time of his speech, average job growth in the six months through February had been the strongest in almost six years. Meanwhile, gross domestic product had advanced 1.7 percent in 2011, almost half the pace of 2010.

    “What we may be seeing now is the flip side of the fear- driven layoffs that occurred during the worst part of the recession, as firms have become sufficiently confident to move their workforces into closer alignment with the expected demand for their products,” Bernanke said before the National Association for Business Economics on March 26.

    Productivity Focus

    Oracle Corp. (ORCL) wrapped up the bulk of its plans to enlarge its sales force in the past fiscal year and will focus on making those new workers more productive, Mark Hurd, co-president of the world’s second-largest software maker, said during a June 18 earnings call.

    “We are working to increase the productivity as we assimilate those people into the organization this year,” Hurd said. “We will still have adds in fiscal year 2013, but most of the hard work was done” a year earlier.

    While the productivity gains will reduce the need for labor in the short term, they will help create jobs in the future by enlarging the economy’s potential for growth, said Dean Maki, New York-based chief U.S. economist at Barclays Plc and a former Fed economist.

    “The old saying is a steam shovel replaces a hundred men digging with spoons,” Maki said. “You wouldn’t want to go back to a hundred men digging with spoons just to increase job growth.”

    After reading an article like this, I’m almost relieved that we don’t have Star Trek “replicators“(just think of the productivity gains all you newly unemployed people!). Great.

    Technology and the associated productivity gains are great…assuming the masses are allowed to participate in the benefits. That’s not always the case.

    Posted by Pterrafractyl | June 21, 2012, 2:07 pm
  6. What this guy said:

    Return to capitalism ‘red in tooth and claw’ spells economic madness

    Because capitalism fuels an insatiable demand for consumption, the world will soon run up against the natural limits of growth

    Robert Skidelsky
    guardian.co.uk, Thursday 21 June 2012 12.48 EDT

    As people in the developed world wonder how their countries will return to full employment after the global recession, it might benefit us to take a look at a visionary essay that John Maynard Keynes wrote in 1930, called Economic Possibilities for our Grandchildren (pdf).

    Keynes’s General Theory of Employment, Interest, and Money, published in 1936, equipped governments with the intellectual tools to counter the unemployment caused by slumps. In this earlier essay, however, Keynes distinguished between unemployment caused by temporary economic breakdowns and what he called “technological unemployment” – that is, “unemployment due to the discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour”.

    Keynes reckoned that we would hear much more about this kind of unemployment in the future. But its emergence, he thought, was a cause for hope, rather than despair. For it showed that the developed world, at least, was on track to solving the “economic problem” – the problem of scarcity that kept mankind tethered to a burdensome life of toil.

    Machines were rapidly replacing human labour, holding out the prospect of vastly increased production at a fraction of the existing human effort. In fact, Keynes thought that by about now (the early 21st century) most people would have to work only 15 hours a week to produce all that they needed for subsistence and comfort.

    Developed countries are now about as rich as Keynes thought they would be, but most of us work much longer than 15 hours a week, although we do take longer holidays, and work has become less physically demanding, so we also live longer. But, in broad terms, the prophecy of vastly increased leisure for all has not been fulfilled. Automation has been proceeding apace, but most of us who work still put in an average of 40 hours a week. In fact, working hours have not fallen since the early 1980s.

    At the same time, “technological unemployment” has risen. Since the 1980s, we have never regained the full employment levels of the 1950s and 1960s. If most people still work a 40-hour week, a substantial and growing minority have had unwanted leisure thrust upon them in the form of unemployment, under-employment and forced withdrawal from the labour market. And, as we recover from the current recession, most experts expect this group to grow even larger.

    What this means is that we have largely failed to convert growing technological unemployment into increased voluntary leisure. The main reason for this is that the lion’s share of the productivity gains achieved over the last 30 years has been seized by the well-off.

    And, beyond a certain point, it is also economic madness. This is not just or mainly because we will soon enough run up against the natural limits to growth. It is because we cannot go on for much longer economising on labour faster than we can find new uses for it. That road leads to a division of society into a minority of producers, professionals, supervisors, and financial speculators on one side, and a majority of drones and unemployables on the other.

    Apart from its moral implications, such a society would face a classic dilemma: how to reconcile the relentless pressure to consume with stagnant earnings. So far, the answer has been to borrow, leading to today’s massive debt overhangs in advanced economies. Obviously, this is unsustainable, and thus is no answer at all, for it implies periodic collapse of the wealth-producing machine.

    The truth is that we cannot go on successfully automating our production without rethinking our attitudes toward consumption, work, leisure, and the distribution of income. Without such efforts of social imagination, recovery from the current crisis will simply be a prelude to more shattering calamities in the future.

    Ah, techno-fascism: Both an ends AND a means. Now THAT’s some serious productivity!

    Posted by Pterrafractyl | June 21, 2012, 10:31 pm
  7. A comprehensive predictive mathematical model of capitalism is lacking ( no matter what the experts say ) because it is impossible to encode all that happens in a model. There are two major categories of profit and loss – private and public or private and social, if you prefer, in any economic process. Private profit usually shows up first and is much more easily measurable than public profit (or loss), which by its nature may be spread across time and the social spectrum in ways not so easy to measure. In contrast to counting private gain, dollarizing public loss or gain involves assigning finite value to things we non-sociopaths would wish to be of inestimable value ( human life and health, environment, etc. ) and so the task never really is done.

    Public profit or loss is just as real-world and concrete as private gain but this relative difficulty of measuring it allows some to consign the concept to fantasy, going so far as to insist that ‘the public’ is a non-existent abstraction. This is why gestalt economics will never, ever be a science and must be looked at as an ongoing political action.

    Fascism could be defined as the ideological drive to make private gain the only measure of public good, i.e. private gain is public gain or …apples is oranges. Placed in these terms it sounds absurd because it IS absurd but this fuzzy Rand-like thinking persists.

    Posted by Dwight | June 22, 2012, 12:31 pm
  8. @Dwight:
    Yep, our system is predicated on putting a price on the priceless and then commoditizing it. If it isn’t monetized it doesn’t matter. And when the priceless is priced, the lower the better because that means more potential for ‘profit’ and ‘profit’ is ‘good’. Money paid to employees are a ‘cost’ that must be kept as low as possible whereas the money flowing into the coffers of the ‘job creators’ in the ‘ownership class’ is seen as a ‘profit’ and maximizing that ‘profit’ is a systemic imperative. Workers right, animal rights, a social safety net? Those are ‘luxuries’ only appropriate for ‘wealthy’ countries and really just an unfortunate economic nuisance that must be maintained to keep the proles placated. Whatever value is placed on the priceless is viewed as an economic black hole. Well, ok, not always.

    Posted by Pterrafractyl | June 23, 2012, 11:24 pm
  9. Hey disabled kids, David Cameron has a modest proposal for you:

    Cameron’s big cut ‘idea’ will only backfire on the Tories

    Attacking the under-25s might help poll ratings for now, but the real causes of high housing benefit costs lie elsewhere

    Polly Toynbee
    guardian.co.uk, Monday 25 June 2012 16.00 EDT

    Behind in the polls, David Cameron cleaves to his one truly popular policy: cutting welfare. Pollsters say people want it cut even more. His speech hits every button, stirring up those on quite low incomes against those on very low incomes, dividing and ruling, distracting from the lifestyle of the rulers. With the rottweiler tendency on his backbenches growing restless, he throws them the vulnerable to chew on – all those luxuriating in the “culture of entitlement” on £71 a week unemployment pay. Politically, it works well – for now.

    A red mist of despair poured from children’s and disability charities, stunned at yet another assault on those they try to defend. Already the £18bn benefit cut is “without historical or international precedent,” according to the Institute for Fiscal Studies. Cameron’s 17 “ideas” may not all see the light of day, but another £10bn will be cut: housing benefit and US-style benefit time limits yield the big money.

    Few people realise that 88% of benefit cuts are still to come, with two thirds of disabled children to lose large sums. Housing benefit cuts, driving thousands of families miles from their homes and children from their schools, have only just begun. Without yet knowing the perverse effects of these cuts, with chaos about to engulf the Department for Work and Pensions on the work programme and universal credit, Cameron shoots from the hip.

    Posted by Pterrafractyl | June 26, 2012, 2:17 pm
  10. Are you sure austerity is so bad? Bertelsmann is highlighting the opinion of other experts.

    http://www.bertelsmann-stiftung.de/cps/rde/xchg/SID-63C9B450-2EB6226D/bst_engl/hs.xsl/nachrichten_112839.htm

    “Gütersloh / Kiel, 26/06/2012

    Euro Zone: Debt Reduction Requires Cutting Spending…..The countries in the euro zone that are suffering from a debt crisis need to make it their top priority to cut public spending.”

    And Bertelsmann has been promoting democracy with Angela Merkel in Brazil.

    “News Item
    Guetersloh, 17/06/2011

    Reinhard Mohn Prize Awarded to Brazilian Citizen Participation Project
    Chancellor Angela Merkel gives presentation speech…”

    http://www.bertelsmann-stiftung.de/cps/rde/xchg/bst_engl/hs.xsl/nachrichten_107768.htm

    Posted by GK | June 28, 2012, 8:07 pm
  11. Bedtimes in the future:
    Kid: Mommy, how did Europe become a fascist nightmare?
    Mom: No one went to bed on time and the von Clausewitz monster came and took over. Now go to sleep.

    Posted by Pterrafractyl | July 17, 2012, 10:42 pm
  12. That’s quite an admission:

    NY Times
    Euro’s Medicine May Be Making Greece’s Symptoms Worse
    By RACHEL DONADIO and SUZANNE DALEY
    Published: July 24, 2012

    ATHENS – Only a month after Greece installed a new government, the country is facing renewed peril. Its official lenders are signaling a growing reluctance to keep paying the bills of the nearly bankrupt nation, even as the government is seeking more leniency on the terms of its multibillion-euro bailout.

    Adding to the woes, there is little agreement within either side. The Greek government is itself a motley coalition of conservatives and Socialists, and the leaders of the European Commission, the International Monetary Fund and the European Central Bank, known as the troika, are increasingly divided among themselves. That is creating even more uncertainty as Greece and the rest of Europe head for yet another showdown, renewing doubts about how long Athens can remain within the euro zone.

    Even as fears mount in Europe about the rapidly worsening situation in Spain, Greece’s problems are far from solved. The president of the European Commission, José Manuel Barroso, is expected to make his first visit to Athens since 2009 on Thursday to meet with Prime Minister Antonis Samaras as the troika begins yet another assessment of how well the country has complied with a spate of harsh austerity measures imposed as the price for loans. Greece’s lenders say they will not finance the country any further unless it meets its goals. But many experts say that the targets were never within reach and that pushing three increasingly weak Greek governments to comply has only profoundly damaged the economy.

    We knew at the fund from the very beginning that this program was impossible to be implemented because we didn’t have any – any – successful example,” said Panagiotis Roumeliotis, a vice chairman at Piraeus Bank and a former finance minister who until January was Greece’s representative to the International Monetary Fund. Because Greece is in the euro zone, he noted, the nation cannot devalue its currency to help improve its competitiveness as other countries subject to I.M.F. interventions almost always are encouraged to do.

    At the same time, Mr. Roumeliotis and others note, the troika underestimated the negative effect its medicine would have on the Greek economy.

    So the guy that was Greece’s representative at the IMF admits that they knew the austerity regime was impossible from the very beginning but also asserts the troika underestimated the negative effect it’s “medicine” would have on the Greek economy. Ok….

    Posted by Pterrafractyl | July 25, 2012, 10:57 am
  13. They’re baaaack:

    Bloomberg
    The Men in Black Are Back in Athens to Check the Books
    By Ben Vickers | July 26, 2012 4:04 AM EDT

    The men in black are back in Athens. Greece is hosting members of the so-called Troika, representatives from the euro zone, the European Central Bank and the International Monetary Fund, who are there to assess how far the country may have strayed from the terms of its bailout package.

    The government plans to cut pensions, reduce healthcare spending and renew the emphasis on privatizations, according to Kathimerini. The government yesterday named Takis Athanasopoulos, a former Toyota Motor Corp. executive and chairman and chief executive officer of Public Power Corp., as head of the state asset sales unit. He replaces Costas Mitropoulos, who had been in the job a year and resigned on July 20, citing a lack of support from Samaras’s government and saying it’s “unlikely” more than 300 million euros will be raised this year. The target was to raise 3 billion euros in 2012.

    Still, that won’t be the limit of the discussions. Greece may well be seeking some slack to ease the bailout conditions, although the rules governing the package are tight. Any extension to their fiscal adjustment plan would be considered debt restructuring, government spokesman Simos Kedikoglou said yesterday.

    More austerity measures in some quarters may allow for more easing in others. The minimum wage was lowered to 585 euros a month in February, and could be cut further, El Pais reports, although Labor Minister Ioannis Vroutsis is opposed to this. More likely are cuts for those who receive the largest state payouts, such as a cap on the highest pensions. And the main issue will be privileges that have accumulated over the years and remain in place. Kathimerini listed some proposed cuts that point again at the complexity of the Greek state benefits system:

    Posted by Pterrafractyl | July 26, 2012, 8:40 am
  14. At least Europe might be about half way through its lost decade. Well, half way through at best:

    Bloomberg
    Euro-Area Economic Adjustment Only Half Complete, Moody’s Says
    By Ben Sills – Aug 20, 2012 11:00 PM CT

    Euro-area peripheral nations are “at best” halfway through correcting the economic imbalances that helped cause the debt crisis and must press on with structural reforms, Moody’s Investors Service said.

    “Adjustments, both in the periphery and the core, have already taken place — in some cases, to a significant degree,” Moody’s analysts including by Sovereign Chief Economist Lucio Vinhas de Souza in New York said in a report published today. The process “is at best only half complete.”

    Policy makers in the struggling nations of Europe’s periphery are trying to rewire their economies to generate the growth they need to pay their debts. The European Union and the International Monetary Fund have pledged at least 393 billion euros ($485 billion) in aid to Greece, Ireland, Portugal and Spain to help them pay their bills while they implement reforms.

    While Moody’s noted progress in some countries’ trade balances and labor competitiveness, it said that governments cannot ease back on the pace of reform. The report didn’t mention the credit ratings of any nations.

    “A comparison with the crises faced by Sweden and Finland in the 1990s shows that the complete unwinding of the periphery countries’ accumulated imbalances –- which were due to the dis- saving behavior in their respective domestic private sectors rather than their governments –- may still take several years,” Moody’s said. “The comparison also reinforces the critical importance of structural reforms for the achievement of sustainable gains.”
    Adjustment Progress

    Among the adjustment successes so far, Spanish labor costs have dropped 5.9 percent from their peak, while those in Greece and Ireland have fallen 7.8 percent and 13.7 percent, respectively, helping to support exports and sustain economic output as their governments cut spending at home, Moody’s said. Italy has so far failed to narrow its trade deficit, bring down labor costs or boost competitiveness relative to its euro-area partners, it said.

    Moody’s said that most of the gains in competitiveness have been achieved by companies sustaining production even as they reduce staff numbers.

    “Competitiveness gains in the euro area periphery seem to have come about as a result of improvements in productivity that relied mostly on employment falling faster than output,” the analysts said.

    Yes, the “competitiveness gains” in the ailing eurozone economies seem to have come about mostly from “employment falling faster than output”. In other words, the key strategy employed by the ailing eurozone countries to make their economies more “competitive” and get their economies back on track has been mass layoffs. And this is all in order to rebalance the “imbalances” that caused the debt crisis, according to Moody’s. Huh, I didn’t realize that the solution to the imbalances caused by a housing bubble was mass public sector layoffs and divestments in health and education. That seems like an undoubleplusgood solution to the bursting housing bubbles that caused the debt crises but I’m sure our wise elders know better.

    Posted by Pterrafractyl | August 21, 2012, 9:05 am
  15. The latest grand new idea by Greece’s international lenders: 6-day work weeks:

    5 September 2012 Last updated at 08:40 ET
    BBC
    Longer working week suggested for Greece

    Greece’s international lenders have suggested measures including increasing the maximum working week to six days.

    It is one of several unofficial proposals to liberalise the labour market and increase government revenue, contained in a paper seen by the BBC.

    The proposals were not included in the original bailout agreement signed with the Greek government.

    Inspectors from the EU, IMF and European Central Bank, known as the troika, are due in Greece this week.

    They are writing a report, due in October, that will decide whether Greece receives its next instalment of bailout funds.

    Greece needs the next payment of 31.5bn euros ($39.6bn; £24.9bn) to allow it to continue servicing its debts.

    Proposals in the document from the troika included:

    Setting a single rate statutory minimum wage
    Reducing regulatory burdens
    Making work schedules more flexible
    Setting a minimum daily rest of 11 hours
    Eliminating restrictions on the minimum and maximum time between morning and afternoon shifts.

    Ooo…a minimum daily rest of 11 hours! Sweet! That means work 13-hours a day, 6 days a week! That should fix everything in no time at all.

    Of course, one more day of work and one less day of rest might end up putting an additional burden on Greece’s healthcare system, but there are ways to deal with issues like that.

    Posted by Pterrafractyl | September 5, 2012, 10:32 am
  16. “Of course, the idea at this stage isn’t to rescue Greece. It is to provide an abject lesson to any other country which in the future considers flouting the country’s perverse rules. ” Yep:

    The euro zone can still blow up even after unlimited purchases
    by Marshall Auerback / on 5 September 2012 at 20:51 /

    There appears to be an emerging consensus that the euro will survive, especially now that Mario Draghi has apparently grasped the nettle and persuaded his colleagues that the ECB is prepared to initiate unlimited purchases of national government bonds in order to underwrite their solvency. Of course, as usual with the ECB, there’s a sting in the tail, the sting being additional “conditionality” (for which one can read more fiscal austerity) as a quid pro quo. It’s like dealing with Hannibal Lecter.

    Greece is the implied fate of anybody who dares to flout the rules. Maybe the country isn’t washed down with a Chianti and some fava beans, but it’s getting pretty close. And whilst nobody wants to appear to be the triggerman who finally kills off Greek membership in the currency union, the country is increasingly being placed in an untenable position, which will almost certainly set it up for future failure.

    The problem is that the currency union is only as strong as its weakest link. Lopping off the weakest part of the Eurozone is not akin to removing a cancerous lesion from an otherwise healthy body, but more like the puncturing of an important blood vessel, which could well destroy the patient. True, Greece has been historically ridden with corruption and tax evasion (a recent report from the organisation, “Global Financial Integrity” – suggests that the Greek economy lost US$261 billion to crime, corruption, and tax evasion from 2003-2011).

    But the country has more recent made strenuous efforts to cut its deficit is by cutting public sector wages and pensions, a step that has exacerbated the size of its public deficits by decreasing incomes and employment. Were Greece to leave the Eurozone, it is almost certain that speculators would move to pick off another member country—Portugal, Italy, or Spain— all of which could face the same metaphoric fate as Hannibal Lecter’s victims. And so it goes.

    Of course, the idea at this stage isn’t to rescue Greece. It is to provide an abject lesson to any other country which in the future considers flouting the country’s perverse rules. According to a recent report in the Guardian, the eurozone creditors are now saying the Greek government must tighten the universal neoliberal screws even further by imposing a six day work week and perhaps reducing wages as well, as a condition for the Greeks getting another “bailout.” Of course, unemployment and underemployment in Greece are rising rapidly, so it is hard to see how extending the work week for the already employed can be the kind of “tough love” that will create an increase in the total number of jobs or improve the economy. In the creditor’s eyes, however, that is unimportant; the real problem is Greece’s dysfunctional culture of work and profligacy.

    So the neoliberal policy solution for turning around the Greek economy is to improve the culture of work is to introduce a kind of debt peonage by taking the Greeks back to the 19th Century. And what happens when the six-day work week and wage reductions do not work, as they inevitably won’t? What comes next? Charles Dickens knew the answer — improve the culture of work by relaxing child labour laws to reduce wages further and/or privatize the Aegean islands, Delphi, and the Acropolis. No problem.

    The problem is that the renewed bond buying will be tied to the conditionality of yet more fiscal austerity, and Greece is being held up as the poster boy of what happens when you don’t comply with the conditions laid out by the ECB, or the Troika. In addressing the solvency issue, the ECB’s conditionality ironically will make the very “problem” of fiscal profligacy and higher government deficits much worse, as demand gets crushed by yet more austerity. In effect, one is left with the Scylla of a quick death via exit from the euro zone, or the Charybdis of death via slow strangulation of aggregate demand via the fiscal austerity conditionality laid out by Mario Draghi today. Pick your fate.

    “Pick your fate”. Nice. The eurozone is now a choose-your-own-adventure book with no happy endings:

    Spain’s Rajoy to seek German backing for a bailout

    Tue Sep 4, 2012 7:57pm IST

    * Spain unwilling to ask for help without German support

    * France pushes Spain to request aid by October

    * Germany wants more details on Spanish banks, regions

    By Fiona Ortiz

    MADRID, Sept 4 (Reuters) – Prime Minister Mariano Rajoy’s eight months in power have been tumultuous from the start but September and October may be even tougher, with the S p anish leader assailed on all sides.

    Internationally he is caught between diverging pressures from Germany and France, and at home he faces protests over spending cuts sought by the euro zone’s big powers.

    France wants Rajoy to request an international bailout to prop up Spanish finances and stop the debt crisis deepening.

    But he is unwilling to ask for aid until he is sure of support from euro zone paymaster Germany which he will seek on Thursday at a meeting with Chancellor Angela Merkel.

    “The worst thing that could happen is Spain asks for aid and Germany blocks it,” said a senior European diplomat.

    NO EXCEPTIONS

    Spain and the euro zone are already in talks over the terms of sovereign aid. But Rajoy told European newspapers this week that Spain is doing so many reforms that it should not have to do any more in exchange for new money.

    Rajoy wants any fresh terms tacked onto the existing Spanish-EU agreement for the bank rescue and does not want a new memora ndum o f understanding, said the source who was briefed on the meeting with Hollande last week.

    But his European partners are taking a tough line.

    “There will be no exception made for Spain,” Michael Meister, vice-chairman of Merkel’s conservatives in the Bundestag lower house, told Reuters. “If such a request is made… there will need to be an agreement on the conditionality of the assistance, as in all previous cases.”

    With German Central Bank President Jens Weidmann opposed Draghi’s plan to buy Spanish and Italian bonds, the ECB boss is under pressure to attach strong conditions.

    Finnish Prime Minister Jyrki Katainen, one of the most hardline euro zone voices on conditions for bail-outs, is next in line to visit Rajoy, on Sept. 11.

    Posted by Pterrafractyl | September 6, 2012, 12:23 pm
  17. Heh, I’m pretty sure the answer is ‘Yes, he’s already done it’:

    Washington Post
    Can ECB President Mario Draghi reshape Europe?

    By Howard Schneider, Published: September 5

    European history is marked by geopolitical watersheds, mostly involving generals and kings.

    Are central bankers about to join the list?

    When European Central Bank President Mario Draghi holds his monthly briefing Thursday, he is expected to announce details of a new effort to tackle the euro zone’s ongoing financial crisis — and potentially push Europe closer toward the economic and political union that has been the region’s ambition since World War II.

    I’m also pretty sure an ambition to create a unified European economic union that is effectively run out of Berlin predates WWII.

    Posted by Pterrafractyl | September 6, 2012, 10:08 pm
  18. …just a reminder for the economically challenged – the free market logic that insists on incremental destruction of labor rights has no point of arrival wherein it is ‘satisfied’ that labor costs are low enough. This is true for both theory and in the person of the fascist employer. Both plantation slavers and death camp administrators were well known for their constant fretting at the pennies of energy or resources expended on their inmates.

    The only limiting factor in this race to the bottom is a moral line drawn in the sand which we keep erasing and redrawing.

    Posted by Dwight | September 9, 2012, 3:41 am
  19. And here we go again:

    Financial Times
    Last updated: September 20, 2012 10:16 pm
    Italy slashes growth forecast for 2012

    By Giulia Segreti in Rome and James Fontanella-Khan in Brussels

    The Italian government has slashed its economic growth forecast for 2012, saying the eurozone’s third largest economy is now heading for a contraction of 2.4 per cent, twice as deep as it previously estimated.

    Rome also revised sharply upwards its predicted public deficit for this year from 1.7 per cent of gross domestic product to 2.6 per cent, and from 0.5 per cent to 1.8 per cent in 2013, underlining how tough austerity measures have made fiscal consolidation more difficult to achieve.

    It predicted the economy would continue to shrink next year, by 0.2 per cent, rather than grow by a modest 0.5 per cent.

    Speaking after a meeting of his cabinet, Mr Monti said he expected the eurozone’s third largest economy to recover in the second half of 2013 and to pick up speed in 2014, partly due to structural reforms implemented by his technocratic government.

    Rome still expects to record a zero deficit in 2013 in structural terms, once the effects of the economic cycle have been stripped out.

    The accelerated slowdown in the eurozone was driven by France, the bloc’s second-largest economy, which suffered the steepest drop in new business in 41 months, whereas Germany showed signs of recovery.

    There were also further signs of weakness in the eurozone periphery. Ireland recorded zero growth in gross domestic product in the second quarter as lower consumer, capital and government spending weighed on the economy.

    The only sign of relief came from Germany as the composite PMI rose to 49.7 in September compared with 47 in August. The rise came as the services sector, an important indicator of economic performance, expanded for the first time since July, offsetting a contraction in manufacturing output.

    Posted by Pterrafractyl | September 20, 2012, 10:40 pm
  20. OMFG:

    Spain braced for further austerity as Madrid prepares for bailout

    Budget and reform programme to be unveiled on Thursday to feature more spending cuts, tax increases and pension freezes

    Giles Tremlett in Madrid
    The Guardian, Sunday 23 September 2012 12.46 EDT

    Recession-hit Spaniards will this week be told to swallow yet more austerity as the government prepares a fresh round of reforms and another budget filled with spending cuts and tax increases that will allow it to seek a bailout from eurozone partners.

    Pension freezes are also expected to form part of a raft measures to prepare the way for the European Central Bank (ECB) to give Spain support to control borrowing costs that will eat up a large chunk of next year’s budget.

    The budget is to be announced on Thursday, alongside the reform programme. Neither seemed likely to contain measures to immediately ease Spain’s chronic 25% unemployment, which some analysts expect will rise to 26.5% next year.

    Spain’s leadership has become disturbingly analogous to an autoimmune disorder.

    Posted by Pterrafractyl | September 24, 2012, 7:03 am
  21. When will the world finally learn that simple lesson that if you want a truly successful, happy, healthy, and – most importantly – competitive society you need to purge it of any and all extravagant luxuries (for the rabble) like like burying the dead:

    Greek poverty so bad families ‘can no longer afford to bury their dead’

    Second general strike in less than a month takes place amid latest round of draconian measures

    Helena Smith in Athens
    The Guardian, Thursday 18 October 2012

    Vanna Mendaleni is a middle aged Greek woman who until now has not had vehement feelings about the crisis that has engulfed her country. But that changed when the softly spoken undertaker, closing her family-run funeral parlour, joined thousands of protesters on Thursday in a mass outpouring of fury over austerity policies that have plunged ever growing numbers of Greeks into poverty and fear.

    “After three years of non-stop taxes and wage cuts it’s got to the point where nothing has been left standing,” she said drawing on a cigarette. “It’s so bad families can no longer afford to even bury their dead. Bodies lie unclaimed at public hospitals so that the local municipality can bury them.”

    As Greece was brought to a grinding halt by its second general strike in less than a month, Mendaleni wanted to send a message to the Greek prime minister, Antonis Samaras, and other EU leaders meeting in Brussels.

    “We once had a life that was dignified. Now the country has gone back 50 years and these politicians have to be made aware that enough is enough.”

    Greek demonstrations are not now marked by the vehemence or violence of the mass protests that occurred when Europe’s debt drama erupted in Athens, forcing the then socialist government to announce pay and pension cuts, tax increases and benefit losses that few had anticipated. Anger and bewilderment have been replaced by disappointment and despair.

    For the vast majority of those who took to the streets, the tipping point could be the latest round of austerity measures being demanded of the debt-stricken country in return for the international rescue funds it so desperately needs to keep bankruptcy at bay.

    Under intense pressure from international creditors at the EU and IMF, Samaras’ fragile coalition has been forced to draw up a draconian package of spending cuts worth €13.5bn – the price of a whopping €31.5bn loan instalment that is already four months overdue. Officials have suggested the burden will fall on society’s most vulnerable with pensioners and low-income Greeks once again having to make the biggest sacrifices.

    “After nearly 50 years of work and paying into an expensive pension fund, I have been forced to retire on €1,000 a month and if they pass these measures it will be even less,” said 60-year-old Nikos Xeros, who until this year had repaired ships since the age of 16. “It’s like having a noose about your neck that is getting ever tighter. The next time I come out to demonstrate it’s going to be with a gas mask and a big wooden club.”

    Law enforcement officials cut off access to Syntagma Square – home of the Greek parliament – before protesters could reach it, stoking widespread fury on Thursday. For some it was evidence of the mounting fears that parliament could be stormed.

    “Greeks are becoming increasingly conscious … and it was especially noticeable that the main slogan today was ‘the time has come to overthrow these polices’,” said Tania Karayiannis of the union of civil servants. As many as 80,000 people participated in the protests in Athens alone, she said. “The political leadership of this country should not underestimate that. If they don’t take our opposition seriously they will bear historic responsibility for the disintegration of Greece’s social fabric and the developments that will surely follow.”

    And speaking of “the disintegration of Greece’s social fabric and the developments that will surely follow”… oh look, there’s some disintegrating social fabric right over there. Plus some torture. By the police:

    Greek anti-fascist protesters ‘tortured by police’ after Golden Dawn clash

    Fifteen people arrested in Athens says they were subjected to what their lawyer describes as an Abu Ghraib-style humiliation

    Maria Margaronis in Athens
    guardian.co.uk, Tuesday 9 October 2012 08.08 EDT

    Fifteen anti-fascist protesters arrested in Athens during a clash with supporters of the neo-Nazi party Golden Dawn have said they were tortured in the Attica General Police Directorate (GADA) – the Athens equivalent of Scotland Yard – and subjected to what their lawyer describes as an Abu Ghraib-style humiliation.

    Members of a second group of 25 who were arrested after demonstrating in support of their fellow anti-fascists the next day said they were beaten and made to strip naked and bend over in front of officers and other protesters inside the same police station.

    Several of the protesters arrested after the first demonstration on Sunday 30 September told the Guardian they were slapped and hit by a police officer while five or six others watched, were spat on and “used as ashtrays” because they “stank”, and were kept awake all night with torches and lasers being shone in their eyes.

    Some said they were burned on the arms with a cigarette lighter, and they said police officers videoed them on their mobile phones and threatened to post the pictures on the internet and give their home addresses to Golden Dawn, which has a track record of political violence.

    Golden Dawn’s popularity has surged since the June election, when it won 18 seats in parliament; it recently came third in several opinion polls, behind the conservative New Democracy and the leftwing party Syriza.

    Last month the Guardian reported that victims of crime have been told by police officers to seek help from Golden Dawn, who then felt obliged to make donations to the group.

    One of the two women among them said the officers used crude sexual insults and pulled her head back by the hair when she tried to avoid being filmed. The protesters said they were denied drinking water and access to lawyers for 19 hours. “We were so thirsty we drank water from the toilets,” she said.

    One man with a bleeding head wound and a broken arm that he said had been sustained during his arrest alleged the police continued to beat him in GADA and refused him medical treatment until the next morning. Another said the police forced his legs apart and kicked him in the testicles during the arrest.

    “They spat on me and said we would die like our grandfathers in the civil war,” he said.

    According to Charis Ladis, a lawyer for another of the protesters, the sustained mistreatment of Greeks in police custody has been rare until this year: “This case shows that a page has been turned. Until now there was an assumption that someone who was arrested, even violently, would be safe in custody. But these young people have all said they lived through an interminable dark night.

    Dimitris Katsaris, a lawyer for four of the protesters, said his clients had suffered Abu Ghraib-style humiliation, referring to the detention centre where Iraqi detainees were tortured by US soldiers during the Iraq war. “This is not just a case of police brutality of the kind you hear about now and then in every European country. This is happening daily. We have the pictures, we have the evidence of what happens to people getting arrested protesting against the rise of the neo-Nazi party in Greece. This is the new face of the police, with the collaboration of the justice system.”

    One of the arrested protesters, a quiet man in his 30s standing by himself, said: “Journalists here don’t report these things. You have to tell them what’s happening here, in this country that suffered so much from Nazism. No one will pay attention unless you report these things abroad.”

    You kind of have to wonder why there isn’t more open contempt for Merkel & Friends amongst the EU elites. After all, the eurozone didn’t have to take the Austrian-beatdown policy regime that threatens the entire “European Project” that the EU elites presumably endorse. But the EU did have to take that approach if the EU was going to have Berlin’s backing. So a continent of elites that could have simply gone down in history as the EU’s version of our standard awful 21st century elites are now poised to go down in history as the EU’s Vichy-crats. Yeah, sorry elites that might be a bit worried about their historic legacy. There were plenty of policy options that would have allowed the eurozone to address this and this without this or this. Children that follow the Pied Piper tend to get an awful lessons in harmony.

    Posted by Pterrafractyl | October 18, 2012, 10:40 pm
  22. When will the world finally learn that simple lesson that if you want a truly successful, happy, healthy, and – most importantly – competitive society you need to purge it of any and all extravagant luxuries (for the rabble) like like burying the dead:

    Greek poverty so bad families ‘can no longer afford to bury their dead’

    Second general strike in less than a month takes place amid latest round of draconian measures

    Helena Smith in Athens
    The Guardian, Thursday 18 October 2012

    Vanna Mendaleni is a middle aged Greek woman who until now has not had vehement feelings about the crisis that has engulfed her country. But that changed when the softly spoken undertaker, closing her family-run funeral parlour, joined thousands of protesters on Thursday in a mass outpouring of fury over austerity policies that have plunged ever growing numbers of Greeks into poverty and fear.

    “After three years of non-stop taxes and wage cuts it’s got to the point where nothing has been left standing,” she said drawing on a cigarette. “It’s so bad families can no longer afford to even bury their dead. Bodies lie unclaimed at public hospitals so that the local municipality can bury them.”

    As Greece was brought to a grinding halt by its second general strike in less than a month, Mendaleni wanted to send a message to the Greek prime minister, Antonis Samaras, and other EU leaders meeting in Brussels.

    “We once had a life that was dignified. Now the country has gone back 50 years and these politicians have to be made aware that enough is enough.”

    Greek demonstrations are not now marked by the vehemence or violence of the mass protests that occurred when Europe’s debt drama erupted in Athens, forcing the then socialist government to announce pay and pension cuts, tax increases and benefit losses that few had anticipated. Anger and bewilderment have been replaced by disappointment and despair.

    For the vast majority of those who took to the streets, the tipping point could be the latest round of austerity measures being demanded of the debt-stricken country in return for the international rescue funds it so desperately needs to keep bankruptcy at bay.

    Under intense pressure from international creditors at the EU and IMF, Samaras’ fragile coalition has been forced to draw up a draconian package of spending cuts worth €13.5bn – the price of a whopping €31.5bn loan instalment that is already four months overdue. Officials have suggested the burden will fall on society’s most vulnerable with pensioners and low-income Greeks once again having to make the biggest sacrifices.

    “After nearly 50 years of work and paying into an expensive pension fund, I have been forced to retire on €1,000 a month and if they pass these measures it will be even less,” said 60-year-old Nikos Xeros, who until this year had repaired ships since the age of 16. “It’s like having a noose about your neck that is getting ever tighter. The next time I come out to demonstrate it’s going to be with a gas mask and a big wooden club.”

    Law enforcement officials cut off access to Syntagma Square – home of the Greek parliament – before protesters could reach it, stoking widespread fury on Thursday. For some it was evidence of the mounting fears that parliament could be stormed.

    “Greeks are becoming increasingly conscious … and it was especially noticeable that the main slogan today was ‘the time has come to overthrow these polices’,” said Tania Karayiannis of the union of civil servants. As many as 80,000 people participated in the protests in Athens alone, she said. “The political leadership of this country should not underestimate that. If they don’t take our opposition seriously they will bear historic responsibility for the disintegration of Greece’s social fabric and the developments that will surely follow.”

    And speaking of “the disintegration of Greece’s social fabric and the developments that will surely follow”… oh look, there’s some disintegrating social fabric right over there. Plus some torture. By the police:

    Greek anti-fascist protesters ‘tortured by police’ after Golden Dawn clash

    Fifteen people arrested in Athens says they were subjected to what their lawyer describes as an Abu Ghraib-style humiliation

    Maria Margaronis in Athens
    guardian.co.uk, Tuesday 9 October 2012 08.08 EDT

    Fifteen anti-fascist protesters arrested in Athens during a clash with supporters of the neo-Nazi party Golden Dawn have said they were tortured in the Attica General Police Directorate (GADA) – the Athens equivalent of Scotland Yard – and subjected to what their lawyer describes as an Abu Ghraib-style humiliation.

    Members of a second group of 25 who were arrested after demonstrating in support of their fellow anti-fascists the next day said they were beaten and made to strip naked and bend over in front of officers and other protesters inside the same police station.

    Several of the protesters arrested after the first demonstration on Sunday 30 September told the Guardian they were slapped and hit by a police officer while five or six others watched, were spat on and “used as ashtrays” because they “stank”, and were kept awake all night with torches and lasers being shone in their eyes.

    Some said they were burned on the arms with a cigarette lighter, and they said police officers videoed them on their mobile phones and threatened to post the pictures on the internet and give their home addresses to Golden Dawn, which has a track record of political violence.

    Golden Dawn’s popularity has surged since the June election, when it won 18 seats in parliament; it recently came third in several opinion polls, behind the conservative New Democracy and the leftwing party Syriza.

    Last month the Guardian reported that victims of crime have been told by police officers to seek help from Golden Dawn, who then felt obliged to make donations to the group.

    One of the two women among them said the officers used crude sexual insults and pulled her head back by the hair when she tried to avoid being filmed. The protesters said they were denied drinking water and access to lawyers for 19 hours. “We were so thirsty we drank water from the toilets,” she said.

    One man with a bleeding head wound and a broken arm that he said had been sustained during his arrest alleged the police continued to beat him in GADA and refused him medical treatment until the next morning. Another said the police forced his legs apart and kicked him in the testicles during the arrest.

    “They spat on me and said we would die like our grandfathers in the civil war,” he said.

    According to Charis Ladis, a lawyer for another of the protesters, the sustained mistreatment of Greeks in police custody has been rare until this year: “This case shows that a page has been turned. Until now there was an assumption that someone who was arrested, even violently, would be safe in custody. But these young people have all said they lived through an interminable dark night.

    Dimitris Katsaris, a lawyer for four of the protesters, said his clients had suffered Abu Ghraib-style humiliation, referring to the detention centre where Iraqi detainees were tortured by US soldiers during the Iraq war. “This is not just a case of police brutality of the kind you hear about now and then in every European country. This is happening daily. We have the pictures, we have the evidence of what happens to people getting arrested protesting against the rise of the neo-Nazi party in Greece. This is the new face of the police, with the collaboration of the justice system.”

    One of the arrested protesters, a quiet man in his 30s standing by himself, said: “Journalists here don’t report these things. You have to tell them what’s happening here, in this country that suffered so much from Nazism. No one will pay attention unless you report these things abroad.”

    You kind of have to wonder why there isn’t more open contempt for Merkel & Friends amongst the EU elites. After all, the eurozone didn’t have to take the Austrian-beatdown policy regime that threatens the entire “European Project” that the EU elites presumably endorse. But the EU did have to take that approach if the EU was going to have Berlin’s backing. So a continent of elites that could have simply gone down in history as the EU’s version of our standard awful 21st century elites are now poised to go down in history as the EU’s Vichy-crats. Yeah, sorry elites that might be a bit worried about their historic legacy. There were plenty of policy options that would have allowed the eurozone to address this and this without this or this. Children that follow the Pied Piper tend to get an awful lesson in harmony.

    Posted by Pterrafractyl | October 18, 2012, 10:42 pm
  23. The European Central Bank – the same ones currently demanding that Greece gut its health care for the unemployed – want you to know that they just couldn’t agree to “take a haircut” on Greece’s growing debt problem (which would force Greece’s international lenders to reduce Greece’s debt burden) because this would constitute “indirect state financing” and “indirect state financing”, as we all know, is a moral abomination. Fortunately, the alternative policy solutions to that moral abomination are totally ethically OK:

    NY Times
    Amid Cutbacks, Greek Doctors Offer Message to Poor: You Are Not Alone

    By LIZ ALDERMAN
    Published: October 24, 2012

    ATHENS — As the head of Greece’s largest oncology department, Dr. Kostas Syrigos thought he had seen everything. But nothing prepared him for Elena, an unemployed woman whose breast cancer had been diagnosed a year before she came to him.

    By that time, her cancer had grown to the size of an orange and broken through the skin, leaving a wound that she was draining with paper napkins. “When we saw her we were speechless,” said Dr. Syrigos, the chief of oncology at Sotiria General Hospital in central Athens. “Everyone was crying. Things like that are described in textbooks, but you never see them because until now, anybody who got sick in this country could always get help.”

    Life in Greece has been turned on its head since the debt crisis took hold. But in few areas has the change been more striking than in health care. Until recently, Greece had a typical European health system, with employers and individuals contributing to a fund that with government assistance financed universal care. People who lost their jobs received health care and unemployment benefits for a year, but were still treated by hospitals if they could not afford to pay even after the benefits expired.

    Things changed in July 2011, when Greece signed a supplemental loan agreement with international lenders to ward off financial collapse. Now, as stipulated in the deal, Greeks must pay all costs out of pocket after their benefits expire.

    About half of Greece’s 1.2 million long-term unemployed lack health insurance, a number that is expected to rise sharply in a country with an unemployment rate of 25 percent and a moribund economy, said Savas Robolis, director of the Labor Institute of the General Confederation of Greek Workers. A new $17.5 billion austerity package of budget cuts and tax increases, agreed upon Wednesday with Greece’s international lenders, will make matters only worse, most economists say.

    The changes are forcing increasing numbers of people to seek help outside the traditional health care system. Elena, for example, was referred to Dr. Syrigos by doctors in an underground movement that has sprung up here to care for the uninsured. “In Greece right now, to be unemployed means death,” said Dr. Syrigos, an imposing man with a stern demeanor that grew soft when discussing the plight of cancer patients.

    The development is new for Greeks — and perhaps for Europe, too. “We are moving to the same situation that the United States has been in, where when you lose your job and you are uninsured, you aren’t covered,” Dr. Syrigos said.

    It’s worth noting that Greece’s social welfare costs would drop even faster with a little more this and a lot less of that. Trickle-down morality requires shared sacrifice at all levels.

    Posted by Pterrafractyl | October 29, 2012, 1:39 pm
  24. And the benefits of expansionary austerity continue to trickle down to the populace:

    Greeks Can’t Find Euros to Buy Heating Oil in Winter Economy
    By Oliver Staley – Dec 19, 2012 4:56 AM CT
    Bloomberg

    In the Greek mountain town of Kastoria, less than an hour from the Albanian border, Kostas Tsitskos, 88, can’t afford fuel to heat his home against the winter’s cold. So he and his son live in a single bedroom, warmed by a small electric heater.

    “One room is enough,” said Tsitskos, who lives on a 734 euro-a-month ($971) pension and doesn’t have the 1,000 euros a month he needs to buy heating oil.

    Greece is facing a heating-oil crisis. With an economy that has contracted for five years and an unemployment rate at a record 25 percent, residents in northern Greece can’t heat their homes. Kastoria hasn’t received funds from the central government to warm schools and the mayor said he will close all 53 of them rather than let children freeze, a step already taken in a nearby town. Truckloads of wood are arriving from Bulgaria as families search for alternative fuels.

    Austerity Cuts

    Austerity measures have cut government salaries and benefits, raised the retirement age and reduced services.

    The household price for heating oil in Greece reached 1,266 euros per 1,000 liters (264 gallons) in the second quarter of 2012, surging 48 percent from a year earlier, according to the International Energy Agency, a Paris-based organization. The same quantity cost 700 pounds (861 euros) in the U.K., according to the IEA, and $1,045 (790 euros) in New York, according to a state agency.

    Greeks pay both excise and value-added taxes on heating oil that can make up 42 percent of the total cost. The mayors of the region are petitioning the government to be exempted from the tax.

    Greece’s oil prices are high because of laws that protect the country’s two refining companies and prevent competition, said Pavlos Eleftheriadis, a lecturer in law at the University of Oxford in England, who studies monopolies.

    “The Greek political system works for the insiders,” said Eleftheriadis, a native of Greece. “If you’re an insider, there will be an attempt to protect you. If you’re a poor person in Kastoria, you are on your own.”

    No Buyers

    Christos Tsitskos, his 43-year-old son, lives with his father. Christos owned a small fur business before closing it in the crisis. He now works at another company manufacturing pelts, earning 5 euros an hour. There are no buyers, he said.

    “We’ll make 100 pelts and sell two or three,” he said. “We don’t sell anything.”

    A veteran of the Greek Civil War, which was fought from 1946 to 1949, the elder Tsitskos worked in the fur industry in Montreal and New York before opening his own business manufacturing coats in Kastoria, retiring at 65. His wife died 15 years ago.

    Tsitskos has relatives in Astoria, New York, who have considered returning to Greece to retire and he cautions them to stay in the U.S. He would leave if he could afford it, he said.

    “I was expecting a different type of life,” he said. “There’s nothing that makes me happy. I’m living just to live.”

    Even after 40 years in the trade, Tsitskos doesn’t have any furs to keep warm. The one fur coat he owned was sold years ago.

    Posted by Pterrafractyl | December 19, 2012, 10:32 am
  25. OMG, this is too perfect. Check out Mitch McConnell’s big goal for this year now the GOP has taken over congress: don’t be scary:

    The Washington Post
    New Senate majority leader’s main goal for GOP: Don’t be scary

    By Paul Kane January 4 at 7:26 PM

    Mitch McConnell has an unusual admonition for the new Republican majority as it takes over the Senate this week: Don’t be “scary.”

    The incoming Senate majority leader has set a political goal for the next two years of overseeing a functioning, reasonable majority on Capitol Hill that scores some measured conservative wins, particularly against environmental regulations, but probably not big victories such as a full repeal of the health-care law. McConnell’s priority is to set the stage for a potential GOP presidential victory in 2016.

    “I don’t want the American people to think that if they add a Republican president to a Republican Congress, that’s going to be a scary outcome. I want the American people to be comfortable with the fact that the Republican House and Senate is a responsible, right-of-center, governing majority,” the Kentucky Republican said in a broad interview just before Christmas in his Capitol office.

    It’s a far cry from his defiant declaration in 2010 that his “single most important” goal was to make President Obama a one-term president, an antagonizing oath that Democrats frequently invoke to embarrass the GOP leader — Obama won reelection comfortably in 2012, and McConnell’s party lost seats.

    Now in charge at both ends of the Capitol, Republicans aim to avoid the worst excesses of the past four years and make sure the public isn’t fearful of the GOP’s course.

    “There would be nothing frightening about adding a Republican president to that governing majority,” McConnell said, explaining how he wants voters to view the party on the eve of the 2016 election. “I think that’s the single best thing we can do, is to not mess up the playing field, if you will, for whoever the nominee ultimately is.”

    But McConnell, who will become majority leader Tuesday, is not planning to avoid conflict altogether. He wants to use the annual spending bills to compel Obama to accept conservative policy riders that will divide Democrats, similar to the December spending bill’s inclusion of a provision benefiting Wall Street firms involved in risky derivative trades. That rider brought a liberal outcry but did not end up torpedoing the bill, which had Obama’s support.

    McConnell has been coaching his members to understand that, in the initial rounds, they will have to almost unanimously support the budget outline and the spending bills, because few Democrats will support their policy riders.

    But McConnell said those who are “craving some grand deal as a way to measure the next two years” should lower their expectations. He’s very skeptical of such bargains with Democrats on tough issues such as immigration and entitlement reform. Instead, he believes three issues have potential common ground: international trade deals, an overhaul of the tax code and new revenue streams for infrastructure projects.

    “Could the country use a lot more? You bet. But there’s no way you can overcome a reluctant president on something really large,” McConnell said. The best he can do on some of those bigger issues is force Obama to break out his veto pen so there is a clear set of Democratic policy stances Republicans can campaign against in 2016.

    Democrats are dubious of McConnell’s pledge to avert edge-of-the-cliff moments. They believe he will run into the same problems that have bedeviled House Speaker John A. Boehner (R-Ohio) during the past four years — including the inability to corral rabble-rousers such as Sen. Ted Cruz (R-Tex.) to support an agenda that conservative critics will probably view as not bold enough in challenging Obama. Appeasing those far-right conservatives will lead to an agenda that Democrats hope to exploit in 2016.

    “What Senator McConnell wants people to think and what they will think when they see the results for themselves are two very different things,” said Reid’s spokesman, Adam Jentleson. “Senator McConnell heads a caucus that is obsessed with rigging the game against working people in favor of wealthy special interests. That’s a scary fact indeed, and he won’t be able to hide it.”

    Awww…the GOP is scary and knows it. This is almost as touching as The Elephant man, if the Elephant Man happened to be a pack of scary monsters.

    But don’t worry GOP. Just stick to your plan of immediately loosening pollution regulations, pushing major trade deals that almost no one likes, demand lower taxes for multinational corporations and the super-rich, and be sure to come up with plenty of mystery “conservative policy riders” you can think of trying to “compel” Obama to sign while working out the annual spending bills. Maybe you could even use grassroots-inspired legislation to seem extra non-scary, like that recent Dodd-Frank tweak written by a friendly group of citizens working in the private financial sector.

    Also, you might want to tell you brethren at the state-level to stop being so scary:

    The Washington Post
    Republicans in state governments plan juggernaut of conservative legislation

    By Reid Wilson January 2

    Legislators in the 24 states where Republicans now hold total control plan to push a series of aggressive policy initiatives in the coming year aimed at limiting the power of the federal government and rekindling the culture wars.

    The unprecedented breadth of the Republican majority — the party now controls 31 governorships and 68 of 98 partisan legislative chambers — all but guarantees a new tide of conservative laws. Republicans plan to launch a fresh assault on the Common Core education standards, press abortion regulations, cut personal and corporate income taxes and take up dozens of measures challenging the power of labor unions and the Environmental Protection Agency.

    Before Election Day, the GOP controlled 59 partisan legislative chambers across the country. The increase to 68 gives Republicans six more chambers than their previous record in the modern era, set after special elections in 2011 and 2012.

    Republicans also reduced the number of states where Democrats control both the governor’s office and the legislatures from 13 to seven.

    Republicans in at least nine states are planning to use their power to pass “right to work” legislation” legislation, which would allow employees to opt out of joining a labor union. Twenty-four states already have such laws on the books, and new measures have been or will be proposed in Wisconsin, New Mexico, New Hampshire, Ohio, Colorado, Kentucky, Montana, Pennsylvania and Missouri.

    Democrats and union officials warn Republicans against going too far, just a few years after bills targeting public-sector employee unions sparked protests in Wisconsin and Ohio. “These bills have proven time and time again to decrease wages and safety standards in all workplaces,” said Stephanie Bloomingdale, secretary-treasurer of the Wisconsin AFL-CIO.

    Renewal of culture wars

    A new round of the culture wars is also inevitable in 2015. Mallory Quigley, a spokeswoman for the antiabortion Susan B. Anthony List, said she expects that measures to ban abortions after 20 weeks of pregnancy will advance in Wisconsin, South Carolina and West Virginia. Missouri, too, is likely to take up some abortion-related bills.

    In Tennessee, voters gave the legislature new powers to regulate abortion, and state House Speaker Beth Harwell (R) has said her chamber will take up three measures requiring mandatory counseling, a waiting period and stricter inspections of clinics.

    Conservative activists also are targeting Common Core, the national education standards adopted by 46 states and the District of Columbia over the past few years. Opposition from parent and community groups has become a hot political issue on the right over the past year, leading three states — Indiana, Oklahoma and South Carolina — to drop out of the program.

    Some states will attempt to join those three in leaving the program altogether. Others will try to change testing requirements or prevent the sharing of education data with federal officials. In recent interviews, several Republican governors who support Common Core say they expect debate in their forthcoming legislative sessions.

    “The biggest concern and opposition you hear from conservative legislators is, ‘We don’t want Washington dictating curricula,’?” said Utah state Sen. Curtis Bramble, a Republican.

    Republicans also are likely to take up measures diluting the power of the EPA, which has proposed state-by-state targets for reducing carbon emissions. A dozen states have challenged proposed EPA regulations on power plants in federal court.

    New Republican governors in states such as Arkansas and Arizona and legislators in North Carolina, North Dakota and elsewhere will prioritize cutting personal or corporate income tax rates. States that have experienced a revenue boom from energy taxes will have to contend with falling receipts as the price of oil declines. Tax revenue in other states is coming in slower than expected, presenting a challenge in many of the 49 states that require balanced annual budgets.

    “With the increasing costs of Medicaid and education, balancing the budget is going to be a challenge,” said South Dakota state Sen. Deb Peters (R), who chairs the Appropriations Committee.

    But Republicans also caution that they have to use their newfound political power to govern effectively and avoid overreach.

    “If [Republicans] go too far, they’re not going to be the speaker and the majority leader two years from now,” said Nevada Gov. Brian Sandoval (R), whose party took total control of the state legislature in November. “There’s a very narrow window to demonstrate that they can lead, that we can lead.”

    Mounting budgetary challenges from earlier years will dominate legislative attention in a handful of states. About half of all states are operating at or above their maximum prison capacity, according to corrections experts, putting pressure on legislatures to alleviate crowding. Some states will have to deal with increasingly underfunded pension plans, which could threaten to swamp state budgets over the long term. In Illinois, where the state pension is funded at less than 40 percent, Gov.-elect Bruce Rauner (R) made pension reform a cornerstone of his campaign this year.

    The American Legislative Exchange Council, a conservative organization that helps Republican legislators coordinate measures among states, supports moving public pensions from a defined benefit system to a defined contribution system. ALEC considers Oklahoma, which passed a pension reform bill in 2014, to be the model.

    Oooo…so in addition to a breakout of state-level “culture wars”, there’s also probably going to be a wave of ALEC-inspired pension “reform” that turns public pensions into 401k plans. Well, of all the GOP’s plans that’s probably going to be the most popular since so much of the public seems to love the idea of having their laws written by corporations but then implemented by desperate people with no reasonable hope for the future. Nothing scary about that.

    Posted by Pterrafractyl | January 5, 2015, 12:29 pm
  26. Here’s a reminder that the worse the US economy does, the better the GOP does. At least in 2016. It’s that simple. So there’s really no reason to assume the GOP’s Taliban offensive and plans for endless austerity will come to an end. Quite the opposite:

    TPM DC
    Why The Republican Congress Has A Big Incentive To Keep Up Gridlock

    By Sahil Kapur Published January 6, 2015, 6:00 AM EST

    Republicans take the reins of Congress this week facing a new conventional wisdom that they now have to prove they can govern.

    But they don’t.

    It may seem counterintuitive, but political science research suggests that Republicans have a stronger incentive to ensure gridlock on economic issues ahead of the 2016 presidential election, rather than pass legislation that President Barack Obama is willing to sign into law.

    The reason is simple: Americans credit the president when things are good, and blame the president when things are bad, according to studies. It hardly matters who controls Congress. In addition, economic growth and presidential approval ratings are key predictors of the incumbent party’s performance in elections. That suggests voters would punish Democrats in 2016 if the Republican Congress fails to govern and improve the economy.

    “The president typically bears more of the blame [for bad outcomes] under divided government,” said John Sides, a political science professor at George Washington University. “If a lack of initiative hurts the economy, the president pays a price. … So a sluggish economy and an unpopular president is helpful to Republicans up and down the ballot in 2016.”

    A Quinnipiac survey after the midterm election found that a plurality of American voters — a 44 to 42 percent margin — would blame Obama instead of the Republicans for gridlock they expect to occur over the next two years.

    “That makes it somewhat challenging for President Obama and for the Democrats more generally to turn Republican behavior in Congress into a political issue that nets them votes,” Sides said. “There’s not much evidence of that on the table in 2014, despite all the talk about how they’re gonna pay a price for the shutdown, they’re gonna pay a price for this or that, least productive Congress in history — all that talk never materialized into much.”

    A 1999 study by political scientist Helmut Norpoth found that voters hold the president’s party accountable for economic outcomes.

    “The fact that control of government is split between the major parties, as it was in different configurations in the most recent presidential elections, is not a fact of much significance for American voters,” he concluded. “Regardless, under both Republican and Democratic Presidents, and with Congress in the hands of the opposite party each time, voters assign responsibility for the economy to the President, not Congress; at least, they vote as if they followed that logic.”

    Bob Shrum, a veteran Democratic strategist, acknowledged that Republicans have a perverse incentive to maintain gridlock, but argued that it could backfire if they’re perceived as refusing to do anything for ordinary Americans.

    “There is an incentive to ruin the economy as long,” he said, “as you don’t get caught doing it.”

    Of course, there’s no need to engage in political game-theory to conclude that the GOP’s scorched earth policies are set to continue. You could just look at their platform.

    Posted by Pterrafractyl | January 6, 2015, 1:42 pm
  27. One of the obvious questions facing a new GOP-led Congress is “which group of people are going to be held hostage to be used as leverage for tax cuts or social program gutting?” So who’s going to be held hostage? Almost everyone. And it’s one of the GOP’s very first moves:

    TPM DC
    New GOP Congress Fires Shot At Social Security On Day One

    By Dylan Scott
    Published January 6, 2015, 5:34 PM EST

    With a little-noticed proposal, Republicans took aim at Social Security on the very first day of the 114th Congress.

    The incoming GOP majority approved late Tuesday a new rule that experts say could provoke an unprecedented crisis that conservatives could use as leverage in upcoming debates over entitlement reform.

    The largely overlooked change puts a new restriction on the routine transfer of tax revenues between the traditional Social Security retirement trust fund and the Social Security disability program. The transfers, known as reallocation, had historically been routine; the liberal Center for Budget and Policy Priorities said Tuesday that they had been made 11 times. The CBPP added that the disability insurance program “isn’t broken,” but the program has been strained by demographic trends that the reallocations are intended to address.

    The House GOP’s rule change would still allow for a reallocation from the retirement fund to shore up the disability fund — but only if an accompanying proposal “improves the overall financial health of the combined Social Security Trust Funds,” per the rule, expected to be passed on Tuesday. While that language is vague, experts say it would likely mean any reallocation would have to be balanced by new revenues or benefit cuts.

    House Democrats are sounding the alarm. In a memo circulated to their allies Tuesday, Democratic staffers said that that would mean “either new revenues or benefit cuts for current or future beneficiaries.” New revenues are highly unlikely to be approved by the deeply tax-averse Republican-led Congress, leaving benefit cuts as the obvious alternative.

    The Social Security and Medicare Boards of Trustees estimated last year that the disability insurance program would run short of money to pay all benefits some time in late 2016. Without a new reallocation, disability insurance beneficiaries could face up to 20 percent cuts in their Social Security payments in late 2016 — a chit that would be of use to Republicans pushing for conservative entitlement reforms.

    “The rule change would prohibit a simple reallocation! It will require more significant and complex changes to Social Security,” Social Security Works, an advocacy group, said in a statement Tuesday. “In other words, the Republican rule will allow Social Security to be held hostage.”

    Policy wonks who follow Social Security saw the GOP rule change as a play for leverage.

    “Everybody’s been talking about entitlement reform. Mr. Boehner and President Obama were pretty close to coming up with some kind of grand bargain, which ultimately fell apart,” Tom Hungerford, senior economist at the liberal Economic Policy Institute, told TPM. “Maybe this could be used as a hostage to try to get back to something like that.”

    For their part, congressional Republicans were fairly transparent about their thinking. Rep. Tom Reed (R-NY), who has been outspoken on the disability program, co-sponsored the rule amendment. The disability program has been a favored target for the GOP; members were warning last month that the program could be vulnerable to fraud.

    “My intention by doing this is to force us to look for a long term solution for SSDI rather than raiding Social Security to bail out a failing federal program,” Reed said in a statement. “Retired taxpayers who have paid into the system for years deserve no less.”

    Liberal analysts counter, however, that the retirement fund, which pays out $672.1 billion in benefits per year versus $140.1 billion for the disability fund, is more than healthy enough to allow for a reallocation, as has historically been done. CBPP’s Kathy Ruffing wrote that, if a transfer was made before the 2016 deadline, both funds would be solvent until 2033.

    The GOP has clearly found a new sponsor. In fairness, the old sponsors were starting to become problematic, so some sort of rebranding was in order. Still, wow.

    Posted by Pterrafractyl | January 6, 2015, 3:41 pm
  28. Money can’t buy you happiness. Or a conscience:

    Washington Post
    Most of America’s rich think the poor have it easy

    By Roberto A. Ferdman January 8 at 1:20 PM

    There is little empathy at the top.

    Most of America’s richest think poor people have it easy in this country, according to a new report released by the Pew Research Center. The center surveyed a nationally representative group of people this past fall, and found that the majority of the country’s most financially secure citizens (54 percent at the very top, and 57 percent just below) believe the “poor have it easy because they can get government benefits without doing anything in return.” America’s least financially secure, meanwhile, vehemently disagree — nearly 70 percent say the poor have hard lives because the benefits “don’t go far enough.” Nationally, the population is almost evenly split.

    Why the surprising lack of compassion? It’s hard to say. At the very top, the sentiment is likely tied to conservatism, which traditionally bemoans government programs that redistribute wealth, calling them safety nets. Some 40 percent of the financially secure are politically conservative, according to Pew. And conservatives are even more likely to say the “poor have it easy” than the rich — a recent Pew survey found that more than three quarters of conservatives feel that way.

    More broadly, the prevalence of the view might reflect an inability to understand the plight of those who have no choice but to seek help from the government. A quarter of the country, after all, feels that the leading reason for inequality in America is that the poor don’t work hard enough.

    But as my colleague Christopher Ingraham pointed out last year, to say that the poor have it easy is to ignore how serious their struggle is in comparison to the rest of the population, and especially those with money to spare. The poor are much less likely to have health insurance, much more likely to be the victim of a crime. They don’t get the same level of education or have the same food options. Inequality, as my colleague Matt O’Brien wrote, “starts in the crib,” and it plays out even in what babies of different socioeconomic backgrounds are fed. And that’s just the tip of the iceberg.

    Since the poor apparently aren’t working hard enough to earn their poverty, it begs the question of how brutal life should be for someone at the top of the income scale. For instance, since being poor is known to be bad for your health, shouldn’t being rich be absolutely horrendous for your health because of all the incredibly hard work you did to earn that money? Aren’t non-suffering billionaires inherently illegitimate according to this widely held moral paradigm?

    So how many torches and pitchforks one should have to dodge on their way to work in the morning in order to legitimately earn, say, over 10 million dollars a year…assuming they’re working at all for that income? Is one torch and one pitchfork a day brutal and harmful enough? Or would that just be coddling for people that obviously should live horrible lives in order to justify making so much a year? And no, flaming pitchforks don’t count as both a torch and a pitchfork. That’s being lazy. It’s just a pitchfork that happens to be on fire. Life isn’t fair.

    In other news, the banks apparently have it too hard…

    Posted by Pterrafractyl | January 8, 2015, 2:31 pm
  29. It’s time for the next round of one of the longest games in town. It’s a horrible life and death game that almost everyone loses, so it’s really not clear why America plays it:

    TPM DC
    Inside The GOP’s Long Game To Ignite A New Battle Over Social Security

    By Dylan Scott
    Published January 9, 2015, 12:01 PM EST

    Republicans are seizing a once-every-20-years opportunity to force a crisis in the Social Security disability program and use it as leverage to push through reforms, a long game that they have been quietly laying groundwork for since taking control of the House in 2010.

    In less than two years, the Social Social disability insurance program will start being unable to pay its full benefits and House Republicans said this week that they aren’t going to simply give it more revenue from the retirement side, as has been done historically. It’s the latest episode in a protracted campaign over the disability program — and it raises the question of what exactly Republicans plan to do now.

    The last time this happened was 1994, and liberal analysts say that another simple reallocation between the disability and retirement funds, as has been done 11 times in the past, would keep both funds solvent until 2033. That meant that conservatives had to act now if they wanted to squeeze the crisis for all it’s worth. For the last few years, they’ve been highlighting instances of fraud and other problems with the program, setting the stage for the big move this week.

    Democrats are sounding the alarm, warning that Republicans have taken a “hostage” and will leverage it to pursue broad changes to Social Security as a whole. With memories still fresh of their failed effort to privatize Social Security in 2005, conservatives wonks are less sure that the new GOP Congress would have the political will to do that, though they wouldn’t necessarily mind if it did.

    “I wasn’t sure that they were going to be willing to take it up. I’m heartened that the rule was put in place. It forces us to start having a debate on this issue today,” said Jason Fichtner, senior research fellow at George Mason University’s Mercatus Center who has been called by House Republicans to testify on Social Security. “What I suspect is this allows for a conversation not just on (disability), but the whole system combined. But the hurdle of disability insurance is high enough. You start adding in trying to retirement reform at the same time, that just makes it a higher hurdle. I’m not sure there’s the political will or the public will to tackle both systems at the same time right now.”

    The hostage in this metaphor is the disability insurance program and a late 2016 deadline, at which point it won’t be able to pay its full benefits to its 11 million beneficiaries. The new Republican House has approved a rule that says Congress can’t just transfer tax revenue from the Social Security retirement fund, as it has been done routinely in the past, to cover the looming shortfall. If nothing is done, beneficiaries would face an estimated 20 percent cut.

    Most members on both sides presumably wouldn’t want to see that happen, especially during a critical election cycle, giving Republicans powerful leverage to bring Democrats to the negotiating table. One of the co-sponsors of the rule change, Rep. Tom Reed (R-NY), said that his intention was to “force us to look for a long-term solution” to the disability program.

    But the rule itself says it will allow a revenue transfer if the “overall health” of Social Security, encompassing both the retirement and disability programs, is improved. That’s what Democrats are warning about, but some conservative analysts who have consulted with House staffers are also hoping that the GOP uses the threat of benefits cuts to go big.

    “It’s encouraging that the rule actually says we could do reallocation if it’s accompanied by improvements in overall Social Security solvency. Our preference has always been that the depletion of the DI trust fund become the impetus for comprehensive Social Security reform,” Ed Lorenzen, senior advisor to the Committee for a Responsible Federal Budget, told TPM. “For the most part, the problems facing DI are really just a symptom of the larger problems for Social Security as a whole.”

    Staff for the House’s big players on Social Security — Ways and Means Chair Paul Ryan (R-WI) and Social Security Subcommittee Chair Sam Johnson (R-TX), who co-sponsored the new rule with Reed — weren’t ready to reveal their plans for what comes next. But asked if their proposals would address just the disability insurance fund or Social Security in its entirety, an aide to Reed told TPM: “Just DI for the moment.”

    Those on the right weren’t surprised that the new GOP Congress took an aggressive stance on Social Security’s disability program on its very first day. “Over the last year, it started becoming clear that there’d be a lot of resistance to (a clean reallocation) and a desire to have reallocation tied to some reforms,” Lorenzen said. “We were sort of anticipating that this would happen.”

    This part right here symbolizes so much of what is wrong with US politics:


    The hostage in this metaphor is the disability insurance program and a late 2016 deadline, at which point it won’t be able to pay its full benefits to its 11 million beneficiaries. The new Republican House has approved a rule that says Congress can’t just transfer tax revenue from the Social Security retirement fund, as it has been done routinely in the past, to cover the looming shortfall. If nothing is done, beneficiaries would face an estimated 20 percent cut.

    Most members on both sides presumably wouldn’t want to see that happen, especially during a critical election cycle, giving Republicans powerful leverage to bring Democrats to the negotiating table. One of the co-sponsors of the rule change, Rep. Tom Reed (R-NY), said that his intention was to “force us to look for a long-term solution” to the disability program.

    Yep, in America a major political party can successfully hold the nation hostage using disabled people, make demands impacting almost everyone, get those demands met, and the people you’re holding hostage still might not even know it happened or who did the hostage-taking.

    It’s like taking candy from a baby that happens to be younger than a 4 month old (the babies are far more adept at identifying their hostage-takers by that age) and then taking the baby’s healthcare. It may not be the best analogy, but it sort of fits.

    Posted by Pterrafractyl | January 9, 2015, 12:39 pm
  30. Running for president has got to be exhausting, and maybe even traumatizing, so you have to wonder if any of the GOP’s perennial presidential candidates currently preparing for their next runs have begun experimenting with any of the newer forms of PTSD treatments out there that all the raver kiddies are excited about . It’s starting to seems like it:

    Chicago Tribune
    Let Romney’s rebranding begin: Anti-poverty warrior? Cyborg?

    By Rex W. Huppke

    January 19, 2015, 5:44 PM

    Rising like a well-coiffed, buttoned-down phoenix from the ashes of his wildly unsuccessful 2012 presidential campaign, Mitt Romney has politely expressed interest in running again.

    But this time, he and his handlers assert, it will not be the same Mitt Romney — this will be Mitt Romney: Anti-Poverty Warrior.

    To many, that sounds like a stretch. After all, much of what sank the former Massachusetts governor in his last presidential run was the perception that he is a business-embracing plutocrat who can’t relate to the poor or even the middle class unless a member of one of them is operating his car elevator.

    Yet there was Romney the other day, speaking to a group of Republicans in San Diego: “It’s a tragedy, a human tragedy, that the middle class in this country by and large doesn’t believe that the future will be better than the past.”

    He added: “The rich have gotten richer, income inequality has gotten worse and there are more people in poverty than ever before under this president.”

    This is, to put it mildly, an interesting change in tone from 2012. Way back then, the very same Mitt Romney was asked about income inequality and about the “distribution of wealth and power in this country” by the “Today” show’s Matt Lauer. Romney said: “You know, I think it’s about envy. I think it’s about class warfare.”

    Other lowlights from Romney’s losing campaign include: his infamous comment about the “47 percent” of Americans that he doesn’t need to worry about; his statement that he’s “not concerned about the very poor. We have a safety net there”; and his wonderfully glib, “Corporations are people, my friend.”

    Rebranding Romney as “sympathetic to the poor” sounds trickier than rebranding Hillary Clinton as “not a Clinton,” or rebranding a steakhouse as a vegan restaurant even though everything on the menu is still made of meat.

    But just because it’s tricky doesn’t mean it’s impossible. We live in an age of rebranding, often aided by social media and the ever-hungry and oft-ideological 24-hour news networks.

    So who’s to say that Romney can’t reshape his image and make some “I Love The Poors!” noise in the GOP presidential primaries?

    To that end, I have a few rebranding suggestions for Mr. Romney.

    1) Consider changing the name “Mitt” to “Matt.” Mitt Romney sounds like a close personal friend of Gordon Gekko, the ruthless corporate raider from the movie “Wall Street.” Matt Romney sounds like the neighbor who let you borrow his lawn mower.

    2) When asked about your callous-sounding statement about “the 47 percent,” respond by saying: “I never said that.” Do this forever, and it will eventually go away. Also, make “I Never Said That” the theme of your entire campaign. #INeverSaidThat

    3) Aim to alienate only 37 percent of voters this time around.

    4) Taste Mexican food, but don’t make that awkward “Mmmm … so good” face that rich people make when they taste food they don’t like.

    5) Don’t talk. That really seemed to hurt you last time.

    Using these steps and a few others, Romney can certainly cast himself as an anti-poverty warrior. And if that rebranding doesn’t take, there are always other options.

    Like Molten Mitt Romney, the sexy candidate. Or Cyborg Mitt Romney, equipped with “empathy cannons” and “previous-impression blasters.”

    The possibilities are endless. Because Mitt Romney can be whoever Mitt Romney tells us he wants to be. We just have to believe!

    That was certainly some fabulous advice for Mittens, especially the Cyborg Mitt option. America just might be ready for Cyborg Mitt. But this new anti-poverty crusader Mitt?! Wow, now THAT is the future of American politics.

    So let’s hope Mitt stays on the meds or whatever it is that’s triggering this profound rethinking of his life and priorities. This is clearly a new and improved Mitt. He’s still awful, but a better form of awful.

    And it’s not just Mitt that’s suddenly all new and improved. Rick Santorum has clearly been dealing with his own case of post-campaigning PTSD. It’s the only explanation:

    Talking Points Memo Livewire
    Rick Santorum: ‘Crazy Stuff’ Comments On Contraception Hurt Campaign

    By Daniel Strauss
    Published January 20, 2015, 11:04 AM EST

    During his 2012 presidential run, former Sen. Rick Santorum (R-PA) focused his campaign on social conservative issues, includng his anti-abortion stance. But in a recent interview with MSNBC, Santorum, who seems to be gearing up for another run in 2016, suggested that was all “crazy stuff.”

    In an interview with NBC Santorum said that his last presidential campaign was defined by states on contraception and anti-abortion stances and similar “crazy stuff that doesn’t have anything to do with anything.” Santorum himself also said that his campaign suffered for some “dumb things” he said.

    Wait, what?! Did Rick Santorum just refer to his 2012 campaign themes as “crazy stuff that doesn’t have anything to do with anything” during an interview about his 2016 ambitions? Woah. That is some strong stuff you must have slipped him, Mitt, because that doesn’t sound like Rick Santorum at all. At the same time, it certainly seems to be helping both Rick and Mitt, and clearly doesn’t impact motivation or drive at all so it doesn’t seem to be too strong.

    Hopefully one day they’ll share their secret, because the whole GOP could use a good strong dose of it. It’s bound to be better than what the GOP is normally ingesting. That stuff will destroy your mind. It ain’t pretty

    Posted by Pterrafractyl | January 20, 2015, 12:33 pm
  31. With GOP 2016 hopefuls Rand Paul and Chris Christie raising eyebrows after deciding to share their views on the safety and efficacy of vaccines (following a US measles outbreak), it’s worth pointing out that at least one of the GOP’s Senators is actually trying to do something about the explosion of autoimmune disorders of the last few decades. Yes, North Carolina’s new Senator, Thom Tillis, has a brilliant plan:

    TPM Livewire
    GOP Senator: Don’t Force Employees To Wash Their Hands After Using Toilet
    By Brendan James Published February 3, 2015, 11:18 AM EST

    In a week packed with news over concerns for public health, Sen. Thom Tillis (R-NC) described his own history of opposing certain health and hygiene regulations, including those that require employees to wash their hands after using the bathroom.

    During a Q&A at the Bipartisan Policy Center on Monday, Tillis related a story from his time in the state legislature in 2010, complaining that the U.S. is “one of the most regulated nations in the history of the planet,” video via C-SPAN shows.

    “I was having a discussion with someone, and we were at a Starbucks in my district, and we were talking about certain regulations where I felt like ‘maybe you should allow businesses to opt out,'” the senator said.

    Tillis said his interlocutor was in disbelief, and asked whether he thought businesses should be allowed to “opt out” of requiring employees to wash their hands after using the restroom.

    The senator said he’d be fine with it, so long as businesses made this clear in “advertising” and “employment literature.”

    “I said: ‘I don’t have any problem with Starbucks if they choose to opt out of this policy as long as they post a sign that says “We don’t require our employees to wash their hands after leaving the restroom,” Tillis said.

    “The market will take care of that,” he added, to laughter from the audience.

    See that? Now THAT is creative legislation. Thom Tillis is obviously following the “hygiene hypothesis“, the theory that the rapid rise in diseases like asthma and possible even autism is related a reduction in the amount of germs and other filth children get exposed to in the modern world. And he just wants to save some kids from a fate of too much cleanliness. And what better way to do that than ensuring steady diet of fecal matter with your restaurant food.

    And don’t forget Tillis’s calls for eliminating the minimum wage entirely which would undoubtedly impact a number of restaurant employees. Just think of how much more beneficial and diverse their germs will be when restaurant employees are chronically stressed out an unable to afford even basic necessities.

    Thom Tillis may have gained notoriety for talking about the need to “divide and conquering the poor” by turning the disabled against the poor. But as we can see, what he was actually fighting for was a system where poor, sick employees will become vectors for healthier children and a better tomorrow! Thom Tillis doesn’t want you to eat sh#t and die. He wants you to eat sh#t and thrive. Unless you’re poor, of course. In that case feel free to eat sh#t and die.

    Posted by Pterrafractyl | February 3, 2015, 3:50 pm
  32. Chris Christie appears to be trying to shake up his beleaguered Presidential ambitions with a public pledge guaranteed to please a key GOP demographic: big money donors. The pledge? Overhauling (gutting) entitlements. He knows his audience:

    The Washington Post
    Chris Christie will make entitlement reform central to a White House bid

    By Robert Costa
    March 13 at 4:15 PM

    New Jersey Gov. Chris Christie (R) addresses a gathering at a town-hall meeting on March 10 in Somerville, N.J. (Mitsu Yasukawa/AP)
    By Robert Costa March 13 at 4:15 PM

    New Jersey Gov. Chris Christie (R) told leading GOP policy analysts this week that he will make overhauling Medicare, Social Security and other long-term entitlement programs a centerpiece of his likely presidential campaign, according to participants in the talks.

    Christie’s decision to embrace a politically risky campaign theme is central to an attempt to revive his wilting national prospects, according to people familiar with his plans.

    By casting himself in the coming months as a blunt truth-teller on issues that some in his party have resisted tackling, Christie hopes to win support among conservatives who have been reluctant to back him and are unsure of his rationale for running.

    But voters have long been wary of attempts by politicians in both parties to cut popular entitlement programs, which account for about half of all federal spending. Christie himself has expanded Medicaid as governor, calling it “the right decision for New Jersey.”

    Christie made his intentions clear Monday in a conference call with former Republican administration officials and a former senior adviser to House GOP leaders. Over the course of nearly two hours, Christie indicated that he is planning to run a campaign focused on the nation’s fiscal health and recommending sweeping structural reforms.

    According to Republicans briefed on the call, Christie said he is in the midst of finalizing his 2016 platform, which is aimed at carving out space for him in the early Republican field as a budget hawk from a blue state. The strategy would put him in competition with Wisconsin Gov. Scott Walker and other Republican rivals who have put fiscal matters at the forefront of their messages.

    Those participating in the session included James C. Capretta, an associate director of the White House Office of Management and Budget in the George W. Bush administration; Todd G. Buchholz, a director of economic policy in George H.W. Bush’s White House; Neil Bradley, a former policy guru for House Republicans; and Lanhee Chen, Mitt Romney’s policy director during the 2012 campaign. Robert E. Grady, a longtime Christie strategist, moderated the exchange.

    Maria Comella, a Christie aide, declined to comment.

    But several Christie allies — who spoke on the condition of anonymity to freely discuss Christie’s deliberations — said the brash Garden State governor is eager to return to the political issues and persona that made him a national star in 2010, when he battled with public employees over pensions and benefits at town-hall meetings. By targeting federal entitlements, he believes he can remind skeptical Republicans why many of them cheered him five years ago, the allies said.

    Christie has acknowledged to friends that he needs to do more to make it back to the top tier of the GOP field, especially if a large group of Republican donors remains wary. Damaged by an ongoing controversy over the politically motivated closure of traffic lanes on a major New Jersey bridge, Christie has watched as Walker and former Florida governor Jeb Bush have gained support from donors and surged in the polls.

    Christie’s confidants have been passing around copies of a 2011 speech the governor delivered at the American Enterprise Institute in Washington as a primer of where Christie wants to go, according to Republicans in touch with his camp. In that speech, Christie urged Congress to “raise the age for Social Security” and warned that he would campaign against Republicans who did not call for drastic changes to Medicare.

    “If people who I campaigned for don’t stand up and do the right thing, the next time they will see me in their district is with my arm around their primary opponent,” he said.

    David Winston, a Republican pollster, said Christie could be credible “if he could define a success at the state level and talk about how it’s potentially applicable” to the U.S. government.

    But he cautioned that most voters are more concerned with jobs than with revamping Medicare and Social Security. “Those are important issues, but the electorate is looking at how to get the economy moving,” Winston said.

    Christie’s fiscal record has been mixed in New Jersey, where unions continue to contest his policies in court and Moody’s Investors Service says the state faces $83 billion in unfunded pension liabilities.

    His stumbles also have created significant difficulties for Christie with GOP primary voters, according to recent polls. A Wall Street Journal/NBC News survey released this week showed 57 percent of Republicans nationally said they would not be able to support him. “He is no longer a viable candidate,” wrote Peter D. Hart, one of the poll’s directors.

    But Rick Shaftan, a conservative political consultant based in New Jersey, said tea party activists are unlikely to warm to Christie, regardless of how he frames his record. “It’s a little late now,” Shaftan said in an interview Friday. “His state is broke. If he’s going to tell the truth about something, he should file for Chapter 11.”

    It sounds like Chris Christie has a master plan! A plan designed to distinguish him from the rest of the pack by recapturing his images as arch-nemesis of public employees (and therefore quality government) with bold, drastic cuts to Medicare and social security.

    And while this probably won’t hurt his chances with the GOP’s mega-donors or the Tea Party base, as we also saw with comments from Tea Party activists like “It’s a little late now…His state is broke. If he’s going to tell the truth about something, he should file for Chapter 11,” it’s not as if suddenly coming out as a entitlement-slashing “truth teller” is going to distinguish you from the rest of the GOP pack. After all, simply curtailing the New Deal is one thing, but if you want to really impress the GOP these days you need to be the kind of guy that seems like they’re going to roll the New Deal back entirely. This is 2015. You need to think pre-New Deal which means you need to exude ‘Coolidge’-league coolness, which is what the GOP’s current union-busing heartthrob already exudes:

    Reuters
    What makes Wisconsin’s Republican Governor Scott Walker a good choice for 2016
    By Grover G. Norquist and Patrick Gleason
    November 20, 2014

    After the GOP’s midterm-elections sweep, the Republican Party holds more U.S. House seats and controls more state houses than at any time since 1928. Having reached this goal, the GOP now needs to look for a 2016 presidential nominee to match this success.

    President Calvin Coolidge, who sat in the Oval Office from 1923 to 1929, would be a smart model for the party. He reined in spending and reduced tax rates at a time when it was as needed as it is today. President Reagan admired Coolidge so much that he hung a portrait of the 30th president in his Cabinet Room.

    One talked-about possible 2016 presidential candidate who shares many of Coolidge’s policy bona fides is Wisconsin Governor Scott Walker, who won his third statewide race in four years on Nov. 4. The two men have so much in common that it is worth seeing what Coolidge’s experience can tell us about a potential President Walker.

    Coolidge took office at an extraordinary period in U.S. history. During his presidency, America advanced from a nation in which the horse and buggy was one of the most efficient methods of travel in many places to one filled with Model T drivers honking at one another to move it. The advent and popularization of modern appliances like electric washing machines allowed women of the 1920s to get out of the house.

    Coolidge rose to national prominence largely because of his actions during the 1919 Boston Police Strike. Coolidge was governor of Massachusetts, and he stood down police union bosses to put an end to the strike. He offered a sharp contrast to then-President Woodrow Wilson, silent and timid on an issue of national importance.

    Coolidge’s limited-government approach made for both good policy and good politics — it fueled a stunning prosperity. Economic expansion under Coolidge was rapid, with the gross national product rising roughly 4.2 percent a year from 1920 to 1929, as Marquette University’s Gene Smiley explained in an Economic History Association report. This is impressive growth by 19th-, 20th-and 21st-century standards.

    A standoff with powerful bosses of government-employee unions is also what thrust Walker onto the national stage. The 2011 labor reforms that Walker championed and eventually signed into law sparked riotous protests in Madison. It cost $11 million to repair the damage done by union protesters at Wisconsin’s capitol building, considered to have one of the most aesthetically beautiful domes in the United States.

    Veronique de Rugy of the Mercatus Center at George Mason University laid out the success of these Coolidge tax cuts. From a high of 73 percent, the top rate was reduced to 46 percent in 1924, and then was brought down to 24 percent by the time Coolidge left office.

    Walker has adopted the Coolidge tax model, chipping away at his state income-tax rates. He talks about eliminating Wisconsin’s income tax during his second term. He has asked his lieutenant governor, Rebecca Kleefisch, to hold tax-reform roundtables across the state. Given that tax reform is usually the most politically difficult undertaking for lawmakers, Walker is astute in getting constituent buy-in ahead of time

    The day after the 2014 midterms, the national punditry was ready to focus on the 2016 presidential contest. Coolidge’s record and how it compares to what Walker has done in Wisconsin make a strong case for his name to be on the short list of GOP contenders.

    Union busting and tax cuts for the rich: now that’s what the GOP mega donors and Tea Party radicals want. And Scott Walker has already shown that he’s more than prepared to deliver exactly that. Uh oh!

    So just how crazy is Chris Christie going to need to get to out-Coolidge Scott Walker? That’s unclear, since it’s not just Scott Walker that’s been embracing the Coolidge model. Embracing Coolidge has been the entire GOP’s model for years:

    The New York Times

    Ludicrous and Cruel

    Paul Krugman
    APRIL 7, 2011

    Many commentators swooned earlier this week after House Republicans, led by the Budget Committee chairman, Paul Ryan, unveiled their budget proposals. They lavished praise on Mr. Ryan, asserting that his plan set a new standard of fiscal seriousness.

    Well, they should have waited until people who know how to read budget numbers had a chance to study the proposal. For the G.O.P. plan turns out not to be serious at all. Instead, it’s simultaneously ridiculous and heartless.

    How ridiculous is it? Let me count the ways — or rather a few of the ways, because there are more howlers in the plan than I can cover in one column.

    First, Republicans have once again gone all in for voodoo economics — the claim, refuted by experience, that tax cuts pay for themselves.

    Specifically, the Ryan proposal trumpets the results of an economic projection from the Heritage Foundation, which claims that the plan’s tax cuts would set off a gigantic boom. Indeed, the foundation initially predicted that the G.O.P. plan would bring the unemployment rate down to 2.8 percent — a number we haven’t achieved since the Korean War. After widespread jeering, the unemployment projection vanished from the Heritage Foundation’s Web site, but voodoo still permeates the rest of the analysis.

    In particular, the original voodoo proposition — the claim that lower taxes mean higher revenue — is still very much there. The Heritage Foundation projection has large tax cuts actually increasing revenue by almost $600 billion over the next 10 years.

    A more sober assessment from the nonpartisan Congressional Budget Office tells a different story. It finds that a large part of the supposed savings from spending cuts would go, not to reduce the deficit, but to pay for tax cuts. In fact, the budget office finds that over the next decade the plan would lead to bigger deficits and more debt than current law.

    And about those spending cuts: leave health care on one side for a moment and focus on the rest of the proposal. It turns out that Mr. Ryan and his colleagues are assuming drastic cuts in nonhealth spending without explaining how that is supposed to happen.

    How drastic? According to the budget office, which analyzed the plan using assumptions dictated by House Republicans, the proposal calls for spending on items other than Social Security, Medicare and Medicaid — but including defense — to fall from 12 percent of G.D.P. last year to 6 percent of G.D.P. in 2022, and just 3.5 percent of G.D.P. in the long run.

    That last number is less than we currently spend on defense alone; it’s not much bigger than federal spending when Calvin Coolidge was president, and the United States, among other things, had only a tiny military establishment. How could such a drastic shrinking of government take place without crippling essential public functions? The plan doesn’t say.

    And then there’s the much-ballyhooed proposal to abolish Medicare and replace it with vouchers that can be used to buy private health insurance.

    The point here is that privatizing Medicare does nothing, in itself, to limit health-care costs. In fact, it almost surely raises them by adding a layer of middlemen. Yet the House plan assumes that we can cut health-care spending as a percentage of G.D.P. despite an aging population and rising health care costs.

    The only way that can happen is if those vouchers are worth much less than the cost of health insurance. In fact, the Congressional Budget Office estimates that by 2030 the value of a voucher would cover only a third of the cost of a private insurance policy equivalent to Medicare as we know it. So the plan would deprive many and probably most seniors of adequate health care.

    And that neither should nor will happen. Mr. Ryan and his colleagues can write down whatever numbers they like, but seniors vote. And when they find that their health-care vouchers are grossly inadequate, they’ll demand and get bigger vouchers — wiping out the plan’s supposed savings.

    In short, this plan isn’t remotely serious; on the contrary, it’s ludicrous.

    And it’s also cruel.

    Yep! “Ludicrous and cruel” Coolidge-style budgets are already the GOP standard. So you have to wonder if there’s anything Chris Christie can do to out-Coolidge Scott Walker or, really, any of the rest of his GOP competitors.

    Mimicking Coolidge clearly isn’t going to be enough. That niche is filled. He’s going to need to trying harder, but harder in a different way. A New “Hard Way” Deal that transcends Coolidge’s coolness and combines ludicrous cruelty for the masses with the kind of overt, public sycophantic deferrals to the oligarchs that they can’t possibly resists. A “New ‘Harding’-er Way Deal”, perhaps.

    So there are options for Chris Christie. They may not be the obvious options but they’re there. Don’t give up, Chris. You’re so close to finding that winning combination you can smell it.

    Posted by Pterrafractyl | March 14, 2015, 4:55 pm
  33. You see, unlike many other rodents, Guinea pigs don’t actually eat their young very often. That’s why “right-wing hamsters” is probably or better analogy. “Right-wing sand gobies” would also work. It just has to be something that eats its young:

    Think Progress
    Schools Plan Massive Layoffs After Scott Walker Guts Funding

    by Alice Ollstein Posted on March 18, 2015 at 8:00 am Updated: March 18, 2015 at 9:17 am

    This week, Wisconsin kicked off a series of hearings on Governor Scott Walker’s proposed budget, which would slash about $300 million from the University of Wisconsin system over two years, funnel hundreds of millions to build a pro-basketball stadium, and cut deeply from funds for health care, food stamps and public media.

    College campuses across the state are already preparing for the worst.

    Funding at UW-Rock County would be stripped back to levels not seen since 1998, and the school’s dean has said faculty layoffs are almost certain. The situation appears even more dire at UW-Eau Claire, where administrators have offered buyouts to a record 325 faculty and staff members — about a quarter of the campus’ employees. These so-called “go away packages” have been offered to nearly half of the school’s political science department. UW-Stevens Point reports they will eliminate several entire majors, even for students currently enrolled in them.

    And it’s not just higher education feeling the pain.

    Public primary schools across Wisconsin will lose about $127 million in education aid next year, largely by scrapping a special $150 per-student fund that Wisconsin school districts received over the past two years.

    The struggling Milwaukee public schools are set to lose more than $12 million.

    Bob Peterson, who taught 5th grade in the Milwaukee Public Schools for nearly three decades, told ThinkProgress that not only are the cuts “breathtaking,” they come as the schools are still reeling from the lost funding in the Governor’s 2011 budget.

    “Over the last several years we’ve seen more kids in each classroom, less individual attention for children, and cuts to music, art, and physical education programs,” he said. “There are also way fewer guidance councilors and social workers, and given the Depression-like economic conditions that are in the community here, that’s a real serious problem. They now don’t have time to give kids guidance around post-high school possibilities like technical schools, apprenticeships or college.”

    The money saved from the education cuts is specifically slated for property tax relief, which largely benefits the wealthiest in the state.

    “Walker keeps bragging that he’s reduced property taxes each year, but most people don’t see any real difference, and it has cost the state hundreds of millions of dollars,” said Peterson, who works now with the Milwaukee Teachers’ Education Association. “You can see it’s a talking point he’s using in his very self-interested political campaign.”

    As Wisconsin students and teachers prepare to push back against the promised cuts at the public hearings this week, Republican governors around the country are similarly raiding their states’ higher education budgets.

    Residents of Illinois are organizing against Governor Bruce Rauner’s proposal to cut cut nearly $400 million from the University of Illinois — taking the colleges back to the funding levels they had in the 1950s even though the student population is three times bigger today.

    Meanwhile, students in Louisiana will hold a budget forum on Wednesday to voice concerns about Governor Bobby Jindal’s proposed $200 million in cuts to Louisiana State University.

    The deep cuts are part of the Governor’s attempt to fill a more than $1.6 billion budget hole. Though lawmakers on both sides in the aisle in the state have pleaded with the Governor to consider ending some of the state’s massive tax breaks for corporations and the wealthy, he has largely refused to do so.

    At a speech in DC on Monday, Governor Bobby Jindal reiterated his stance. “I’ll veto any tax increase. I’ll veto any budget that includes a tax increase,” he said.

    Sorry Wisconsin, Illinois, and Louisiana, that wasn’t a dingo that ate your baby’s future. A giant hamster did it and that giant hamster was you! It wasn’t even due to something understandable like ambien ‘oopsy’. You ate your children’s futures for property tax cuts!

    And while their educations were no doubt delicious, keep in mind that this wasn’t the normal feasting on the poor and underprivileged. Wisconsin is dining on its kids from the well-to-do suburbs too. It’s an all you can eat buffet with an unusually wide selection:

    Milwaukee Sentinel Journal
    Scott Walker’s budget forcing school districts to trim further

    By Patrick Leary of the Journal Sentinel
    March 16, 2015

    Wisconsin school districts are scrambling to revise their budget estimates after Gov. Scott Walker’s biennial state budget proposed effectively cutting $127 million in education aid next year.

    Milwaukee Public Schools is facing a loss of at least $12 million next year as a result of that move, but plenty of well-to-do suburban districts — in areas that are overwhelmingly supportive of the governor politically — are acknowledging gaping budget holes, as well.

    The aid removal “definitely compounds the already massive fiscal challenges that Cedarburg and most other districts are already facing for next year,” Cedarburg Superintendent Jonathan Lamberson said. The Ozaukee County district would lose about $430,000 next year if the proposal passes.

    The state budget is in the hands of the Legislature’s powerful Joint Finance Committee, and members will be in Milwaukee on Friday to hold a public hearing at Alverno College, starting at 9 a.m. Education advocates and school officials are likely to turn out in large numbers.

    “What I really hope for at the end of all this is that people understand that education is not an expense, it’s an investment,” MPS Superintendent Darienne Driver said in a telephone interview from Washington, D.C., Monday after she and other education leaders met with President Barack Obama to discuss urban education issues.

    She added that Milwaukee would be lobbying for a restoration of funds in the governor’s budget.

    The governor’s budget has a far-reaching impact on school districts. Beyond urban and suburban areas, rural school leaders say the extra aid the governor proposed for their districts is trumped by the loss in per-pupil aid.

    In general, the governor’s budget proposes keeping school revenue flat. General aid increases would go straight to property tax relief because the budget includes no increase to the revenue limit, or the total amount districts can raise in state aid and property taxes combined.

    On top of that, the budget eliminates a special $150 per pupil aid payment that Wisconsin school districts received over the past two years. That appropriation was added by the Legislature in the last budget as a way to give a bump to schools without raising property taxes.

    Walker has proposed returning the aid payment in 2016-’17 at $165 per pupil, but over the two years, the net effect is $135 less per pupil than what schools received in the last budget.

    “We are very concerned about the lost aid,” Wauwatosa Superintendent Phil Ertl said. “We are looking at approximately $900,000 in lost aid this year.”

    The Waukesha School District is projecting nearly $2 million in lost aid, which would result in a projected $3.7 million deficit for the coming year, officials said. The Oconomowoc Area School District would lose nearly $800,000. Menomonee Falls projects a loss of almost $600,000.

    “Milwaukee Public Schools is facing a loss of at least $12 million next year as a result of that move, but plenty of well-to-do suburban districts — in areas that are overwhelmingly supportive of the governor politically — are acknowledging gaping budget holes, as well.
    It was always kind of inevitable that the phrase “eat the rich” was going to make a comeback given the way things are going, but Scott Walker isn’t exactly the politician one would have expected to lead the “eat the rich kid’s futures” charge. And yet, if you think about it, the more the super-rich eat up everything for the poor, the more tempted they’re going to be to start going after the merely kinda rich. So here were are, with one state after another consuming its own young. Even the oh so precious non-poor youths.

    Strange times. What’s next?

    Posted by Pterrafractyl | March 18, 2015, 12:10 pm
  34. Aww, isn’t that convenient: After effectively cutting the wages of Wisconsin workers by gutting the state’s unions, Wisconsin Republicans are now trying to add Wisconsin to the list of states that don’t mandate a day of rest of workers in jobs where fatigue could lead to increased accidents or deaths. Yep, Wisconsin is open for business and deadly, accident-prone businesses are strongly encouraged to apply:

    The Nation
    These Republicans Want to Take Away Your Weekend

    In Wisconsin, a new bill is threatening to kill workers’ one day of rest.
    Moshe Z. Marvit
    March 19, 2015

    As Wisconsin Governor Scott Walker signed the so-called “right to work” bill on March 9, making Wisconsin the twenty-fifth right-to-work state in the country, labor advocates braced themselves for the stream of anti-worker bills that were almost certain to follow. Many assumed the first target would be Wisconsin’s 1930s prevailing wage laws, which require that workers on public works projects be paid the established going rate for their labor, rather than allowing contractors to try to outbid each other by lowering workers’ wages. Few, however, expected the legislative cluster bomb that is currently being referred to committee by a pair of Republicans: a bill to repeal the weekend.

    Though labor often boasts that it helped codify the two-day work break—witness the popular pro-labor bumper sticker, “Unions: the folks that brought you the weekend”—a day of rest is protected by law in only a fraction of the states. According to the Society for Human Resource Management, thirteen states have laws mandating a day of rest for some or all workers. In states that mandate a day of rest only for certain categories of workers, those workers are often in jobs where fatigue could lead to increased accidents or deaths.

    Now that might be about to come to an end in Wisconsin.

    Currently, the law in Wisconsin requires that workers employed in a “factory or mercantile establishment” must receive “at least 24 consecutive hours of rest in every 7 consecutive days.” If an employer would like a worker to work seven days in a row for a limited period of time, then the two can jointly petition the Department of Workforce Development for a waiver. According to the office of Republican Representative Mark Born, who is introducing this bill in the State Assembly, there were 169 waivers requested in 2013 and 232 in 2014, and all of them were granted. Under the current system, the waiver requests must state the necessity for the waiver, and they are granted only for a limited period of time.

    The new bill, which is being sponsored by Republican Van Wanggaard in the State Senate alongside Born in the Assembly, would add a provision to the “day of rest” law that could effectively nullify it. The bill would create an exemption that would allow employees to “voluntarily choose” to slave away for seven days in a row without at least twenty-four hours of rest.

    Representative Born’s office played down the magnitude of the bill, arguing that it merely “codified into law the waiver system and made it easier for employers and employees to make work schedules.” But this new law cuts the regulatory body out of the equation, relying instead on the troubled notion that employers would allow employees to choose “voluntarily” to give up any day of rest. As Marquette University law professor Paul Secunda explained, the idea “completely ignores the power dynamic in the workplace, where workers often have a proverbial gun to the head.” Indeed, the reason Wisconsin had passed a “day of rest” law in the first place was because employers had been abusing employees by pressing them to work too many days without break. “Now this bill will force many workers to strike a bargain with the devil,” Secunda said.

    A similar version of this bill was introduced last year at the urging of Wisconsin Manufacturers and Commerce, the state’s largest business organization. But the legislature was not able to vote on it before the end of the session. However, Representative Born’s office was “optimistic” of the bill’s chances in this session.

    Mike Browne, the deputy director of the progressive group One Wisconsin Now, explained that the timing of the bill, so soon after the passage of right-to-work, was fitting. “After rushing to pass a wrong-for-Wisconsin right-to-work law that could lower family wages by over $5,000 a year it makes sense Republicans would introduce a law to repeal the weekend. After all, with lower wages workers will see they’re going to have to work that much more to try to get ahead.”

    Oh well, at least all those endangered, exhausted workers will no doubt be racking up some “time and a half” overtime pay even more time off that they’ll never actually get to use once the GOP guts the overtime rules. Churn and burn forever! It’s the march of progress.

    Posted by Pterrafractyl | March 19, 2015, 2:04 pm
  35. Oh look, another right-wing socioeconomic mass catastrophe in the making:

    NBC News
    Retirement Crisis: The Great 401(k) Experiment Has Failed for Many Americans

    By Kelley Holland

    You need to know this number: $18,433. That’s the median amount in a 401(k) savings account, according to a recent report by the Employee Benefit Research Institute. Almost 40 percent of employees have less than $10,000, even as the proportion of companies offering alternatives like defined benefit pensions continues to drop.

    Older workers do tend to have more savings. At Vanguard, for example, the median for savers aged 55 to 64 in 2013 was $76,381. But even at that level, millions of workers nearing retirement are on track to leave the workforce with savings that do not even approach what they will need for health care, let alone daily living. Not surprisingly, retirement is now Americans’ top financial worry, according to a recent Gallup poll.

    To be sure, tax-advantaged 401(k) plans have provided a means for millions of retirement savers to build a nest egg. More than three-quarters of employers use such defined contribution plans as the main retirement income plan option for employees, and the vast majority of them offer matching contribution programs, which further enhance employees’ ability to accumulate wealth.

    But shifting the responsibility for growing retirement income from employers to individuals has proved problematic for many American workers, particularly in the face of wage stagnation and a lack of investment expertise. For them, the grand 401(k) experiment has been a failure.

    “In America, when we had disability and defined benefit plans, you actually had an equality of retirement period. Now the rich can retire and workers have to work until they die,” said Teresa Ghilarducci, a labor economist at the New School for Social Research who has proposed eliminating the tax breaks for 401(k)s and using the money saved to create government-run retirement plans.

    A historical accident?

    It wasn’t supposed to work out this way.

    The 401(k) account came into being quietly, as a clause in the Revenue Act of 1978. The clause said employees could choose to defer some compensation until retirement, and they would not be taxed until that time. (Companies had long offered deferred compensation arrangements, but employers and the IRS had been going back and forth about their tax treatment.)

    “401(k)s were never designed as the nation’s primary retirement system,” said Anthony Webb, a research economist at the Center for Retirement Research. “They came to be that as a historical accident.”

    History has it that a benefits consultant named Ted Benna realized the provision could be used as a retirement savings vehicle for all employees. In 1981, the IRS clarified that 401(k) plan participants could defer regular wages, not just bonuses, and the plans began to proliferate.

    By 1985, there were 30,000 401(k) plans in existence, and 10 years later that figure topped 200,000. As of 2013, there were 638,000 plansin place with 89 million participants, according to the Investment Company Institute. And assets in defined contribution plans totaled $6.6 trillion as of the third quarter of 2014, $4.5 trillion of which was held in 401(k) plans.

    “Nobody thought they were going to take over the world,” said Daniel Halperin, a professor at Harvard Law School, who was a senior official at the Treasury Department when 401(k) accounts came into being.

    Rise of defined contributions

    But a funny thing happened as 401(k) plans began to multiply: defined benefit plans started disappearing. In 1985, the year there were 30,000 401(k) plans, defined benefit plans numbered 170,000, according to the Investment Company Institute. By 2005, there were just 41,000 defined benefit plans-and 417,000 401(k) plans.

    The reasons for the shift are complex, but Ghilarducci argued that in the early years, “workers overvalued the promise of a 401(k)” and the prospect of amassing investment wealth, so they accepted the change. Meanwhile, companies found that providing a defined contribution, or DC, plan cost them less. (Ghilarducci studied 700 companies’ plans over 17 years and found that when employers allocated a larger share of their pension expenditures to defined contribution plans, their overall spending on pension plans went down.)

    “I’m not saying defined benefit plans are flawless, but they certainly didn’t put as much of the risk and responsibility on the individual,” said Terrance Odean, a professor of finance at the University of California, Berkeley’s Haas School of Business.

    Early signs of trouble

    That concept may not have been in the forefront of employees’ minds at the start, but problems with 401(k)s surfaced early.

    For one thing, employee participation in 401(k) plans never became anywhere near universal, despite aggressive marketing by investment firms and exhortations by employers and consumer associations to save more. A 2011 report by the Government Accountability Office found that “the percentage of workers participating in employer-sponsored plans has peaked at about 50 percent of the private sector workforce for most of the past two decades.”

    The employees who did participate tended to be better paid, since those people could defer income more easily. The GAO report found that most of the people contributing as much as they were allowed tended to have incomes of $126,000 or more.

    In part, that is because the ascent of 401(k) plans came as college costs started their steep rise, hitting many employees in their prime earning years. Stagnating middle-class wages also made it hard for people to save.

    Fees have been another problem. Webb has studied 401(k) fees, and he concluded that “as a result of high fees, fund balances in defined contribution plans are about 20 percent less than they need otherwise be.”

    The Department of Labor in 2012 established new rules requiring more disclosure of fees, but it faced strong industry opposition, including a 17-page comment from the Investment Company Institute.

    Failure of choice

    Most employees also turned out to be less than terrific investors, making mistakes like selling low and buying high or shying away from optimal asset classes at the wrong time.

    Berkeley’s Odean and others have studied the effect of investment choice on 401(k) savers, and found that when investors choose their asset class allocation, a retirement income shortfall is more likely. If they can also choose their stock investments, the odds of a shortfall rise further.

    “401(k)’s changed two things: you could choose not to participate, and you chose your own investments, which a lot of people, I think, screw up,” Halperin said.

    The result of all these shortcomings? Some 52 percent of American households were at risk of being unable to maintain their standard of living as of 2013, a figure barely changed from a year earlier—even though a strong bull market should have pushed savings higher and the government gives up billions in tax revenue to subsidize the plans.

    In a hearing last September on retirement security, Sen. Ron Wyden, D-Ore., declared that “something is out of whack. The American taxpayer delivers $140 billion each year to subsidize retirement accounts, but still millions of Americans nearing retirement have little or nothing saved.”

    Retirement worries rise

    As problems mount with 401(k)s, Americans’ worries about retirement security are intensifying.

    A 2014 Harris poll found that 74 percent of Americans were worried about having enough income in retirement, and in a survey published recently by the National Institute on Retirement Security, 86 percent of respondents agree that the country is facing a retirement crisis, with that opinion strongest among high earners.

    Changes may come, but for now, 401(k) plans and their ilk remain Americans’ predominant workplace retirement savings vehicle. They may be a historical accident, but for the millions of people now facing a potentially impoverished retirement, the fallout is grave indeed.

    As a former Treasury official, Halperin witnessed the creation of 401(k) accounts, But, “on balance, I don’t think it was a big plus” that the accounts were created, he said. “I don’t take credit for it. I try to avoid the blame.”

    Don’t you love how the 401ks that made Wall Street billions and allowed companies to substantially reduce their long-term pension costs just sort of “accidentally” became the norm while pensions were phased out. LOL!

    Still, it’s going to be incredibly interesting to see how the looming non-retirement catastrophe impacts the US society because if there’s one thing that spells doom for an entire society is it’s seeing your parents and grandparents lose all their saving and end up working in poverty until the day they drop dead on the job.

    And don’t forget that this also means a lot of parents are going to be moving back in with their kids just to survive. How’s that going to work out?

    Posted by Pterrafractyl | March 24, 2015, 2:59 pm
  36. You know how we’re always told that we should just rely on charity to help the needy. Well, if true, we’re going to need a lot more boy bands:

    Christian Science Monitor
    Boyz II Men singer raises thousands for homeless Senate worker: Is it enough?

    The campaign has already raised more than $7,000 for Charles Gladden. But instead of celebrity attention, experts say policymakers need to put their heads together to find long-term solutions to poverty.

    By Cristina Maza, Staff writer April 27, 2015

    The heartbreaking story of Charles Gladden, a Washington, D.C., resident who works as a custodian in the the Dirksen Senate Office by day and sleeps on the city streets at night, brought national attention to the plight of low-income workers.

    Mr. Gladden makes $11 an hour sweeping floors and cleaning bathrooms in the Senate building in the nation’s Capitol. He says he spends much of his wages helping his daughters and grandchildren, who also struggle economically. His efforts to help his family, compounded by chronic health problems, have left Gladden unable to afford housing.

    After news broke about Gladden’s lack of shelter last week, a celebrity turned to social media to find a solution to his problems. On Saturday, Nathan Morris, co-founder of the musical group Boyz II Men, launched an online crowdfunding campaign to find Gladden a place to live. The campaign’s goal is $20,000, toward which the singer will donate $10,000.

    Similar campaigns have helped other individuals in need and the generosity of those involved is laudable, experts say. But questions remain over how sustainable such a solution is, and whether assisting one man will help address the country’s problem of homelessness and poverty. Instead of celebrity attention, policy makers need to put their heads together to find long-term solutions to poverty, experts say.

    The campaign “might be helpful for Mr. Gladden, and God help anyone who wants to help those in need, but obviously the problem of homelessness is a multi-billion dollar problem,” says Ken Stern, author of the book “With Charities For All.” “This man is working in the Senate, and the Senate has the power to help millions of people. Those are the sustainable solutions that we need. There are thousands of people out there who need this type of help.”

    Gladden first spoke with the Washington Post about his housing situation after choosing to join other Senate staff members on a one-day strike to protest low-wages and difficult working conditions. The protesters, part of the national Fight for $15 movement, are requesting that President Obama support the demands for a living wage for all workers.

    By midday Monday, the campaign had raised more than $7,300 from more than 130 people through the crowd-funding site.

    In February, a similar crowd-funding campaign also raised more than $300,000 for a Detroit man who walked 21 miles to work everyday. The campaign, which originally aimed to raise enough money for the man to purchase a car, far exceeded its original funding goal.

    But Mr. Stern points out that celebrity attention to an issue and successful crowd-funding campaigns do not always bring long-term results.

    “This happens with some frequency, when a celebrity takes on an issue. Celebrities have a huge megaphone in society. But these problems beg for long-term solutions and commitment, and celebrity campaigns can often be transitory,” he says.

    “Is a one-off crowd funding campaign a solution when you have large scale problems?”

    Well it’s certainly good to hear that not only is this poor guy getting some help from a celebrity performance but that everyone involved with this effort recognizes that celebrity fund raisers aren’t going to be enough to bring about any meaningful help for the millions of people in Mr. Gladden’s position. Whether or not the Senate can be shamed into giving this guy and other poorly paid workers a reasonable raise remains to be seen, but as far as exposure for the endemic planned poverty in the US economy (which is exactly what poor wages are…systemically planned poverty) it would be hard to do better than a homeless employee working for the US Senate.

    But part of what makes his story so relevant for the larger US economy is the fact that his homelessness is caused, in part, by his decision to support his daughters and grandchildren who are also suffering economically. This is inevitably going prompt the cluelessly heartless to respond, “See, he didn’t have to be homeless. He chose it by helping his daughters and grandchildren.” Seriously, just read the comments to the original Washington Post article and that’s one of the dominant sentiments. And since mass poverty for the elderly is one of the mega-catastrophes the US has basically guaranteed for itself in the coming decades, it’s going to be more and more important for the stories about how intergenerational assistance within families is poised to collapsed as the planned mass poverty of the US economy takes hold.

    The transition away from pensions in favor of 401ks along with the cumulative impact of decades long right-wing assault on anything that assists the poor and middle class basically ensures much higher rates of poverty amongst the elderly going forward, but we have yet to see the full impact of that trend because so many of the existing retirees entered the workforce before benefits like pensions were phased out and the general structure of the workforce wasn’t so punishing to those without a college degree. But that post-pension doomsday is coming. You can only have so many decades of stories about “America’s retirement crisis” before it becomes “America’s elderly poverty crisis” which, in turn, becomes “America’s families struggle to care for elderly out of work relatives with no where to go crisis”.

    Now combine all that with decades of stagnant wages and a generation of Millenials that with limited job prospect and massive student loans and you have the stage set where parents can’t afford to help their kids and the kids can’t afford to help their parents. And at that point, the unofficial safety net of families helping each other breakdowns too. That’s just what happens when a society goes through the kind of systematic dismantling of so many of the policies and norms that helped create the middle class in the first place. That’s basically guaranteed at this point.

    Ok, maybe mass transgenerational poverty isn’t actually guaranteed for the US since there are plenty of relatively easy and pain free policy fixes that could eradicate poverty AND stimulate the economy, if only Congress would consider them. And who knows, maybe some of those easy and effective solutions will become part of the national conversation someday. It’s possible.

    But that would also require a rather dramatic cultural change in America away from the current widely held assumptions that poverty is just something that’s too big to eradicate and if you’re poor it’s somehow your fault. Good luck with that!

    Posted by Pterrafractyl | April 27, 2015, 2:46 pm

Post a comment