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Posts Tagged ‘Paul Krugman’

Robert Scheer | Truthdig | June 3, 2009

The three wise monkeys?

The three wise monkeys?

How could Paul Krugman, winner of the Nobel Prize in economics and author of generally excellent columns in The New York Times, get it so wrong? His column last Sunday—“Reagan Did It”—which stated that “the prime villains behind the mess we’re in were Reagan and his circle of advisers,” is perverse in shifting blame from the obvious villains closer at hand.

It is disingenuous to ignore the fact that the derivatives scams at the heart of the economic meltdown didn’t exist in President Reagan’s time. The huge expansion in collateralized mortgage and other debt, the bubble that burst, was the direct result of enabling deregulatory legislation pushed through during the Clinton years.

Ronald Reagan’s signing off on legislation easing mortgage requirements back in 1982 pales in comparison to the damage wrought 15 years later by a cabal of powerful Democrats and Republicans who enabled the wave of newfangled financial gimmicks that resulted in the economic collapse.

Reagan didn’t do it, but Clinton-era Treasury Secretaries Robert Rubin and Lawrence Summers, now a top economic adviser in the Obama White House, did. They, along with then-Fed Chairman Alan Greenspan and Republican congressional leaders James Leach and Phil Gramm, blocked any effective regulation of the over-the-counter derivatives that turned into the toxic assets now being paid for with tax dollars.

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It only makes sense that a party currently being wagged by fringe crazy people like Glenn Beck, Rush Limbaugh and Michele Bachmann would release its alternative budget on April Fools’ Day.

Not only does the Republican plan freeze discretionary spending for five years in the midst of a recession which, by most accounts and proved by history, will countermand any sort of economic recovery, but it also cuts taxes by 10 percent for the same Wall Street executives whose actions largely got us into this economic mess in the first place. In other words: Congratulations, Republicans, you just released a budget that rewards wealthy corporate executives while blocking any attempt to dig us out of the economic catastrophe they created.

Smart!

The only bit of Republican legislation that’d be more ridiculous would be if Michele Bachmann were to introduce a constitutional amendment thwarting a fake plot to eliminate the dollar as the form of currency in the United States.

Oh wait. She’s already done that. And 33 Republican congressmembers so far have co-sponsored the amendment. 30-plus Republicans have irrevocably tethered their wagons to the Bachmann crazy train. Excellent. Next on the agenda: a bill creating the Office of Robot Insurance, protecting us from robot attackers who use old people’s medicine for fuel. Speaking of which, the Republican plan also phases out Medicare.

The marquee item, however, in the Republican plan is their inexplicably regressive tax cut for the super rich. Wealthy Americans in the top three tax brackets would see their tax burden cut to a flat 25 percent from previous rates of 35, 33 and 28. According to the Center for American Progress, CEOs from any of the top 800 corporations would receive a tax break of around $1.5 million a year. Meanwhile, if you earn $15,000 a year, your tax break will be around $0 a year.

But get this. Under the Republican plan, Americans are given the option of paying the old tax rates instead of the new, expensive and regressive Republican rates. So, for example, if your household income is $100,000, you could pay the same tax rate as someone earning $15,000. Or you could be a swell egg and go back to your old rate. Aside from the utter lack of fairness in the notion of a $100,000 household paying the same rate as a $15,000 household, who in their right mind would voluntarily pay higher taxes?

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You’ve probably noticed that the debate swirling around the president’s recovery bill has reached new levels of mortal terror and chaos. Even a casual excursion around the liberal tubes and you’ll find posts that read like the worst parts of the Bible. There’s a palpable vibe in many progressive circles that the president is on the brink of an epic fail.

After all, this is one of those do-or-die moments in American history and the panic level is rightly proportional.

But while urgency is appropriate, we’re losing the initiative.

We all have our own ideas about what the recovery bill is supposed to look like. The Republicans are threatening to filibuster, and we can’t trust Harry Reid to stop them. Rush Limbaugh, the very serious leader of the Republican Party and alleged sex tourist, has ordered his dittoheads to blitz the Democrats with angry phone calls. Concurrently, Democrats, liberals and progressives, for all we’ve learned in the last eight years, are losing the framing battle — “stimulus package” sounds like a weird service offered at a porn store and, in that context, a trillion dollar “stimulus package” sounds, you know, painful. Meanwhile, centrist Democrats like Ben Nelson appear to be ransacking the bill. Other Democrats have bugged out of Washington entirely.

We’re looking at fire and brimstone coming down from the skies. Forty years of darkness. The dead rising from the grave! Dogs and cats living together! Mass hysteria!

Come to think of it, some of that Ghostbusters stuff might actually come true if a beefy and expensive recovery bill isn’t passed, and right soon.

So how do we get there?

The first step in getting a handle on all of this mayhem is to understand that this is unprecedented in terms of size, scope and strategy — only rivaled by the New Deal. Then again, for all of the obstacles he faced, FDR didn’t have to negotiate his way through cable news, a hostile press, far-right talk radio, the blogotubes and an army of dittoheads taking their orders from an impotent burnout whose stated goal is the failure of the economy. In other words, while there are very smart economic solutions being pitched by Paul Krugman and others, the price tag, politics, optics, media and discourse are all brand new.

This is massive, this is complicated, this is unlike anything we’ve ever seen.

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